Hedrick Smith, a truly great American journalist who, among many other positions, once served as Washington bureau chief for the New York Times, is out with some new and scathing analysis of the GOP tax schemes making their way through Congress.
In his latest post, Smith derides the tax cut plans as feeding America’s “cancer of inequality.”
Here are some of the more powerful excerpts:
“The most lethal damage to American society embedded in the Republican tax plan now being rushed through Congress is that it will metastasize the cancerous economic inequality that has been eating away at the health and fabric of American democracy over four decades.
Three years ago, in his monumental work, Capital in the 21st Century, the French economist Thomas Piketty warned that ‘When the rate of return on capital exceeds the rate of growth of output and income,… capitalism automatically generates arbitrary and unsustainable inequalities that undermine the meritocratic values on which democratic societies are based.’
As evidence, Piketty points to the tumor of concentrated wealth accumulated by American’s super-rich 1% since the late 1970s while middle class incomes have stagnated. Despite long-term growth, his studies show the impact of wedge economics: Trillions of dollars have shifted from the middle class paychecks to ballooning stock grants for CEOs and the bulging portfolios of billionaires….
Piketty’s analysis pin-points the fatal pathology built into the Republican tax plan: Its focus on corporate tax cuts will accelerate the malignancy of inequality….this is a tax cut engineered to fuel what Professor Piketty warned is the most dangerous dynamic of modern market capitalism – skyrocketing gains for investors earned at the expense of slow-growing pay for most people who work for a living. It’s bound to lead, he says, to a self-perpetuating American plutocracy, like the 18th century European aristocracy and “hierarchy of wealth” portrayed by Jane Austen and Balzac, Dickens and Victor Hugo.
That scenario mocks the economic populism that powered Donald Trump’s race for the Presidency and that won the support of working class, blue-collar and rural Americans – the tens of millions left jobless or financially disabled by the rush of American multi-national corporations to cash in on globalization.
For all his mouthy, ostentatious anti-elitism, Trump has shelved campaign populism to forge an alliance with the Republican political establishment on behalf of the super rich, who bankrolled critical GOP campaign victories in 2016 and kept Congress in Republican hands….
In all, business interests are reaping $2.5 trillion in tax cuts, paid for in part with a 10% tax on overseas U.S. corporate earnings and a change in some corporate tax deductions, but mostly financed by pinching individual taxpayers.“
After drawing obvious parallels between the tax policies of Trump and the disastrous efforts of Ronald Reagan and George W. Bush, Smith offers this bottom line take:
“In short, the Trump game plan fits a pattern of middle class rhetoric and elite profits – a pattern that many ordinary taxpayers have evidently deciphered. A recent poll by the University of Maryland found that fewer than one in four voters overall and fewer than 40% of Republicans support lower taxes for people making more than $200,000 and 60% of the public opposes lowering corporate tax rates. Not that public opinion is going to stop or reshape the tax-cut steamroller in Congress any more than the warnings of economist Thomas Piketty.”
Click here to read Smith’s entire essay.