Dylan Hatch, Political Writer 10-24-17
On January 20, 1981, Ronald Reagan was inaugurated President of the United States of America with a new, promising and boldly patriotic agenda, marking a major step in America’s push to radical Neoliberalism (the idea of an utterly free market) into mainstream politics. In the new rhetoric that would go on the define the new era of American economics and the Republican Party, Reagan promised us unprecedented tax cuts by providing for the richest Americans. The benefits to these “rich-first” policies would, in theory, trickle-down so that the opportunity is brought to the middle and bottom classes as well. After all, Reagan was elected because of his populist, social focus on the middle class. However, this populist message was not, in anyway, conveyed in practice or expressed in his technical policies. The results and legacy of his administration can show us the dangers of radical right economics as well as what we can expect during the era of Trump, where our nation’s economic policies and rhetoric once again strongly resemble that of Reagan.
Throughout the 80s, wages for the top 1% of Americans raised by about 80% while staying roughly the same for the bottom 99%, according to the Economic Policy Institute, while taxes for the 1% were slashed drastically. These numbers are just some of many that prove Republican tax cuts helped the rich get richer and the poor continue to be stranded in the situation they are in. Between 1979 and 2007, paycheck income of the top 1 percent of U.S. earners increased by over 256 percent. Meanwhile, the bottom 90 percent of earners have seen little change in their average income, with just a 21 percent increase from 1979 to 2015. Today, the effects of this are still being seen as the gap between worker and CEO pay is eight times larger in 2016 than in 1980, according to inequality.org. Today, it is obvious that the American people were not truly the priority of that administration or any Republican Administration to follow.
No matter your political stance, you cannot justifiably deny credible records that prove the theory of trickle-down economics, however good it may be in theory, has failed. To continue this outdated rhetoric is to only worsen the biased economic climate that we find ourselves in. In a capitalist system, the amount of wealth one has is the amount of power they hold. History has told us time after time that no institution is trustworthy of mass concentration of power, which is why it is crucial to establish a progressive tax system that does not favor the rich but distributes the wealth (power) among all classes as much as possible. It is simply the democratic and populist way.
The Reagan Administration has been over for quite some time. However, the inequality it caused and the rhetoric it has inspired continues to stunt our nation’s democracy, as we see with the election of Donald Trump. Trump ran on a similar agenda to Reagan. He claimed to be a champion of the working class and he was seen, by many people, to epitomize American, capitalistic power. However, what his supporters don’t realize is that this capitalistic power, should be able to, but simply cannot co-exist with being a champion of the working class. President Trump’s tax plan has two basic tenets: slash corporate taxes from 35% to 15% (costing us an estimated $3 to $7 trillion over the next decade, according to the bi-partisan Committee for a Responsible Federal Budget) and to reduce the seven tax brackets for individuals down to only three (10%, 25%, and 35%). Although this would slash taxes for everyone, as a share of personal income, the top 1% will heavily reap the benefits with a tax cut average of 5.1% (in contrast, the low- and middle-income families that will see tax cuts of between 1.3% to 1.7%). This plan is destined to follow the footsteps of Reagan’s similar plan: exponentially growing inequality and the exploitation of capitalism in favor of the rich.
At a naïve and desperate time in the 1980s, it is understandable to choose the path of an outsider that holds rhetoric that’s been yet to be tested in modern American politics. However, we are no longer naïve to the dangers of tax plans that perpetuate inequality. We have been down that road before and see that it ends in only broken promises. In the end, we are all Americans that just want what’s best for our people and our nation. Despite whether you are left or right, you simply can not deny that we, the American people, were not given what we were promised by Reaganomics. It is understandable to believe that the middle and lower classes need less of a tax burden, but providing tax cuts for essentially only the rich has proven to be not be the path for middle-class prosperity.
As an online journalist in today’s flood of misinformation, you are fully justified to believe I’m flawed. This is exactly why I urge you, for the sake of our nation and your future, to look for yourself at the links I’ve provided. In these credible sources, you can continue to learn about the dangers of inequality and biased tax cuts as well as the entirety of Trump’s proposed tax changes. Alongside this, you can follow Berning Media Network for more independent news and true populism in the era of Trump. Thank you for reading and, as always, stay informed.
Complete List of Trump’s Changes in Tax Policy:
On the personal side:
– Reduce personal income tax rates for most taxpayers by creating a three-bracket system with rates of 12 percent, 25 percent and 33 percent on regular income, with top rates applying to taxable income exceeding $225,000 for married couples, $112,500 for all others.
– Capital gains tax rates in the three brackets would be 0, 15 and 20 percent. Carried interest would no longer be taxable at the reduced capital gains rates.
Repeal the Alternative Minimum Tax.
– Eliminate the Net Investment Income Tax on high-income taxpayers that was enacted as part of President Obama’s healthcare reforms.
– Increase the standard deduction from $12,600 to $30,000 for married couples, and to $15,000 for all other taxpayers.
– Cap the total value of all itemized deductions at $200,000 for married couples, $100,000 for all other taxpayers.
– Eliminate personal and dependent exemptions, which in 2016 are $4,050 per family member.
– Introduce a new dependent exemption, nominally for child care costs, but apparently available to all families with children under 13 and incomes under $500,000 (married) or $250,000 (all others).
On the corporate side:
– Reduce corporate tax rate to 15 percent.
– Optional full expensing of capital investments (in exchange for giving up deductibility of interest payments).
– Repeal manufacturing deduction and all other tax credits except R&E credit
– One-time deemed repatriation tax on offshore profits at 10 percent rate.