US Section of the IMT: Trump's "Big League Tax Reform"

[Sentinel]

“We have a once-in-a-generation opportunity to do something big,” announced Gary Cohn, Trump’s top economic advisor, when unveiling the administration’s new tax plan. That “something big” is the transfer of up to $7 trillion into the pockets of the capitalists in tax breaks over the next decade.

With the US currently sitting on its highest level of debt since WWII, the only answer to how everything would be paid for was that “the plan will pay for itself”—as long as the economy maintains a sustained growth rate of 4.5%—a level not seen in decades.

To accomplish this feat, the proposal aims to slash the corporate tax rate by more than half—from 35% to 15%—and eliminate taxes targeted at the wealthy, such as the estate tax, which targets only the wealthiest 0.2 percent. But high taxes don’t cause economic slumps, and lower taxes aren’t a guarantee for investment and growth. This hastily assembled plan is an attempt to square the circle of capitalist crisis.

Swiftly approaching the 100-day mark and under pressure to show that he was fulfilling his campaign promises, Trump revealed that he would be announcing a new tax plan within five days. Just days earlier, Treasury Secretary Steven Mnuchin said he expected an “aggressive agenda” could deliver reforms by August. While this may explain the incomplete nature of the proposal, the announcement reflects the growing pressure of the more mainstream wing over the “economic nationalist” wing of Steve Bannon and Peter Navarro, a “trade skeptic.”

Trump certainly is beating on the big drum with this economic plan. These taxation counterreforms are of course bound to accelerate the capitalist crisis deeply. The disappointment of those who had had illusions in him protecting/rebuilding american industries (with which money), and I'm not talking about that wing of his advisors, "the economic nationalists" who are getting the boot as we speak, but those laid off workers and others who voted on him for that reason and/or as a protest against the establishement, will be huge.

Trump also promises to simplify taxes, reducing the number of tax brackets from seven to three, and doubling the standard deduction. To pay for these cuts, Trump is eliminating nearly all other deductions—including a popular federal deduction for taxes paid at the state level which would cost workers an estimated $1.1 trillion in taxes. The “‘populist” overhaul of the tax code is, in reality, a massive tax cut for the bourgeoisie with the working class footing the bill.

Everywhere where the far right populists have gotten into power during this crisis, they have been forced to administrate austerity upon the masses to finance the tax cuts for the rich that are needed to maintain the profits. In Finland for example, support for the True Finns is down to 8% from 20% at most, after sitting down in a right wing coalition government; in Norway the Progress party is in a similar situation.

Trump and his movement will face the same fate, and there are therefore very good prospects for a sharp left turn in the US politics. Naturally, as the experiece of Sanders has shown, that can not happen on the platform of the Democratic party, that but a new Labour party formation, and that is the problem atm.

Time is short but such a party needs to be formed, and revolutionaries in turn need to influence that movement away from reformism, as the reformist leadership quickly proves inadequate - something I think there will be a good chance for in a new and fresh party of that kind, during this time of crisis.

The article concludes with:

As Marx explained, the bourgeois state is “but a committee for managing the common affairs of the whole bourgeoisie,” which requires the ability to levy taxes. Nonetheless, some aspects of the state can become a strain on the ruling class, especially in times of crisis. Tax revenue comes from two sources: either cut into the profits of the capitalist class or cut into the wages of the working class. While there can be all kinds of secondary causes, the crisis of the capitalist system is a crisis of overproduction. All attempts by the ruling class to restore balance to the economic equilibrium will only upset the political and social equilibrium.

Years of austerity and a weak recovery have left no shortage of kindling that could spread like wildfire with any spark. It was the imposition of taxes the Stamp Act that set off the events of the first American Revolution—there’s no saying exactly when or what will set off the next one.

http://socialistappeal.org/news-anal...ax-reform.html

[ckaihatsu]

“We have a once-in-a-generation opportunity to do something big,” announced Gary Cohn, Trump’s top economic advisor, when unveiling the administration’s new tax plan. That “something big” is the transfer of up to $7 trillion into the pockets of the capitalists in tax breaks over the next decade.

This winds up being an excellent argument for our side, since all we have to do is democratically pose the question to people, something not actually being done regarding the tax plan itself:

Should there be welfare for the rich, or not -- ?


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Trickle-down economics

From Wikipedia, the free encyclopedia

This article is about the political term. For the marketing phenomenon, see trickle-down effect.
"Trickle-down economics", also referred to as "trickle-down theory", is a term associated with laissez-faire capitalism in general and more specifically supply-side economics, often used to characterize economic policies which favor the wealthy or privileged while being framed as good for the average citizen.

In recent history, the phrase has been used by critics of supply-side economic policies, such as "Reaganomics". David Stockman, who as Reagan's budget director championed Reagan's tax cuts at first, but then became critical of them, told journalist William Greider that the "supply-side economics" is the trickle-down idea: "It's kind of hard to sell 'trickle down,' so the supply-side formula was the only way to get a tax policy that was really 'trickle down.' Supply-side is 'trickle-down' theory."[1][2] Political opponents of the Reagan administration soon seized on this language in an effort to brand the administration as caring only about the wealthy.[3]

Criticisms[edit]

The economist John Kenneth Galbraith noted that "trickle-down economics" had been tried before in the United States in the 1890s under the name "horse and sparrow theory." He wrote, "Mr. David Stockman has said that supply-side economics was merely a cover for the trickle-down approach to economic policy—what an older and less elegant generation called the horse-and-sparrow theory: 'If you feed the horse enough oats, some will pass through to the road for the sparrows.'" Galbraith claimed that the horse and sparrow theory was partly to blame for the Panic of 1896.[14]

In the 1992 presidential election, Independent candidate Ross Perot called trickle-down economics "political voodoo."[15]

In the same election during a presidential town hall debate, Bill Clinton said, "What I want you to understand is the national debt is not the only cause of [declining economic conditions in America]. It is because America has not invested in its people. It is because we have not grown. It is because we’ve had 12 years of trickle-down economics. We’ve gone from first to twelfth in the world in wages. We’ve had four years where we’ve produced no private-sector jobs. Most people are working harder for less money than they were making 10 years ago."[16]

In New Zealand, Labour Party MP Damien O'Connor has, in the Labour Party campaign launch video for the 2011 general election, called trickle-down economics "the rich pissing on the poor".[17]

A 2012 study by the Tax Justice Network indicates that wealth of the super-rich does not trickle down to improve the economy, but tends to be amassed and sheltered in tax havens with a negative effect on the tax bases of the home economy.[18]

https://en.wikipedia.org/wiki/Trickle-down_economics