The Trump tax cut has been a failure, both economically and politically. Even the GOP base, and some billionaires, can support higher taxes on the wealthy today so long as the proceeds are used for purposes that don’t offend the sensibilities of reactionaries. And so, if the objective is to reduce inequality and improve the lives of average Americans, the real questions are:
- What taxes should be raised, and how?
- How should the money be spent?
As to #1, the consensus answer clearly isn’t the unconstitutional and impractical wealth tax; there is no need to reinvent the wheel here. The place to start is with the indefensible exemption of capital gains and income above roughly $130,000 from FICA. Next, I would substantially increase the estate tax. Third, I would roll back a large part (probably not all) of the corporate tax cut. Finally, I would increase the highest marginal rates of income tax to somewhere around 50 percent.
How would the money be spent? First, on filling the holes in Social Security and Medicare. Second, on infrastructure improvements. Third, on a larger EITC. Finally, I would increase Obamacare subsidies with anything that remained. Since the reactionary right only hates spending programs which appear, in their eyes, to benefit unjustly privileged, lazy minorities, these ideas should meet with their approval.