World Politics News   Articles for World Politics Course

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.