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Piketty writes: "Is Trump a UFO in American history or can he be seen as the continuation of long-term trends? While we have no desire to deny 'Donald's' obvious specificities, including his inimitable art of the tweet, we do have to admit that elements of continuity prevail."

Donald Trump and President Ronald Reagan. (photo: AP)
Donald Trump and President Ronald Reagan. (photo: AP)


Reagan to the Power of Ten

By Thomas Piketty, Le Monde

16 June 17

 

s Trump a UFO in American history or can he be seen as the continuation of long-term trends? While we have no desire to deny “Donald’s” obvious specificities, including his inimitable art of the tweet, we do have to admit that elements of continuity prevail.

The tax agenda which he has just tabled in Congress is eloquent. It can be summed up in two central measures: reduction of federal income tax on corporate profits from 35% to 15% (a rate which Trump would also like to see applied to individual entrepreneurs like himself); a total end to inheritance tax. This is clearly a direct prolongation of the programme for ‘scrapping’ the progressive tax launched by Reagan in the 1980s.

Let’s go back a bit. In order to counter the rise in inequality and the excessive concentration of wealth (at the time, considered as contrary to the democratic spirit in America) and also to avoid any resemblance with Old Europe one day (considered across the Atlantic in the 19th century and at the Belle Epoque as aristocratic and oligarchic, and rightly so), between 1910 and 1920, the United States set up a level of progressive taxation, hitherto unknown in history. This major movement of compression of inequalities implied both taxing income (the rate applied to the highest incomes was on average 82% between 1930 and 1980) and estates, (with rates rising to 70% on the transmission of the largest estates).

All this changed with the election of Reagan in 1980: in 1986, the reform reduced the top rate of income tax and ignored the Social Policies set up by the New Deal under Roosevelt. These were accused of having ‘softened’ America and to having helped those who lost out during the war to ‘catch up’. But Reagan left a high corporate tax in place and high progressive rates of taxation on estates. Thirty years after Reagan and ten years after the first attempt by Bush junior to abolish so-called « death duties », in 2017 Trump has launched a new wave of presents to the biggest and wealthiest fortunes, and all this after abolishing Obamacare.

There is a fair chance that he will be followed by Congress. The Republicans will, of course, attempt to add a “border adjustment mechanism” consisting in authorizing the deduction from exports of the taxable profit and, conversely, in forbidding the deduction from imports (the well-known Ryan plan). This unprecedented blend of corporate tax and of European style V.A.T. has already aroused the anger of the WTO (something which pleases Trump) but also of importers (for example the Walmart supermarkets) which is more problematic. Theoretically the measure could be neutralised by a rise in the dollar, but in practice the exchange rates are determined by many other factors and nobody wants to take the risk.

It is likely that those concerned will settle for targeting specific imports and exports (with the intention of getting the message out that the Republicans defend American industry better than the Democrats, who are described as covert free traders and always ready to give everything to the Mexicans and all those other jealous people who surround America) and that a compromise will be found both for estate duties and for a massive reduction in the rate of corporate company profits, doubtless in the range of 15% to 20%, which may relaunch fiscal dumping in Europe and in the world.

The main question remains: how does a programme which is so clearly pro-rich and anti-social succeed in appealing to a majority of Americans as it did in 1980 and again in 2016? The classical answer is that globalisation and cut-throat competition between countries leads to the reign of each man for himself. But that is not sufficient: we have to add the skill of the Republicans in using nationalist rhetoric, in cultivating a degree of anti-intellectualism and, above all, in dividing the working classes by exacerbating ethnic, cultural and religious divisions.

As early as the 1960s, the Republicans began to benefit from the gradual transfer of part of the vote of the white and southern working classes, unhappy with the civil rights movement and the social policies, accused of benefitting primarily the Black population. This long and in-depth movement continued with the crucial victory of Nixon in 1972 (faced with the Democrat, McGovern, who suggested implementing a universal basic income at federal level, financed by a new increase in estate duties: this was the summit of the Roosevelt Programme), Reagan in 1980, and finally Trump in 2016 (who had no hesitation in racially stigmatising Obamacare, as Nixon and Reagan had done previously).

In the meantime, the Democrat electorate focussed increasingly on the most highly educated and the minorities, and in the end, in some ways resembled the Republican electorate at the end of the 19th century (upscale Whites and Blacks emancipated), as if the wheel had turned full circle and the Roosevelt coalition uniting the working classes over and above racial differences had ultimately only been a parenthesis.

Let’s hope that Europe, which in some ways is threatened by a similar development with the working classes having greater faith for their defence in the anti-immigrant forces, than in those who describe themselves as progressive – will be capable of learning the lessons of history. And that the inevitable social failure of Trumpism will not lead our “Donald” into a headlong nationalist and military rush, as it has done others before him.

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+59 # GeorgePenman 2017-06-16 10:10
Republicans voted to make America great again, but they were conned. They got plutocracy, corporatism, racism, theocracy, misogyny, homophobia, xenophobia, militarism, isolationism, nativism, authoritarianis m, and a conflicted, unprepared, strong-man head of state.

GOP billionaires despise democracy. They attack media, undermine elections, pack the Courts, empower corporations, expand the military, build more nuclear weapons, expand surveillance, privatize schools, public lands, and infrastructure.

To pay for big tax cuts for the .01%t and eliminate the inheritance tax , they cut social supports. meals on wheels. When Republicans are in office deficits don’t matter.

To extract even more money from people, Republicans block consumer protections, oppose the CFPB, scrap the fiduciary rule, ignore anti-trust, make student loans more expensive, undermine weak privacy, cancel net neutrality, Government looks like a get rich quick scheme.

While Comey was testifying, the House was rolling back Dodd-Frank which will destabilize the economy, and the Senate was secretly drafting a health care bill that will remove millions from health insurance.

Fossil fuel polluters pay to deny evidence and cast doubt on the coming climate disaster. This will be the end of US world leadership and possibly the habitability of the planet.
The religious right approves. It looks a lot like Fascism.

http://www.gopiswrong.com/
 
 
+25 # REDPILLED 2017-06-16 11:34
The U.S. oligarchy is bi-partisan. Obama got more campaign contributions from Wall St. than did McCain in 2008; promised to be the one between the Banksters and the pitchforks as he continued the Bush bail out of Wall St. banks while inadequately helping Main St.; then expanded the war budget and drone assassination program and started the current 30-year, one TRILLION dollar nuclear weapons "modernization" program.

BOTH major parties are Corporate Parties which do not give a damn about the 90% of us.
 
 
+10 # Jaax88 2017-06-16 11:28
Could not agree more. It appears something evil is moving through the wealthy class to impose more and more top down control over the people and undermined our democracy.
 
 
+24 # angelfish 2017-06-16 12:23
This Coup began with the Reagan Administration. When the Me-FIRST-ers realized they could get affable Fools elected to the Presidency, it became their Life's work. Slyly overtaking State Houses re: Governor-ships and sowing seeds of Race-Baiting, Class Warfare and Misogyny, they have, ALMOST fulfilled their Mission which is, via Trump, to make this country their Cash Cow with the poor working stiffs laboring in the Fields while they clip coupons! Reagan began it by de-regulatiing everything he was TOLD to, while selling Arms to Contras and doing other nefarious acts of Treason. As a card carrying Member of the RePublican Party I watched it in horror and BAILED as soon as I realized what they were doing! Now, with "Numb-Nutz" in the White House, they continue to rape any and ALL helping Agencies, leaving Key positions UN-filled or having them headed by Morons who couldn't find their Butts with BOTH hands and a Road Map! Americans deserve Better! The Greedsters, Simpletons that they ARE, never realized that, when everyone does Better, EVERYONE does BETTER! Like spoiled children they refuse to share or PAY their Fair Share of the Tax Burden that is necessary to keep the Greatest country in the World UP and RUNNING, so, they take their ball and go home! WHY won't they practice the Christianity they preach and HELP an American rather than lining their OWN pockets? It will be interesting to watch all those Camels go thru the eyes of needles while the Rich go down below, won't it?
 
 
+8 # mashiguo 2017-06-16 13:10
This article is too intelligent for it's topic.
The simple fact is that Trump Я US.
 
 
+2 # Rodion Raskolnikov 2017-06-16 13:51
Presidents come and go but the plutocratic and imperial policies of the US government remain the same. The American empire progresses on the same course whether it is Trump, Obama, or Reagan in the white house. Presidents don't make major national decisions; they are only tasked with explaining these decisions to the masses.

In another article now on RSN Naomi Klein is writing about Brand Trump. She's one of the best commenters on branding. Reagan pushed presidential branding to its current level of total fakeness and hyperbole. I see all of the continuity that Piketty talks about above. But the odd thing is that had Hillary been elected, she would have been just the same.
 
 
-3 # kyzipster 2017-06-17 08:43
"But the odd thing is that had Hillary been elected, she would have been just the same."

Too much of the same and it's sickening but I fail to see how keeping what's left of progressive taxation intact with the threat of a veto pen is exactly the same as having a goal of lowering the corporate tax from 35% to 15%, while your so called 'working class' voter base applauds your every Tweet.
 
 
+2 # kyzipster 2017-06-20 10:29
Interesting, thumbs down but no challenge to my statement.

I only care about reality over blind ideology. This administration and Congress are extreme, we may never be able to undo the damage in our lifetimes. As always, we'll see huge tax cuts for the billionaire class, more incomprehensibl e debt, more money printed, more inflation for the worker bees to deal with along with cuts to services and benefits. Any effort to raise in the future by 1 or 2% takes close to a miracle. It's not like this wasn't a Trump campaign promise.
 
 
+7 # ericlipps 2017-06-16 17:55
Quote:
The main question remains: how does a programme which is so clearly pro-rich and anti-social succeed in appealing to a majority of Americans as it did in 1980 and again in 2016?
It didn't, at least in 2016. Trump lost the popular vote by just under 3 million.
 
 
-5 # Time Traveller 2017-06-18 13:55
If you are so concerned about We the People, Slipperi C / Slick Wille, why did you initiate the globalist World Trade Organization and cause America to become a Third World Nation?
 
 
+5 # DongiC 2017-06-17 17:58
Increase tax rates for the rich. Return them to the levels of 1936 - 1940. Slap on a higher inheiritance and make the wealthy pay their fair share of the tax burden. Be prepared to fight for these goals which we mush attain, lesst our republic go smash/
 
 
+1 # elizabethblock 2017-06-18 14:16
John Kenneth Galbraith wrote somewhere that in the long run, people don't vote against their economic interests. What does that say about Trump?
It says that people figured he'd be no worse than Clinton, who is a neoliberal, and just as much in thrall to the rich as Republicans are. Maybe it's a problem with no solution. It takes money, lots of it, to run for president (or any other office, for that matter). Where do you get money from? Rich people. Then you are their creature, whatever you were before.
 

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