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.
The chart above reflects the results of the Economist / YouGov Poll -- done between May 30th and June 2nd of a nationwide sample of 1,610 adults (including 1,436 registered voters). The margin of error for both groups is 3.2 points.
The chart above reflects the results of the Economist / YouGov Poll -- done between May 16th and 19th of a nationwide sample of 1,558 registered voters, with a 2.9 point margin of error.
Keeping taxes low for the richest households and corporations is the clearest legislative priority of the Trump administration and the Republican congressional majority. Many provisions of the 2017 tax law (often called the Tax Cuts and Jobs Act or the TCJA) are expiring this year. Extending these provisions would provide hugely disproportionate benefits to the richest households.
To illustrate the difference in benefits depending on household income, the range would extend between less than $0.35 per day for the poorest households to $860 per day for the top 0.1%. For the bottom 20% of U.S. households, extending these provisions would give them an average of less than $0.35 per day. For households in the second income fifth, the benefits would be $1.20 per day, and for the middle 20% of the income distribution, the benefits would be $1.80 per day. Yet for the richest 1% of households, the benefits would jump to $165 per day, while the top 0.1% would see benefits of $860 per day.
Besides being unfairly distributed, the cost of the overall tax cut is large enough to put huge stress on other parts of the economy, no matter how it’s paid for. The most damaging way to pay for this would be to enact large cuts in spending programs that provide benefits to economically vulnerable families. Last week, House Republicans approved a budget resolution calling exactly for these types of cuts, including $880 billion in cuts that will inevitably fall on Medicaid, the program that provides health insurance for low-income Americans who cannot otherwise afford it.
Medicaid is, by far, the largest program in the federal government aimed predominantly at alleviating poverty. In 2024 it provided health insurance coverage for over 80 million people each month. The juxtaposition of prioritizing lower taxes for the richest families while proposing steep cuts to the nation’s largest program aimed at alleviating poverty could not be more clarifying for the economic debate in front of us.
The benefits of extending expiring provisions to the TCJA are easy to summarize. They will boost incomes trivially for the large majority of families but significantly for the richest households, leading to greater income inequality. The costs of Medicaid cuts are a bit harder to summarize because they are so broad and will cascade far into the future. The summary of what these cuts will do is clear. They will greatly increase hardship and misery for already struggling families, they will reduce opportunities in the future for kids who will grow up less healthy and poorer because their families lack access to Medicaid, and they will put enough strain on the nation’s overall economy that they will make a future recession far more likely.
Low taxes for the rich and for corporations is the highest legislative priority of the Trump administration and congressional Republicans. To get there, they are willing to cut federal programs that are utterly vital to the incomes and security of vulnerable families. These cuts will not just cause harm to individual families, they will cascade, leading to hospital closures in rural counties, higher medical debt, lower earnings from future workers who will suffer from poorer health decades from now, and could even put upward pressure on federal budget deficits in the long run. In the very near term, these cuts will make the United States economy far more vulnerable to any recessionary shock. Nothing about this policy package—tax cuts mostly for the rich and benefit cuts for the vulnerable—is good for the vast majority of families in this country.
We have been expecting it, but the House has now taken the first steps to an insane budget. They approved (on a party line vote) a proposal to give tax cuts to the rich - and they would partially pay for that by cutting hundreds of millions of dollars from Medicaid.
It just shows they are not listening to the people who elected them.
Poll after poll has shown that huge majorities of Americans (including a small majority of Republicans) don't think the rich need a tax cut. They actually think the rich are not taxed enough! But while the public won't like more tax cuts for the rich, it is the cuts to Medicaid that will cause the most blowback.
Republican officials (and too many in their base) seem to think that Medicaid only goes to nonwhites in the large cities - and since those cities tend to vote blue, they won't be hurt. But they are going to find out that is simply not true.
Medicaid is badly needed by ALL of the poor - including whites and those living in rural areas. And losing Medicaid would not only hurt the rural poor - it would hurt everyone living in rural areas. That's because rural hospitals need it to stay in business.
Many rural hospitals have closed, and many more are in danger of closing. They are barely covering their costs. Losing the money they get from Medicaid patients would push them over the line, and they would have to close. It would mean rural patients would have to go to the nearest city if they needed hospital care, and that could be hundreds of miles from some rural areas.
This wouldn't just hurt the rural poor. It would hurt everyone living in a rural area - even those with private insurance or plenty of resources.
Rural voters voted for Republicans because they thought it would make their lives better. Congressional Republicans are now showing them they were wrong. Cutting Medicaid to give tax cuts to the rich is just putting a knife in the back of Rural people
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.
Why is this true? It is because one of our political parties (Republicans) has pursued (and continues to pursue) economic policies that favor the rich, does nothing for the working and middle classes, and actually punishes the poor.
The U.S. government does offer some assistance to the poor, but Republicans have made sure that assistance is minimal and most are required to work to receive it. They tend to believe the poor are just lazy and must be forced to work. They are wrong.
Government assistance is onerous and embarrassing, and most poor people would rather work than receive the assistance. But that work needs to offer them a way out of poverty - not just insure they remain poor.
There are two simple ways to drastically reduce the number of poor people in the United States.
The first is to raise the minimum wage to a livable wage. The current minimum wage is only $7.25 an hour. That is about $15,080 a year. The poverty level designated by the government is shown in the chart below.
Raising the minimum wage to a livable wage (at least $15 an hour) would instantly lift many families out of poverty.
But one more thing also needs to be done. The government needs to help working class and poor families with childcare. It doesn't help to make more if most of it goes to pay for childcare. President Biden tried to get childcare included in the laws he got passed earlier (assuring no family would pay more that 7% of income for childcare), but it was killed by the GOP.
A higher minimum wage, coupled with help to pay for childcare, would lift millions out of poverty. And would save millions in government assistance. That saving could be used to raise assistance for those who cannot work, and would help to reduce the federal deficit.
This makes imminent sense, but the Republicans will have none of it. They still think the right economic policy is to help the rich and corporations save on taxes. They seem to have no interest in helping the poor, the working class, and only give minimal assistance to the middle class. They say helping the rich to have more helps everyone. That has never been true.
This nation is rich enough to eliminate most (or all) poverty in its borders. But it will never happen as long as the Republicans have the power to dictate economic policy.
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.
We learned last Thursday that the U.S. economy grew at an annualized 2 percent rate in the first quarter of this year. That’s well above economists’ expectations of around 1.4 percent.
But if you didn’t get this news, you’re not alone. Good economic news doesn’t make it through the negative sludge of Fox News or Newsmax. It almost doesn’t get through the mainstream media, either.
There’s more good news on the economy. In the four years of Donald Trump’s administration, total spending on manufacturing facilities grew by 5 percent. During the first two years of Biden’s administration, manufacturing investment more than doubled. And about 800,000 manufacturing jobs were created.
These remarkable results are the outcome of Biden policies — the Inflation Reduction Act and its green technology provisions, the infrastructure bill, and the CHIPS Act.
What about inflation? Biden’s stimulative spending did boost inflation. But the news that’s not getting through to most Americans is that inflation is dropping. It has declined significantly from its mid-2022 highs above 9 percent. Consumer prices are now rising by about 4.9 percent annually — still a problem, but not nearly the problem it was. Inflation in the United States is now well under the levels in European nations that made no comparable efforts to stimulate their own economies.
I continue to believe that much of the remaining inflation is due to the outsized profit margins that many major businesses have seized for themselves. Even the IMF recently found this. I wish Biden would make an issue of those profit margins. They’re enriching those at the top while imposing a big penalty on everyone else.
And wages? For a while, real (adjusted for inflation) wages really were falling, and many economists were worried about rapidly rising unit labor costs. But now that inflation is subsiding, unit labor costs are moving in the opposite direction, and real wages are picking up again.
So why do so many Americans continue to think the economy is awful? According to the Gallup economic confidence index, Americans haven’t felt this bad about the economy since the global financial crisis in 2008 and 2009. In an NBC News survey conducted a few weeks ago, at least 74 percent of Americans said the country is on the wrong track. The University of Michigan’s Consumer Sentiment Index is also pessimistic.
Given all this, it’s not surprising that Joe Biden’s approval numbers have been stuck at around 43 percent.
That’s bad news for an incumbent president running for reelection. History shows that presidents tend to lose reelection bids when about 70 percent of Americans think the country is on the wrong track. They tend to win when fewer than half of Americans think that.
So the obvious question is, why are Americans are feeling so bad about an economy that’s relatively good?
One reason, I think, is a general sense of dread — centering on Trump, DeSantis, and Republican lawmakers in Congress — that seems to affect everything else. (I don’t know about you, but I sometimes have difficulty getting to sleep, worried about the rise of authoritarian fascism in America.) A recent study found that headlines have grown starkly more negative, conveying anger and fear.
Then, too, there’s a kind of national pandemic-related PTSD from which many of us are still suffering.
But I think the deeper reason Americans don’t feel very good about the economy is that is that the vast population of working non-college grads — some two-thirds of Americans — are still bogged down in dead-end jobs lacking any economic security, while struggling with many costs (such as housing, child care, and education) that continue to soar.
In other words, the economy is getting better overall — but overall has become a less and less useful gauge as the rich get richer, the poor grow poorer, and the working middle is under worsening siege.
There’s an undeniable feeling of excitement when you turn your daily credit card swipes at Starbucks into first-class airfare or a weekend jaunt to Costa Rica. Thanks to mobile banking and the ease of autopay, you can scrupulously avoid any additional costs by paying your monthly bill in full. Free flights and exclusive discounts abound.
Something for nothing, right?
Not exactly nothing. Credit card perks for educated, usually urban professionals are being subsidized by people who have less. In other words, when you book a hotel room or enjoy entry to an airport lounge at no cost, poor consumers are ultimately footing the bill.
Demand for rewards is only going up. In 2016, Chase launched its Sapphire Reserve card. The card comes with perks, bonuses and points multipliers that for big-spending travelers and diners are worth far more than its steep $550 annual fee. There was so much initial demand that Chase ran out of the metal slabs it prints the cards on. Sapphire’s enormous success set off a credit card perks war, with numerous banks flooding the market with sign-on bonuses worth thousands of dollars.
In 2022, the Federal Reserve published data showing that the cost of rewards, as a share of total transaction volume on credit cards, increased 25 percent from 2015 through 2021. This bonanza has helped affluent professionals flood Instagram with envy-inducing shots of white sand beaches, hotel suites and plush airport lounges.
But these high-income travelers are also less likely to carry balances that incur interest charges and late fees, which traditionally increase profits for card issuers. So, to offset the cost of paying lavish rewards to these consumers, banks have sought to maximize other usage-based revenues.
Enter interchange fees, or the money it costs merchants to accept noncash payments. A recent study at Stanford found that when credit card rewards increase, so do these fees.
The United States now has some of the highest credit card processing costs in the world, typically at 2 percent to 2.25 percent of every purchase. This is eight to nine times as much as the prevailing swipe fee in the European Union. The vast majority of merchants pass these costs on to consumers by charging more for their products — regardless of how one pays.
The result? Lower-income consumers are forced to pay higher prices on the goods they buy, but they rarely receive any benefit from rewards programs, according to the Federal Reserve, which has been tracking the distributional effects of card rewards. Its December 2022 report estimates an annual redistribution of $15 billion in rewards value from poorer people to richer people, from low-education people to highly educated people and from diverse communities to less diverse communities.
Put another way, credit card rewards are essentially a tax on less affluent consumers, who are much more likely to pay for their goods with cash, debit cards or standard credit products that accrue no such rewards.
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!
Some are trying to ration the bit of insulin they are able to buy -- taking less than the prescribed amount of skipping shots. They hope to make the drug go further. But this is putting their medical condition in jeopardy. And I don't think it's an exaggeration to say some are dying by doing this.
But what choice do they have. The drug companies are not going to lower the price unless they are forced to do it. To them, profits are more important than the lives or health of American citizens. It's greed gone crazy, and it's dangerous.
Democrats in the Senate tried to fix this last weekend. They included a $35 cap on insulin in the Inflation Reduction Act. That would make insulin more affordable to all those who need it. Unfortunately, the Senate Republicans agree with Big Pharma that profits are more important than lives. Using an arcane Senate rule, they stripped the $35 cap on insulin out of the bill -- and then voted down a Democratic effort to put it back in the bill.
The cap remains for those on Medicare. But millions of Americans are not old enough to be on Medicare. They still need the insulin though, and they will still have to pay the outrageous price demanded by the drug companies -- if they can afford it. If they cannot afford it, they could die quickly, or die more slowly by trying to ration the amount they could afford.
Republicans have once again shown that they don't care about Americans -- unless they are rich white men.
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.
The following is part of an article at MSNBC.com by Jarvis DeBerry:
In the state of Texas, there are almost 4 million poor people, by one recent count, but apparently few are penniless enough to meet the Lone Star State’s qualifications for Temporary Assistance for Needy Families. To qualify for TANF in Texas, a single caretaker with two children must have less than $1,000 in assets and bring in less than $188 per month. For a person working full time, $188 a month amounts to an hourly wage of $1.18. Such stinginess helps explain why, according to a report Wednesday from ProPublica, Texas ended its 2020 fiscal year with $281 million in federal TANF funds unspent.
Texas, one of four states that denied at least 90 percent of its 2020 TANF applicants, had the lowest approval rate in the nation, approving only 7 percent. That means successfully applying for such welfare funds in Texas is as rareas successfully applying for admission to the Massachusetts Institute of Technology or Yale University.
This is former President Bill Clinton’s conservative-appeasing welfare reform in action: Individual states, which were given the power to set their own rules for distributing welfare dollars, denying the poor life-sustaining help by drawing up the rules in a way that excludes most people who need help.
To put that another way: There aren’t so few people getting welfare because the demand for aid is so low; there are so few getting it because the supply of aid is being withheld by states choosing not to dispense it. Or, as previous reporting from ProPublica and The Guardian has noted, because those states are choosing to dispense TANF on things other than on welfare: including child protective services, anti-abortion clinics, Christian summer camps and programs to help people addicted to gambling.
Texas isn’t alone in its parsimony. Across the country, the states ended fiscal year 2020 with $5.2 billion in unspent TANF money. The amount of welfare dollars the states have not spent has doubled over the last 10 years as the number of approved applications has fallen by half, ProPublica reports. Our states holding on to $5.2 billion in unspent welfare dollars would be an outrage at any time but is especially awful considering that the fiscal year ended in the middle of a pandemic that exacerbated the country’s already embarrassing and unforgivably high rates of poverty and child poverty.
According to the Census Bureau, “The official poverty rate in 2020 was 11.4%, up 1.0 percentage point from 2019. This is the first increase in poverty after five consecutive annual declines. In 2020, there were 37.2 million people in poverty, approximately 3.3 million more than in 2019.”. . .
The main argument for welfare reform was that nothing is as bad as a poor family spending a lifetime getting aid from the government. Framing it that way miscasts poverty as a consequence of laziness. But in the same way that prosperity is more a function of advantage than of hard work, poverty is more a function of disadvantage than of laziness. And in a nation that cares so little about dismantling systemic disadvantage, there is something that’s exceedingly worse than a family languishing on welfare: a government granted money to help people who are poor deciding that it’s better to leave hundreds of millions of dollars unspent.
