Trump’s tax plan has dropped and is a huge giveaway to the owners of capital. Despite many promises on the campaign trail to put people back to work and to pay attention to the needs of working people and the unemployed, Trump’s plan is, economist Marshall Steinbaum notes, Republican tax policy on steroids, larded with giveaways to the rich and those who live off their wealth. He joins us to explain how to fight it, and why the fight over tax policy is at the heart of the fight against inequality.
We have eliminated progressive taxation in this country or vastly reduced it and the effect of that has been to increase the incentives that rich people and powerful people have to dominate the economy to their own benefit. We used to have a statutory maximum individual income tax rate of 90% over a very high income and what that is is basically making it illegal to be rich. Not surprisingly, if you make it illegal to be rich, people don’t want to be as rich as they used to be. I was having this debate about the history of progressive taxation in the United States. There were no rich people by today’s standards in 1960. Like none. Now we have tons of them and they are richer than they ever were before and that is because we stopped taxing them so it became more worthwhile to earn more. If you are wondering why the owners of one gigantic profitable corporation would want to merge with another gigantic profitable corporation and cut tens of thousands of workers and chop off their supply chain and raise prices to consumers because you have no other place to go, that is exactly why. If their tax rates were still 90%, it would be illegal to increase their income from where it currently is, more or less, and there would be no incentive to do that.
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