What is wrong with the Republicans finally getting to implement the agenda they have been carping about ever since Ronald Reagan left office? In a word, everything.
Of course, even though they have not gotten everything they wanted since Reagan, the economic policy followed by Bush I, Clinton, Bush II, and Obama still adhered to the general themes laid out during the Reagan years. Minimal taxation for the wealthy and corporations, decreasing overall deductions for the middle class, expanded deductions for corporations with lowered tax rates for capital gains. There has been an on-going outsourcing of government services at all levels of government along with a near total deregulation of banking. And last of all a new common denominator for how government structures trade agreements and government projects, both are designed to improve the profitability of corporations.
The new tax plan proposed by Republicans is built on the foundation of the above Reagan era economic thinking with exactly zero thought about what the problems are in our economy that need to be addressed. And how can the tax code be used to help solve the problems.
Our economic problems are multiple, but the most pressing problem is our debt. Not the nation’s debt. The debt of the people who live here. Is there any provisions to reduce debt. especially the debt owed by the 99%? Nothing, in fact the plan exacerbates individual debt. Wage stagnation is a huge problem. For the 99%, their wages have stagnated, for the 95% their real wages have actually dropped when measured against inflation. There is a tool that has been used in the past to help wages keep pace with inflation, it’s called taxes on the wealthy and corporations. Employers would rather raise wages and pay a lower tax rate than pay lower wages and pay a higher tax rate. These two issues, personal debt and wages, combine to keep our economy on a dual track where the wealthy and the corporations are gathering up all the available money supply. They are not investing in expansion, because the demand is not there. Demand is not increasing enough to push up wages and add jobs. And, at the end of the day, demand drives the economy. We increase demand by putting more money in the pockets of the 98%, the people who will by necessity spend it all.
Flipping the GOP tax plan on it’s head, restore full medical deductions for everyone and restore full interest deductions for everyone. Dramatically increase taxes on the wealthy. End lower tax rates on capital gains. Introduce a job guarantee, free public college tuition, tax deductions for all post high school education in the private sector, a living wage for a minimum wage, increase SS retirement payments and eliminate family ceilings, and of course Medicare for All.
These things and more will fix our economy so tat it can grow organically. Instead of thinking about the Federal debt, think about the debt of families all across the nation. If their debt is lowered, if their wages are increased, if their opportunities for jobs and education are real, then maybe, just maybe we can have resurgence of a Middle Class.