When Barack Obama was elected, some naïve liberals heralded a new age of taxing the rich, relieving the poor, and aggressive financial reform. When Obama’s Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 turned out to be mostly a dud, left-wing voters realized that they had not elected a firebrand, nor a reformer, but a corporatist – a politician who believed in the corporate oligarchy and would work to regulate, but not fundamentally change its abusive nature.
Conservatives are now learning a similar lesson about the man they have elected President, one Mr. Donald J. Trump.
Trump has cast his tax reform plan in a conservative light, pledging to put wealth back in the hands of citizens. But evidence is growing that the POTUS – who probably thinks Mises is a herd of prairie animals and Hayek a misspelled canoe – is another corporate-crony President. In fact, he is more brazen (or less-dishonest, depending on your point of view) than Clinton or Obama on the subject.
Trump’s tax plan may take dollars out of the government’s coffers, but his administration will be anything but hands-off about how big business spends the extra loot.
For instance, the President recently hesitated lifting the Jones Act – a move badly needed to help bring relief to hurricane-ravaged Puerto Rico – due to a few sparing complaints from billionaire buddies.
"We're thinking about that," Trump said before finally lifting the act, "but we have a lot of shippers and a lot of people...who work in the shipping industry that don't want the Jones Act lifted."
In other words, the President was almost ready to keep a protectionist regulation at the cost of many lives, because the industry which benefits from it wanted him to.
It would be reaching to say the delayed-Jones Act relief is final proof that Trump is a sadistic monster. In fact, Trump is far from the first power-broker in Washington D.C. to listen to self-serving “advice” from a business giant.
Let’s go back a few years to the uproar over Thomas Edison’s greatest invention. So-called “conservative” Republicans in D.C. helped give America its insane new light bulb regulations which Red America strongly opposed. Democrats were all-in on such regulations at the time, and got their pals at the Washington Post to “fact check” complaints about the widely-protested measures. (The so-called facts from WaPo included mostly opinions from Democrats about room lighting, a kind of logical Mobius-loop similar to the Mueller investigation.) Unsurprisingly, consumers are now forced to buy more expensive bulbs. Whose idea were the regulations? Why, the light-bulb industry’s, of course.
True free-market conservatives understand that just because a big business likes a regulation does not mean that it is beneficial to the public. In fact, it is usually a ploy for corporations and giants to crush their smaller competition. Airlines like United and Delta have supported regulations that help keep their companies dominating the travel industry, despite the despicable treatment of customers and various other big problems. Philip Morris famously helped write its own tobacco regulations.
Now, another new President is willing to play along, mostly due to his pragmatism and the pressure to keep his “ultimate negotiator” mantle. For all of his bombast about tax “cuts,” Trump has also imposed a gigantic new tax on domestic airlines, a move which many insiders feel was made at the request of Boeing.
When Delta airlines bought 125 jets from Canadian aircraft manufacturer Bombardier a few years ago, Boeing cried foul because the Canadians gave Delta a big discount. Boeing has successfully lobbied the new administration to slap a tariff on imported aircraft, punishing Bombardier and supporting the big guys. Little airlines like Spirit and Sun Country tried to talk the Trump team out of it because it is making the aircrafts they use spike in price.
Trump has been pushing for a lower corporate tax rate than Congress will likely sign-on for. However, the White House is pushing to eliminate state and local tax-deductions for wealthy Americans.
Politically speaking, that’s not a clear-cut scenario.
The Republican tax plan, still in the molding stages, does provide relief for low-income families. The plan nearly doubles the standard tax-deduction to $24,000 for married taxpayers and $12,000 for single filers. Lawmakers also hope to lift the income ceiling for the $1,000 child-care credit. The $1,000 credit for each child currently phases out above $75,000 for single parents and $110,000 for couples. That ceiling may rise or fall as the law is debated.
But the top tax rate will also fall, and the 1% will benefit. A family with an annual million-dollar income could profit by at least $24,000 a year.
Democrats and Republicans will continue, as Scott Adams puts it, viewing two movies on one screen when it comes to Trump. Leftists will say that the plan is a naked giveaway to the rich and powerful, with only a crumb thrown to the middle class as a façade behind which the POTUS does his evil bidding. Conservatives, though put off by Trump’s catch-as-catch-can politics and willingness to tack left on financial issues, will largely be happy as long as taxes go down.
Reality, as usual, exists independently of either spin. With an intellectually confused President at the helm, tax reform will look like more of a grab bag than a clear push in the direction of either a more-statist or less-statist society.
Trump is not concerned with philosophy, or even integrity. His tax plan, and his no-bones collaboration with industry giants and lobbyists, are nothing more than a desperate attempt to revitalize the American economy before the 2018 mid-term elections. Whether or not the ploy works, it will help shape our country’s financial and political future for decades to come.