There are reports that the Trump Administration is considering additional tax cuts specifically targeted toward the middle class. The political aspect of this possibility lies in its attractiveness as a campaign promise in 2020. The ideological aspect is neoliberal: lower taxes are believed to stimulate investments that stimulate job creation (the “trickle-down” theory). These cuts follow those made in 2017 which changed rates in dramatic fashion. For the first time in US history, “labor income was taxed at a higher rate than capital income”. Perversely, the tax cuts of 2017 have not delivered on the promise of increasing business investments: “15 months after it took effect, business investment has actually been contracting, falling 1 percent and 3 percent in the past two quarters.” Finally, the current tax rates are profoundly regressive: “the 400 richest Americans now pay a total tax rate of about 23% — that’s lower than the bottom half of U.S. households, who pay a rate of about 24%.” What is especially curious is how little outcry has developed as the less well-off begin to subsidize the life styles of the better-off.
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