Opinion: Of the elite, by the elite, for the elite

The “major tax reform proposal” trotted out by the Trump administration Wednesday — supposedly the product of weeks of grueling work by his top economic experts — consisted of a one-page set of “principles” that could have been cribbed off a Heritage Foundation website in two minutes.

Most of the provisions on the wish list — a slashing of the corporate tax rate, the elimination of the alternative minimum tax and the estate tax — would benefit those already wealthy; for example, its passage into law would almost certainly produce a multi-billion-dollar bonanza for President Trump and his family.

Conversely, the cost to the federal treasury would be enormous. An early estimate by the Committee for a Responsible Federal Budget puts the lost-revenue figure at $5.5 trillion over the next decade, adding significantly to the national debt.

Nonetheless, Treasury Secretary Steve Mnuchin and others argued Wednesday that such changes are necessary to spur economic growth, suggesting that after-tax corporate profits are currently too low to encourage the necessary investment that leads to job growth.

Is that premise true? Have corporate after-tax profits fallen to such a degree that investors are no longer willing to risk their capital in return for the meager profits they would reap? A glance at the stock market would suggest not.

So does this:

 

The chart above from the Federal Reserve Bank in St. Louis shows us that in the past 15 years, corporate AFTER-TAX profits have almost quadrupled. Over the last 25 years, they have almost septupled. So if Mnuchin is correct, if higher after-tax corporate profits produce rampant growth, why aren’t we already experiencing that economic utopia?

The answer is that some people already are.

Last year, the Congressional Budget Office released an analysis that it titled “Trends in Family Wealth, 1989 to 2013,” and the data it contained were quite illuminating:

As the CBO put its findings:

“Between 1989 and 2013, wealth held by families in the top 10 percent of the distribution increased by 153 percent, whereas wealth held by families in the bottom half of the distribution declined by 19 percent.”

And that’s just the beginning. According to the CBO, the bottom 50 percent of American families shared just 3 percent of the nation’s wealth in 1989, and those were the good ol’ days. By 2013, the bottom 50 percent of Americans possessed just 1 percent of the nation’s wealth, or basically the crumbs that had fallen from the table. If you do the math, that’s an effective wealth redistribution from poorer Americans to the more wealthy of more than $2 trillion, and that did not occur because poorer Americans got lazy or spoiled. It happened because of systemic changes — macro-economic and technological changes — that are beyond the power of most individuals to buck.

Meanwhile, the share of national wealth held by the richest 10 percent rose from 67 percent to 76 percent, and the concentration was even greater among the wealthiest 1 percent. The CBO cites two different assessment methods: Under one approach, the share held by the wealthiest 1 percent rose from 31 to 37 percent. Under another, it rose from 28 percent in 1989 to 42 percent in 2012.

Think about that: If I told you that the richest 1 percent controls as much wealth as the bottom 50 percent of Americans combined, that might seem like a lot. The reality is much more harsh: The richest 1 percent controls 40 times as much wealth as the bottom 50 percent.

In some minds, we’re not supposed to notice such things. To even point out the massive shift in wealth and income away from the poorest 50 percent of Americans toward those with already significant resources is to indulge in the politics of envy. But it’s not envy to wonder how on earth you’re going to pay to get your kid through college, or how you can afford to get the alternator fixed on your 2001 Accord so you can continue to get to your $35,000-a-year job.

Nor is it envy to marvel at a political culture that proposes massive cuts in services and support for those Americans struggling economically so that those already reaping immense benefits from the system can become even wealthier. That’s not theoretical; it’s playing out right in front of our eyes.

 

Reader Comments 0

1406 comments
Nick_Danger
Nick_Danger

Is "Republican deficit hawk" still a thing?

rimsky
rimsky

Heard this interview on NPR of two Republicans.  One supported Trump and the other did not.

When asked the Trump support said about Trump's accomplished was high energy in the first 100 days and Gorsuch.

WTF am I supposed to do with his high energy.  It doesn't by me cup of coffee at McDs?  

Are the idiot Trumpettes good with that BS?

FIGMO2
FIGMO2

Exclusive: Trump says he thought being president would be easier than his old life

http://www.reuters.com/article/us-usa-trump-100days-idUSKBN17U0CA

"I loved my previous life. I had so many things going," Trump told Reuters in an interview. "This is more work than in my previous life. I thought it would be easier."

"You're really into your own little cocoon, because you have such massive protection that you really can't go anywhere," he said.

He frequently turns to outside friends and former business colleagues for advice and positive reinforcement. Senior aides say they are resigned to it.

Commonalities between Trump and Obama. 

Citizen-of-the-World
Citizen-of-the-World

@FIGMO2 Now, see, if candidate Trump had said he was running for president because he thought it would be easier, I would have voted for him. Why did he keep that from us, when it would have guaranteed him the landslide victory he claims to have won anyway?

Peachs
Peachs

I hear a congressmen all the time wondering how you can run an efficient operation from the White House with a short attention span.

KUTGF
KUTGF

@Nick_Danger @FIGMO2 That was a leap after hitting the warp drive.  "Captn, the dilithium crystals.  I don't think they can take it any more."

And now to dance with the Obama said it was hard, Trump said it was hard but Trump thought it was going to be easier is just a mishmash of absolute foolishness.  I think we have a warp core breach!

Peachs
Peachs

A man walks off the street never played in this game and expects it to be easy. This is the lack of, the modern press. It creates an illusion of government.

FIGMO2
FIGMO2

@Nick_Danger @FIGMO2

As I recall, he said it on David Letterman, when asked about being president...he said "THIS IS hard work!"

It got a laugh. I brought it here, and responded with..."Welcome to reality, Mr. President!"

Nick_Danger
Nick_Danger

@FIGMO2 @Nick_Danger 

Doesn't sound like Obama was surprised that it was hard, as opposed to Trump.  I suspect Obama had a clue what he was getting into.

Denise285
Denise285

I bet he never thought that he would have a big mess to clean up, which was a job well done!

FIGMO2
FIGMO2

@Nick_Danger @FIGMO2

No doubt Obama was more familiar with legislating since he was a senator before he was president.

Intonation reveals alot.

"THIS IS hard work" indicates surprise to me.

Could be THAT'S just me, Nick.

No ulterior motive, just an observation.

Denise285
Denise285

Trump did not realize that the government provides "services", whereas he has lived a life of being served.

JeffreyEav
JeffreyEav

They have a shot and they drive Kemp crazy. All good.

Peachs
Peachs

Hold down voter registration, but gerrymandering a con game, no problem. And you wonder why this country is divided..

JeffreyEav
JeffreyEav

If Trump had really accomplished something in his first 100 days do you think he'd be going to see his base today at the NRA convention? I don't.

JeffreyEav
JeffreyEav

I am entertaining the weirdest couple this evening. Republican scientists.

PaulinNH
PaulinNH

@JeffreyEav  Ask them if they went to the march last week.  There were a few R's at the Boston one.

JeffreyEav
JeffreyEav

They're from California too. It's gonna be funny.

Nick_Danger
Nick_Danger

@JeffreyEav 

Republican scientists from California! 

I'll bet they're quite used to (and comfortable with) explaining the apparent dichotomy.  Should be an interesting evening!

TBS
TBS

Not sure if he is a scientist or engineer but there used to be a conservative blogger here at Bookman's that I think is one or the other. Wouldn't call him Ted Cruz conservative but solidly on the right.

Had some disagreements with him but overall seemed like a cool dude and intelligent for sure.

JeffreyEav
JeffreyEav

These guys couldn't fix healthcare if Mexico paid for it.

JeffreyEav
JeffreyEav

I think we need a new saying. Once you go Obamacare you never go back.

TBS
TBS

President Trump backed off on scrapping the North American Free Trade Agreement (NAFTA) after seeing a map showing that states that voted for him would be hurt by the move, the Wall Street Journal reported Friday.

Agriculture Secretary Sonny Perdue and Commerce Secretary Wilbur Ross gave Trump a map noting that farm and border states that heavily backed Trump in last year's election would lose jobs if the U.S. left the trade deal, the report said.

http://thehill.com/policy/finance/trade/331036-us-map-helped-sway-trump-on-nafta-report

MAGA'n away

TBS
TBS

I think so

PaulinNH
PaulinNH

@TBS  "Agricultural Secretary Sonny Perdue" - did "The Most Incompetent Administration Evah"(TM) manage to get Sonny confimed yet?

Nick_Danger
Nick_Danger

At this point, it appears the Republican health-care plan is going to die on the floor of the House. Coincidentally, dying on the floor of the house happens to be the Republican health-care plan.”

 - Conan

Nick_Danger
Nick_Danger

So, is repeal-and-replace well and truly dead (at least for the foreseeable future)?

TBS
TBS

For this week it is but not sure if they are going to keep pushing this current version (act #3) or move on to act #4

Visual_Cortex
Visual_Cortex

@Nick_Danger

Jay's covered this in so many (more) words, but the GOP is finding out that you can't pack a House with far-right types whose vision of America is THAT out of line with the majority of actual Americans, and pass legislation that both find acceptable.

Most Americans will not tolerate a bill that lets insurance companies do what they used to do pre-PPACA.

And hard as it is to swallow, most Americans flat-out do approve of the PPACA*. That's why I find it astonishing to see anti-Ossoff ads that still try to use "evil Obamacare" as a selling point. How stupid do they think Sixth Districters are?


--

* The Joni Mitchell rule--"you don't know what you've got 'til it's gone"--seems to apply here. We didn't know what we had until it nearly got yanked from us.


skydog12
skydog12

@Nick_Danger

No, since there is a weekly reminder on our pay checks.

Health care has been increasing drastically since the 70`s and will continue to rise. The party in power owns it and it takes them down.


There ain`t but One Way Out, but lets keep doing this clod hop while the rich get richer.

TBS
TBS

I think those ads are based on overall income demographics.

I doubt you would see as many of those ads in areas where there is a significant amount of Rs / cons who utilize ACA policies.

Of course I could be wrong but that's my guess as to why they think it will play well in the 6th district

skydog12
skydog12

@King_of_Kolob @Nick_Danger

No, since there is a weekly reminder on our pay checks.

Health care has been increasing drastically since the 70`s and will continue to rise. The party in power owns it and it takes them down.


There ain`t but One Way Out, but lets keep doing this clod hop while the rich get richer.

skydog12
skydog12

The Trump is coming to ATL today. 

I hope his team knows the best way to the venue is up I-85. 


You are the man Donald, drive fast. You will see some orange cones, but ignore them, they are for you. It`s all about you D!

Denise285
Denise285

The NRA will probably have a nice shiny rifle that Trump can take a picture with.

TBS
TBS

I don't live far but will stay on the other side of the interstate. I don't care that the NRA is in town ( in Lewis's awful district) and Trump is speaking but like any other large convention it's problematic getting around in certain areas.

Plus I don't really go over that way much any how.

TBS
TBS

Traffic always bad when POTUS comes to town. With the bridge out and it being Friday stay the hell out of downtown and midtown if possible

Paul42
Paul42

@Denise285 

What I've been wondering is, given gun sales have plunged because there's no longer the manufactured fear of "Obama's gonna get yer guns" what's the NRA going to come up with now?

"The North Koreans are coming!!!"?

skydog12
skydog12

@TBS


I may come down and just stand my ground, but that would be like shooting a baited field.