Daily
Date
Share
Title

The US Tax Reform or legalised corruption?

Author
Location
Image
Image by Helena Ravenne
Words

The recent Tax Reform, which was proposed by Republicans and signed into law by President Trump in December 2017, has been the source of major controversy and outrage. One of the main concerns surrounding the reform is the increased financial burden it would inflict on the low and middle classes, while benefiting corporations and the wealthy. While such allegations are certainly true, it seems that public discourse revolves mainly around the political aspects of the issue, thus portraying it as yet another bipartisan struggle and failing to recognise that the recent reform strikes a much deeper chord; one that crosses party lines. It seems, that what the tax law reflects more than anything is an intensifying class struggle in the US, and the unprecedented concentration of power in the hands of the donor class. The December 2017 ‘tax gift’ to corporations is, arguably, a step towards turning the US into a better fed version of Putin’s Russia.

Let us talk specifics for a second, and dispel some of the confusion surrounding the law itself. As the reform went into effect, Trump and his gang promised to pad the wallets of all Americans by cutting taxes and expanding deductions regardless of socioeconomic status. However, a quick glance at the law’s stipulations reveals that it is designed to benefit solely the one percent. For instance, while the reform grants middle income Americans a series of tax cuts, those are due to expire in 2027; this does not apply to corporations, whose deductions are permanent. Members of the low income class are expected to suffer even more from the reform, as the $1 trillion increase in Treasury deficit created by the law’s deductions is to be compensated for with resources previously allocated for social security and affordable health care entitlements. Already, on February 12, 2018, The New York Times reported that Trump's proposed budget includes an estimated $1.8 trillion cut to programmes such as Medicare, Medicaid, and food stamps. Finally, Republicans’ claims that revenue garnered by corporations due to the tax reform will eventually benefit the working class through job creation and salary increases is also predicted to be false, since, as has always been the case, dividends are expected to be distributed among shareholders.

The downsides of the tax reform and its blunt assault on America’s middle and lower income classes is public knowledge at this point; it comes as no surprise that only 27% of Republican constituents were reported to be in support of the bill. However, Americans appear to direct the majority of their frustration towards politicians, and get caught up in a media fueled rivalry between Republicans and Democrats. There is no doubt that politicians (Republicans, really) are to be partially blamed for this legislative calamity, but let us not forget that it is the donors who are the puppet masters in this scenario, and that they constitute the true force behind the reform; by applying relentless pressure on politicians, donors have managed to tip the scales in their favour, in total disregard of the voters’ will and interest.

Would it be preposterous, then, to claim that the recent tax development in the US brings it closer to the political model of countries such as Russia? Or, dare one say—third world governments? The only visible difference is that here the political privileges of the wealthy are being enshrined into laws; this, one could say, is the very legalisation of corruption.