America’s Broken System
The tax-reform bill that US Republicans are attempting to implement is economically indefensible and blatantly unfair. But the US has a much deeper problem: the Anglo-Saxon model of representative government is in serious trouble, and nobody seems to know how to fix it.
BERKELEY – The tax bill that US Republicans have doggedly pushed through Congress is not as big a deal as many are portraying it to be. It is medium-size news. The big news – the much more weighty and ominous news – lies elsewhere.
Of course, medium-size is not nothing. If the tax bill does clear its final hurdle – a conference committee must reconcile the Senate-approved bill with that of the House of Representatives – and become law, it will complicate the tax system considerably, as it opens many loopholes. It won’t have any impact on economic growth – positive or negative – but it would have an impact on the government’s finances, causing revenues to decline by the equivalent of about 1% of national income.
The missing resources would most likely be transferred to the top 1% of earners, raising their share of total income from 22% to 23%. The top 0.01% would probably gain the most, with their share of income rising from 5.1% to 5.5%. In this sense, the tax plan would be another brick – not a huge brick, but a medium-size brick – in the increasingly impregnable fortress of American plutocracy.