The Republican Economic Policies Have Been Disastrous For Most Americans

The Trump economy has been great for the rich - especially the super-rich. They are making more money than ever before, and thanks to Trump's "big beautiful bill" they got a huge tax cut made permanent so they can keep most of those bigger incomes.

But the bottom 90% of the country are not doing so well. Their wages have remained virtually stagnant, and thanks to Trump's tariff-driven inflation (currently at 3% and likely to rise) they are falling further behind with each passing month. And those who did get a small tax cut from the Trump/GOP bill are finding it doesn't come close to covering the increase in the price of nearly everything.

In a healthy economy, higher wages and an increase in the number of good jobs would counter the higher prices. But we don't have a healthy economy. Wages are not increasing enough, and now we learn the economy is losing jobs instead of creating them.

In 2025, the U.S. economy has seen companies lay off at least 1.1 million workers. These workers are not just losing their wages, but there are not new jobs being created they can move into. In fact, the huge number of jobs lost equal those seen in past recessions.

Why are we not currently in a recession (with GDP in negative territory)? Because the rich are spending big - making up for the reduction in spending among most other Americans. In other words, the top 10% of earners is propping up the economy.

This is not sustainable. It means the bottom 90% of Americans are suffering like in a recession. They are finding it hard to buy the necessities required for a decent like in this country. Life is becoming unaffordable for the bulk of the U.S. population.

This has been slowly coming for the last four or five decades - since the GOP gained enough power in 1980 to impose their own economic policies. They imposed the trickle-down policy (which said that as the rich was given more they would share it with everyone else). But they didn't share it. They hogged the rising productivity and increased income, and now there is a bigger gap between the rich and everyone else than ever before (bigger than even in the 1920's right before the Great Depression).

This must change. We must make life affordable again for all Americans - not just the rich! But it won't happen as long as the Republicans remain in power with their failed economic policies.

We Are Governed By The Rich Who Make Laws That Benefit Only Themselves

The last big bill passed by Congress, and signed by the president was the "big beautiful bill". That bill made permanent the tax cuts passed in the last Trump term, most of which went to the rich and ultra-rich. It also cuts millions from the SNAP (food stamp) program and will result in millions more losing their health insurance (from both Medicaid and the Affordable Care Act).

The rich didn't need those tax cuts. Thanks to the economy tilted in their favor, they are making more money than ever. But the poor needed those food benefits. And the poor, working class, and many in the middle class needed that health care. Because of the cuts, many will now struggle to feed themselves (and their children), and many will not receive the preventative care they need to save their lives.

How could such a thing happen in a democracy? How can a supposedly representative government give more to the rich while taking desperately needed help from millions? 

This excerpt from a 2024 article in The Washington Post by Dustin Guastella can give you a clue:

The United States has long been governed by millionaires. In 2020, more than half of all members of Congress were millionaires, including nearly two-thirds of senators. It’s also true for more than 80 percent of those who have served as president, after adjusting for inflation.

 If members of the working class were proportionally represented in Congress, they would make up 60 to 70 percent of lawmakers, instead of the 2 percent to 5 percent that have historically won seats.

Our government is in the hands of the rich. While this has been true historically, it has gotten much worse. Thanks to the Citizens United Supreme Court decision, the rich can flood campaigns with big dollars - supporting other rich people running for office, and making candidates not rich beholding to them.

The result is an oligarchy. We are being ruled by the rich. And those rich make sure the laws being passed benefit them, regardless of what those laws might do to everyone else.

This is not going to change until we restore our democracy by getting more working classes and middle class people in Congress.

Trump's Insane Idea To Help The Rich And Hurt Everyone Else

 

If Trump is re-elected, he and his GOP cohorts have already told us they want to continue the tax cuts he got passed during his first term (over 80% of which went to the rich and super-rich). It won't help the working class at all, and will only have a tiny benefit for the middle class -- and it will add trillions more to the national debt. It's a very bad idea.

Now Trump has come up with an even worse idea. At his meeting with congressional Republicans, Trump floated the idea of doing away with the income tax completely and replacing it with a tariff on all goods entering the United States.

Before you celebrate the idea of no income tax, stop and think of what the tariff on everything would mean. It would mean higher prices of nearly everything you buy. And not just a little higher. To replace the billions received in income taxes, the tariffs would have to be very high - and that would make prices on goods much, much higher!

It would be disastrous for the poor. They are already struggling to get by, and raising prices much higher would mean they would struggle just to have a subsistence existence. Working class families would also be devastated. They are already barely keeping up with inflation. The higher tariffs would mean they'd fall behind, and many would drop into the poor class. Middle class workers would also suffer. All of these groups would pay much more in higher prices than they currently pay in income taxes.

Only one group would be helped. The rich would make out like bandits! They would be happy to pay the higher prices, because it would be much less that they have to pay in taxes - and they could easily afford the higher prices.

It's just one more crazy idea that shows Trump, and his GOP cohorts, only care about one small group - the rich (and especially the super-rich). They don't care about hurting ordinary Americans as long as they can serve the rich.

Do You Really Want To Hurt Yourself By Voting Republican?

 

The Republicans like to talk about cutting taxes. But they don't mean your taxes or mine. They want to cut taxes further for the rich and super-rich. Just look at the last tax cut they did. About 82% of it went to the rich, while only 18% went to other Americans (and even that pitiful amount was set to disappear after a few years).

So, I can understand why a rich person (who cared only about himself or herself) would vote Republican. But I continue to be amazed that any of the poor or the working and middle classes would vote that way.

Just look at what they want to do:

They want to cut help for the poor and disadvantaged, even though these people are struggling just to keep food on the table and a roof over their heads. They tell you that America can't afford to help these people. They don't tell you the truth though. If all help for the poor was eliminated, it wouldn't equal the tax cut the rich got in the Trump administration.

This country has a higher percentage of poor people than any other developed nation (including a higher percentage of poor children). The cuts they want to enact would only increase these percentages. The U.S. is still the richest nation of Earth. Why can't it provide adequate support for the poor?

The Republicans also want to keep the minimum wage at $7.25 an hour -- a poverty wage. And some would like to eliminate the minimum wage altogether, and let businesses pay even less. Anyone willing to work hard for 40 hours a wee should not be forced to live in poverty. But Republicans don't care about working people. And they know that raising the minimum wage would put upward pressure on all wages (including those of the middle class).

Republicans want to cut Social Security by raising the retirement age to 70. That might be fine for bankers that sit on the butts all day, but the millions of people who actually do hard physical labor for a living would be hurt. Most of them are lucky to get to the current retirement age of 66 before their bodies wear out. Republicans also want to change the way seniors get a cost-of-living adjustment to their social security checks, making it impossible for them to keep up with inflation.

Another way they are trying to keep wages low is to make it harder to join a labor union, or for those unions to strike or negotiate for decent wages and safe working conditions. Strong labor unions built the middle class in this country. The continual GOP effort to hurt unions is squeezing the middle class out of existence.

Inflation, even though it is coming down, is hurting most Americans. The Republicans say they would control inflation. But the only plan they have is to give the rich more while taking more from everyone else. That will not bring inflation down. It will just make our economy more unfair to most Americans.

Unless you are rich, voting Republican will not help you. It will just make things worse.

Most Americans Would Not Be Helped By GOP Economics

Republicans are basing their election hopes on an economic message. They want Americans to believe they are the party that could best run the economy. That is nothing short of a lie! They cling to their failed "trickle-down" theory -- that whatever is good for the rich is good for everyone. That has not worked in the past, and would not work in the future. The truth is that the GOP economic plan would be bad for most Americans.

Republicans will not help the poor.

Republicans still want to cut government spending. And the spending they want to cut is the meager help the government gives to the poor. These people are already struggling to make ends meet, and the Republicans would make their lives much harder.

Republicans will not help the working poor.

Somewhere between 20% and 25% of all workers are making at or close to the federal minimum wage of $7.25 an hour. That is a poverty wage that keeps these workers poor, even though they work hard at a full-time job. No one who works a full-time job should have to live in poverty, but the Republicans refuse to raise the minimum wage.

Republicans will not help seniors.

Republicans want to cut funding for Social Security and Medicare, even though they are funded by payroll deductions that workers pay their entire working lives. And Republicans have already said they will refuse to raise the debt limit (and cause the nation to default on its loans) to force cuts to Social Security and Medicare. These cuts will make life harder for seniors -- many of whom depend solely on those programs to stay out of poverty.

Republicans will not help the middle class.

Unions built the middle class in this country. But Republicans oppose unions. They want to make it harder to join a union or form a new union. They know that without unions their corporate masters can keep worker wages below what it should be. In the past, workers shared in productivity gains, but thanks to Republicans the rich corporate owners now hog all those productivity gains. And Republicans will allow that to continue.

Those groups together make up a majority of Americans. To be blunt, the Republicans have no interest in helping a majority of Americans.

So, who would they help. That's easy -- the rich and corporations. They have already come out in favor of making the Trump tax cuts permanent -- tax cuts that went mostly to the rich and corporations.

Don't let the GOP politicians fool you. They are not the party of the poor, the working class, or the middle class. They are the party of the rich. The only thing they offer those who are not rich is just lies!

Fewer Families Now Identify As Middle Class

 The chart above is from surveys by the Gallup Poll -- the most recent being done between April 1st and 19th of a nationwide sample of 1,018 adults, with a 4 point margin of error.

Between 2002 and 2008 about 61% of Americans said they were in the middle class. Currently, only about 52% say that -- a drop of 9 points. That drop is evident in all demographic groups.

Republicans Want To Raise Taxes On Everyone But The Rich

During the Trump administration, Republicans cut taxes for corporations and the rich. They would like to cut taxes even more, but not for most Americans. They think the poor, the working class, and the middle class don't pay enough in taxes. They only want to cut taxes for the richest Americans.

Here's how Steve Benen puts it at MSNBC.com:

Senate hopeful Mike Gibbons — by some measures, the frontrunnerin Ohio’s GOP primary — pledged yesterday that he will not support new taxes if elected. At face value, this didn’t seem especially notable, since Republicans make similar vows all the time.

But Gibbons probably felt the need to make such a declaration because of this Associated Press report.

Mike Gibbons, a leading Republican Senate candidate from Ohio, said at a media event last fall that middle-class Americans don’t pay “any kind of a fair share” of income taxes. “The top 20% of earners in the United States pay 82% of federal income tax — and, if you do the math, and 45% to 50% don’t pay any income tax, you can see the middle class is not really paying any kind of a fair share, depending on how you want to define it,” Gibbons said.

It’s important to emphasize that Gibbons, a millionaire investment banker, made the comments in September, just a few months after launching his second Senate bid. To date, the GOP candidate hasn’t given any indication of how (or whether) he’d try to get middle-class Americans to pay their “fair share” of income taxes.

But there’s an even larger context to this. As regular readers know, Republican Sen. Rick Scott of Florida, the chair of the National Republican Senatorial Committee, recently unveiled a 31-page blueprint, outlining the far-right ideas he wants his party to pursue after this year’s midterm elections. One provision stood out: “All Americans should pay some income tax to have skin in the game, even if a small amount. Currently over half of Americans pay no income tax.”

In other words, tens of millions of American adults currently don’t pay federal income taxes because they don’t make enough money to qualify. As we’ve explained before, Scott, a member of the Senate Republican leadership, has proposed changing that: He envisions a tax system in which those who don’t make enough money would have to pay more than they pay now.

The Daily Beast reported last week, “At least four GOP candidates in the most important battleground states this fall have either explicitly expressed support for Scott’s plan or have campaigned on the political views that form the foundation of his platform.”

And it’s against this backdrop that the public has learned that the top contender in Ohio’s Republican Senate primary also believes that middle-class Americans aren’t paying enough in income taxes.

What’s more, this line of thought has a lengthy GOP pedigree. As we discussed a couple of months ago, in 2011, ahead of her ill-fated presidential campaign, Republican Rep. Michele Bachmann complained that millions of Americans don’t make enough money to qualify to pay income taxes. The far-right Minnesotan described this as ruinous for democracy “because there is no tie to the government benefits that people demand. I think everyone should have to pay something.”

Around the same time, then-Texas Gov. Rick Perry, while launching his own presidential bid, called it an “injustice” so many Americans “don’t even pay any income tax.”

On Capitol Hill, congressional Republicans thought along the same lines. In April 2012, then-House Majority Leader Eric Cantor said it wasn’t “fair” to have the wealthy pay income taxes, while low-income Americans do not.

And then, of course, there was Mitt Romney, who spent part of his presidential candidacy insisting that it was “a real problem” that so many Americans didn’t have to pay federal income taxes. It was a “problem” the wealthy Republican intended to fix.

The principal problem with Gibbons’ recent rhetoric in Ohio is that he told the truth about his genuine beliefs about tax policy — which is entirely in line with what many Republicans genuinely believe about tax policy. The risk to the GOP is that the public might eventually notice.

Republicans Have Never Acted To Help The Working Class

 

In 2016, many white working class voters voted for Trump (and other Republicans). This shocked many Democrats, because it has been the Democratic Party that has provided help for the working class. Republicans have never done so.

Democrats are looking for ways to get this vote back. Some think that Democrats just need to do a better job of explaining how the infrastructure bill and the Build Back Better bill would help workers -- and that is true. But it doesn't go far enough.

Democrats should learn from how the Republicans have been successful. They don't run on their record. The only real record they have in recent years is giving the rich and corporations a huge tax break. Look at any Republican political ad -- they are almost exclusively a rant on how terrible the Democrats are for the country. It's not true, but those negative ads work. It's how the GOP has survived in the last few years.

It's time for Democrats to fight fire with fire. 

Now some of those white working class voters are racists, and they vote for Republicans because the GOP has provided a home for racists (and even nominated one to be their leader). Forget those racist voters. There aren't enough of them to swing an election, and no decent party would want them anyway.

But many white working class voters can be reached. Democrats should tell them how much they've done for them. But Paul Waldman (in The Washington Post) is right -- that's only half of the battle. Democrats must make it clear just how bad the Republicans have been for workers.

That won't be hard to do, because Republicans really have been bad for the working class. They voted against raising the minimum wage. They voted against making health care more affordable and expansive. They voted against helping people get and afford child care. They voted to make it harder to form a labor union. They voted against making the rich (especially billionaires) and corporations pay their fair share of taxes. They voted against badly needed infrastructure. They have been the best friend of the COVID-19 virus -- campaigning against vaccinations and wearing masks.

That's just a short list. The truth is that Republicans have never helped workers -- only the rich and corporations. But it goes further. While Republicans claim to be the better party for the economy, that is not true. The economy (GDP, job creation, stock market, wages, etc.) does much better when Democrats are in power.

Democrats must tell voters how bad the Republicans are, and the best part is, they only have to tell the truth to do so!

Trump Did NOT Increase GOP Share Of White Working Class

The charts above are from The Washington Post. 

Much has been made in the media of Donald Trump's supposed appeal to White working class voters. The general opinion expressed is that there was a massive shift of White working class voters from Democrats to Trump in the last election. But that may not be true.

These charts tell a different story. The top chart shows the percentage of Republican voters in the White working class. Note that it rose to 31% in 2012 (when Romney was the GOP candidate), but remained at that level in 2016 and 2020. Trump did not increase the percentage of Republicans who were in the White working class.

The second chart shows the percentage of White working class voters who voted Republican. Note that while it increased slightly from 2012 to 2016 (from 57% to 62%0, it fell in 2020 to 59% (as these workers were actually starting to abandon Trump.

NOTE - For the survey, White working class voters were identified as those without a college degree who were in the bottom half of the household income distribution.

The Danger Of A Working Class Life In The U.S.

I found this article by David Leonhardt and Stuart A. Thompson in The New York Times to be rather shocking. It seems that working class individuals face a more dangerous life than others. Here is just a part of that article:

When the economists Anne Case and Angus Deaton first published their research on “deaths of despair” five years ago, they focused on middle-aged whites. So many white working-class Americans in their 40s and 50s were dying of suicide, alcoholism and drug abuse that the overall mortality rate for the age group was no longer falling – a rare and shocking pattern in a modern society.

But as Case and Deaton continued digging into the data, it became clear that the grim trends didn’t apply only to middle-aged whites. Up and down the age spectrum, deaths of despair have been surging for people without a four-year college degree.

Case and Deaton — a married couple who are both economists at Princeton — try to explain the causes in a new book, “Deaths of Despair and the Future of Capitalism.” Their basic answer is that working-class life in the United States is more difficult than it is in any other high-income country. “European countries have faced the same kind of technological change we have, and they’re not seeing the people killing themselves with guns or drugs or alcohol,” Case says. “There is something unique about the way the U.S. is handling this.”

Inequality has risen more in the United States — and middle-class incomes have stagnated more severely — than in France, Germany, Japan or elsewhere. Large corporations have increasedtheir market share, and labor unions have shriveled, leaving workers with little bargaining power. Outsourcing has become the norm, which means that executives often see low-wage workers not as colleagues but as expenses.

And the United States suffers from by far the world’s most expensive health-care system. It acts as a tax on workers and drains resources that could otherwise be spent on schools, day care, roads, public transit and more. Despite its unparalleled spending, the American medical system also fails to keep many people healthy. . . .

Many of the problems afflicting the working class span racial groups, and Case and Deaton emphasize that these problems aren’t merely financial. Life for many middle- and low-income Americans can lack structure, status and meaning. People don’t always knowwhat days or hours they will be working the following week. They often don’t officially work for the company where they spend their days, which robs them of the pride that comes from being part of a shared enterprise. . . .

The result of these trends has been a “coming apart,” as Case and Deaton put it, of day-to-day life for whites without a college degree versus those with a college degree.

Surveys show that a growing number of working-class Americans find it difficult to do basic things, like climb a flight of stairs or socialize, partly because of chronic problems with their mental or physical health.

Given all of these alarming social indicators, it’s not surprising that some other causes of death — in addition to suicide, alcoholism and drug overdose — have also started rising for Americans without a college degree. Heart disease is the most significant, exacerbated by obesity, drinking and drug use.

The combined result is a divergence in the life expectancy of white college graduates and non-graduates. Overall mortality for whites between the ages of 45 and 54 has held roughly steady in the last 25 years. But that average hides a big increase in death rates for non-graduates and a big decline for graduates.

Trump Betrayed The Working Class He Promised To Help

(Cartoon image is by Milt Priggee at miltpriggee.com.)

When running for president, Donald Trump made glowing promises to working class voters. He promised to bring good jobs back to America and increase worker wages. He lied. He has done just what Republicans always do -- help the richest Americans and ignore the plight of the bottom 90% of Americans (especially those in the working class).

Here's how former Labor Secretary Robert Reich describes it:

For a century the GOP has been bankrolled by big business and Wall Street. Trump wants to keep the money rolling in. His signature tax cut, two years old last Sunday, has helped U.S. corporations score record profits and the stock market reach all-time highs. To spur even more corporate generosity for the 2020 election, Trump is suggesting more giveaways. Chief of staff Mick Mulvaney recently told an assemblage of CEOs that Trump wants to “go beyond” his 2017 tax cut.

Trump also wants to expand his working-class base. In rallies and countless tweets he claims to be restoring the American working class by holding back immigration and trade. Incumbent Republicans and GOP candidates are mimicking Trump’s economic nationalism. As Trump consigliore Stephen Bannon boasted recently, “we’ve turned the Republican party into a working-class party.”

Keeping the GOP the Party of Big Money while making it over into the Party of the Working Class is a tricky maneuver, especially at a time when capital and labor are engaged in the most intense economic contest in more than a century because so much wealth and power are going to the top.

Armed with deductions and loopholes, America’s largest companies paid an average federal tax rate of only 11.3 percent on their profits last year, roughly half the official rate under the new tax law – the lowest effective corporate tax rate in more than eighty years.

Yet almost nothing has trickled down to ordinary workers. Corporations have used most of their tax savings to buy back their shares, giving the stock market a sugar high. The typical American household remains poorer today than it was before the financial crisis began in 2007.

Trump’s giant tax cut has also caused the federal budget deficit to balloon. Even as pretax corporate profits have reached record highs, corporate tax revenues have dropped about a third under projected levels. This requires more federal dollars for interest on the debt, leaving fewer for public services workers need. 

The Trump administration has already announced a $4.5 billion cut in food stamp benefits that would affect an estimated 10,000 families, many at the lower end of the working class. The administration is also proposing to reduce Social Security disability benefits, a potential blow to hundreds of thousands of workers. 

The tax cut has also shifted more of the total tax burden to workers. Payroll taxes made up 7.8 percent of national income last year while corporate taxes made up just 0.9 percent, the biggest gap in nearly two decades. All told, taxes on workers were 35 percent of federal tax revenue in 2018; taxes on corporations, only 9 percent.

Trump probably figures he can cover up this massive redistribution from the working class to the corporate elite by pushing the same economic nationalism, tinged with xenophobia and racism, he used in 2016. As Steve Bannon has noted, the formula seems to have worked for Britain’s Conservative Party.   

But it will be difficult this time around because Trump’s economic nationalism has hurt American workers, particularly in states that were critical to Trump’s 2016 win. 

Manufacturing has suffered as tariffs raised prices for imported parts and materials. Hiring has slowed sharply in Pennsylvania, Michigan, and other states Trump won, and in states like Minnesota that he narrowly lost. 

The trade wars have also harmed rural America, which also went for Trump, by reducing demand for American farm produce. Last year China bought around $8.6 billion of farm goods, down from $20 billion in 2016. (A new tentative trade deal calls for substantially more Chinese purchases.)

Meanwhile, health care costs continue to soar, college is even less affordable, and average life expectancy is dropping due to a rise in deaths from suicide and opioid drugs like fentanyl. Polls show most Americans remain dissatisfied with the country’s direction. 

The consequences of Trump’s and the Republicans’ excessive corporate giveaways and their failure to improve the lives of ordinary working Americans are becoming clearer by the day.

The only tricks left to Trump and the Republicans are stoking social and racial resentments and claiming to be foes of the establishment. But bigotry alone won’t win elections, and the detritus of the tax cut makes it difficult for Trump and the GOP to portray themselves as anti-establishment. 

This has created a giant political void, and an opportunity. Democrats have an historic chance to do what they should have done years ago: Create a multi-racial coalition of the working class, middle class, and poor, dedicated to reclaiming the economy for the vast majority and making democracy work for all.  

The Rich Really Do Pay A Lower Tax Rate Than Others

The charts above are from The New York Times. They show the total tax rate paid by all income groups in this country (total of federal, state, and local taxes). The United States has traditionally had a progressive tax system. That means that those who make more money pay a higher tax rate than those who make less. Republicans (whose main constituency is the rich) don't like progressive taxation.

Note in the top chart, the progressive taxation was working in 1950. As income rose, so did the total tax rate, and for the rich that rate was substantially higher than for other groups (about 70%). Republicans will tell you that inhabits growth and hurts the economy, but the 1950's was actually a booming economy for the United States.

About 1980, the Republicans gained control of the government, and they immediately began to lower the taxes for the rich (mainly the top 5%). The administrations of Reagan, Bush II, and Trump substantially lowered the tax burden on the rich, while leaving the tax burden on everyone else about the same as it was. The result is shown in the bottom chart. Now it is a fact the the richest Americans actually pay a smaller percentage of their income (smaller tax rate) than any other group in the country (including the poor).

The Republicans told us this would grow the economy and increase wage for everyone. That has not happened. All it has done is fatten the bank accounts of the rich and balloon the deficit and national debt of our federal government.

Here's is part of an excellent article by David Leonhardt in The New York Times on this:

Almost a decade ago, Warren Buffett made a claim that would become famous. He said that he paid a lower tax rate than his secretary, thanks to the many loopholes and deductions that benefit the wealthy.

His claim sparked a debate about the fairness of the tax system. In the end, the expert consensus was that, whatever Buffett’s specific situation, most wealthy Americans did not actually pay a lower tax rate than the middle class. “Is it the norm?” the fact-checking outfit Politifact asked. “No.”

Time for an update: It’s the norm now.

For the first time on record, the 400 wealthiest Americans last year paid a lower total tax rate — spanning federal, state and local taxes — than any other income group, according to newly released data.

The overall tax rate on the richest 400 households last year was only 23 percent, meaning that their combined tax payments equaled less than one quarter of their total income. This overall rate was 70 percent in 1950 and 47 percent in 1980.

For middle-class and poor families, the picture is different. Federal income taxes have also declined modestly for these families, but they haven’t benefited much if at all from the decline in the corporate tax or estate tax. And they now pay more in payroll taxes (which finance Medicare and Social Security) than in the past. Over all, their taxes have remained fairly flat.

The combined result is that over the last 75 years the United States tax system has become radically less progressive.

The data here come from the most important book on government policy that I’ve read in a long time — called “The Triumph of Injustice,” to be released next week. The authors are Emmanuel Saez and Gabriel Zucman, both professors at the University of California, Berkeley, who have done pathbreaking work on taxes. Saez has won the award that goes to the top academic economist under age 40, and Zucman was recently profiled on the cover of Bloomberg BusinessWeek magazine as “the wealth detective.”

They have constructed a historical database that tracks the tax payments of households at different points along the income spectrum going back to 1913, when the federal income tax began. The story they tell is maddening — and yet ultimately energizing.

“Many people have the view that nothing can be done,” Zucman told me. “Our case is, ‘No, that’s wrong. Look at history.’” As they write in the book: “Societies can choose whatever level of tax progressivity they want.” When the United States has raised tax rates on the wealthy and made rigorous efforts to collect those taxes, it has succeeded in doing so.

And it can succeed again. . . .

The American economy just doesn’t function very well when tax rates on the rich are low and inequality is sky high. It was true in the lead-up to the Great Depression, and it’s been true recently. Which means that raising high-end taxes isn’t about punishing the rich (who, by the way, will still be rich). It’s about creating an economy that works better for the vast majority of Americans.

In their book, Saez and Zucman sketch out a modern progressive tax code. The overall tax rate on the richest 1 percent would roughly double, to about 60 percent. The tax increases would bring in about $750 billion a year, or 4 percent of G.D.P., enough to pay for universal pre-K, an infrastructure program, medical research, clean energy and more. Those are the kinds of policies that do lift economic growth.

One crucial part of the agenda is a minimum global corporate taxof at least 25 percent. A company would have to pay the tax on its profits in the United States even if it set up headquarters in Ireland or Bermuda. Saez and Zucman also favor a wealth tax; Elizabeth Warren’s version is based on their work. And they call for the creation of a Public Protection Bureau, to help the I.R.S. crack down on tax dodging.

I already know what some critics will say about these arguments — that the rich will always figure out a way to avoid taxes. That’s simply not the case. True, they will always manage to avoid some taxes. But history shows that serious attempts to collect more taxes usually succeed.

Ask yourself this: If efforts to tax the super-rich were really doomed to fail, why would so many of the super-rich be fighting so hard to defeat those efforts?

Yes - The Middle Class In Shrinking In The U.S.

Democrats have been warning Americans for years now that the Republican economic policies are bad for American workers. Those policies favor the rich at the expense of other Americans. As the chart above shows (from the Pew Research Center), those policies have resulted in a shrinking of the middle class.

In 1971, before the GOP re-instituted their "trickle-down" economic policies, about 61% of Americans fell into the middle class income category. That has now been reduced to 51% or 52% -- a drop of 9 to 10 points. If we don't vote the Republicans out of power and change the economic policy to one fairer to all Americans, the middle class will continue to shrink (and the lower income class will continue to grow).

The second chart shows the income level needed to be considered middle class in the country as a whole (according to family size. For instance, a family of three would be considered middle class with a salary of at least $45,195.

Of course, not every community is the same, and it takes more to be labeled as middle class in some communities than others.

Which category does your family fall into -- lower income, middle income, or higher income? If you would like to know where you rate, the Pew Research Center has a tool to let you find out (in your own particular community). You can go here to access the tool.

The Republicans War On Unions Is A Class War

The Republican Party has never liked labor unions, and they have fought against them for decades. While the Democrats controlled Congress, the GOP war on unions wasn't successful. But about 1980, with the election of Ronald Reagan, the Republicans gained enough power to start chipping away at union power in the country. That, and a very effective propaganda campaign by them against unions (which had started years earlier), allowed them to reduce both the power of unions and the membership in those unions. That was disastrous for the American middle class.

The chart above (from the Economic Policy Institute) shows the effect unions had on the sharing of rising productivity (in the form of rising wages), and the effect of the decline of unions. Note that as union power grew, rising productivity was shared between companies (i.e., the top 10% who owned those companies) and workers. Both groups benefitted, and it helped to create a vibrant and growing middle class in this country.

But as the Republicans chipped away at the power of unions and the right of workers to unionize, the share of rising production that went to the top 10% grew and the share that workers got decreased. It has gotten to the point that the share of income going to the top 10% has reached levels not seen since the 1920's. And the share going to workers has stagnated.

This has resulted in the largest gap in income between the rich and the rest of America since the 1920's, and it's still growing. The recent Republican tax plan (which gives huge cuts to the rich and not much to workers) will stimulate the growth of that income gap even faster.

The Republican attacks on unions (and their massively unfair tax plan) are nothing less than a class war -- undertaken on behalf of the rich and against the working and middle classes. And it is resulting in a huge redistribution of income -- from most Americans to the richest Americans.

We must change this before we see a replay of the Great Depression. And the only way to do that is to kick the GOP out of power. We must flip Congress to control by the Democrats in November of 2018 -- and then hold Democratic feet to the fire to change economic and tax policy to be fairer to all Americans.

Congressional GOP's Tax Plan Is Wildly Unpopular W/Public

The Republicans, with the support of Donald Trump, is trying to ram through Congress a tax plan that they claim will mostly benefit the middle class. But the American public is not buying that.

The chart above is from the website fivethirtyeight.com. It shows the average of five credible polls on the Trump/GOP tax plan, and compares that to the public's opinion on other tax cuts in the past. Note that every other tax cut in the past has a net approval rating from the public (ranging between +4 and +25). The Trump/GOP tax plan is different. It has a net approval rating of -14. That -14 rating is worse than the tax increases of 1990 and 1993.

Let me repeat that. The Trump/GOP tax cuts are less popular than the 1990 Bush I tax hike or the 1993 Clinton tax hike. That's pretty bad when polls have shown the public would support a tax cut. Why is this one so unpopular? The charts below show why. The public knows the GOP plan will give corporations a huge tax break, and they believe the wealthy will also get a tax break. But only 8% to 37% believe most Americans will get a tax cut.

Americans think the working and middle classes need a tax cut, and they would support a cut for those groups. But they don't want a cut for the rich and corporations -- the two groups that are currently doing better economically than ever before.

The charts below use information in a new Economist / YouGov Poll -- done between November 26th and 28th of a random national sample of 1,500 adults (including 1,319 registered voters), with a 3.2 point margin of error.

The GOP Wants To Give You A Tax Cut (If You're Rich)

 (Cartoon image is by Ed Wexler at cagle.com.)

Donald Trump campaigned on giving all Americans a tax cut, especially the middle class. But after becoming president, he released an outline of his tax cut plan, and guess who gets the bulk of those tax cuts? That's right -- it's the corporations, the Wall Street bankers and hedge funds, and the rich. If you make less than a quarter of a million dollars a year, the cuts for you are negligible or nonexistent. He lied!

Now we have the GOP-dominated Congress saying they are going to take up tax "reform" ( a euphemism for tax cuts). They are telling the same lie that Trump told -- that their "reform" will include tax cuts for the middle class. It won't.

If that was true, Democrats would love to join them in voting for it. Democrats sent Senate Minority Leader McConnell a letter saying they would be happy to join in cutting taxes for the working and middle classes (but wouldn't support tax cuts for the richest people).

What was McConnell's response? Was he thrilled that Democrats would join Republicans in cutting taxes for the middle class? Not at all. His response was that the Republicans would use budget reconciliation (which cannot be filibustered and only requires 51 votes) to pass their tax reform. They would try to pass the tax cuts without any Democratic votes (like they tried to do with health care).

Why would they do that? Because their "reform" is really just a way to give corporations, Wall Street banks and hedge funds, and the rich massive tax cuts. They're not interested in helping the middle class (and definitely not the working class), and if those groups get any cut at all, it won't be enough to notice. The Republicans make a lot of promises to voters to win elections, but once those elections are over they return to rewarding their true constituency -- the rich.

If you really think the Republicans are going to give you a tax cut, then you are either rich, a Trump voter, or as stupid as a Trump voter.

(Cartoon image is by Dave Granlund at davegranlund.com.)

Looking At Trump's Very Bad Budget Proposal

Donald Trump has released his budget proposal -- and it's even worse than feared. The chart above shows how the discretionary spending would occur under Trump's budget plan. Note that the military budget grows larger, and will comprise about 59% of the entire discretionary budget. That means that all other spending (spending on programs that actually benefit American citizens) will make up only 41% of the discretionary budget.

This country already spends more on the military than the next 10-12 biggest spenders combined -- more than 40% of the entire world's military spending. The idea that we need to spend more on the military is ludicrous. And don't expect any of this new money to find its way to our soldiers, sailors, Marines, or airmen. It will all be funneled to the corporations in the military-industrial complex.

And how is this new military spending going to be paid for. A huge hunk of it will come from cuts in every domestic program -- cuts to education, cuts to the EPA, cuts to Agriculture, cuts to help for the poor (food stamps, children's lunches, welfare, Meals on Wheels), cuts to Medicaid ($600 billion more than the $800 billion already in Trumpcare) and many other programs that help American citizens. In other words, he's throwing the poor, the working class, and the middle class under the bus to give more to our already bloated military -- and to provide huge new tax cuts for the corporations and the rich.

But even the huge cuts to programs that help Americans won't provide enough money to pay for the increase in military spending and the new tax cuts for the rich and corporations. To make up the difference he depends on some ridiculous and incompetent accounting tricks and some wishful magical thinking.

He say his his budget will bring in more than $2 trillion in new government revenues due to an increase in economic growth (growth above 3%). And that money will make up the shortfall in the budget. But he's also said that same money would pay for his tax cuts to the rich and corporations. In other words, he's counting that money twice (an accounting trick that no reputable accountant would do). That money can't be used to pay for two different things.

But it's just wishful thinking anyway. Tax cuts don't produce economic growth, especially when they are limited to the rich and the corporations. The budget would take much money out of the economy with the cuts to nearly every government program, while reducing significantly the revenue received from the rich and corporations. It won't grow the economy at all, but it will balloon the deficit and significantly increase the national debt.

If you thought the budget proposed by Speaker Ryan the last few years was bad (and it was), then you should be shocked by the Trump budget. It's nothing short of a disaster. It will hurt the country and most of its citizens.

Here's what Lindsay Koshgarian of the National Priorities Project had to say about Trump's ridiculous budget:

We knew some of what to expect in President Trump’s first full budget proposal, based on his first budget blueprint and foreboding media stories. What we didn’t know was the full extent of whom Trump’s budget would seek to help, and at what cost.

War on the Poor: Trump’s budget declares war on those struggling to make it, regardless of income. The Trump budget makes massive cuts to Medicaid, food stamps, federal student loans, children’s health insurance, disability insurance and more.

Just Plain War: The United States military budget is already higher than at any point during the hyper- militaristic Reagan years. Trump’s proposal is to ramp this spending up even further, all while making drastic cuts to diplomacy and foreign aid programs that work to head off conflicts around the world. In the absence of any clear, overarching foreign policy strategy, this combination is asking for war.

And it keeps getting worse: after gutting these programs in 2018, Trump wants to keep the cuts going for the next ten years. A discretionary domestic cut of ten percent – and as high as thirty percent to some programs – would be followed by additional cuts of two percent every year for the next ten years. Talk about trying to draw blood from a stone.

Meanwhile, the budget warns that the planned annual increases for the military after 2018 are just placeholders, with the real numbers to be worked out later. One may be tempted to think, in light of candidate Trump’s anti-interventionist stance (if you can remember back that far), that this future assessment might moderate military spending to better align it with a more reserved American military stance. But that would be naïve – if President Trump has shown us anything with this budget, it’s that he will seek to increase military spending, even if he doesn’t know why he’s doing it.

Before any of this comes to fruition, Congress will debate their own budget priorities. Decisions in Congress in the next weeks and months will set a new course for military spending, our social safety net, and a little thing called climate change for years to come. 

If you want a say in what that future looks like, now is a good time to pick up the phone and call your representative.