Inequality created Republican tax bill

Most Americans know that the Republican tax bill will widen economic inequality by lavishing breaks on corporations and the wealthy while taking benefits away from the poor and the middle class. What many may not realise is that growing inequality helped create the bill in the first place.

As a smaller and smaller group of people cornered an ever-larger share of the nation’s wealth, so too did they gain an ever-larger share of political power. They became, in effect, kingmakers; the tax bill is a natural consequence of their long effort to bend American politics to serve their interests. The top 1% of the population by wealth — the group that would primarily benefit from the tax bill — controls nearly 40% of the country’s wealth. The bottom 90% has just 27%, according to the economists Thomas Piketty, Emmanuel Saez and Gabriel Zucman. Just three decades ago these numbers were almost exactly the reverse: the bottom 90% owned nearly 40% of all wealth.

As kingmakers, rich families have supported candidates who share their hostility to progressive taxation, welfare programmes and government regulation of any kind. These big-money donors have pushed the Republican Party in particular further to the right by threatening well-funded primary challenges against anybody who doesn’t toe the line on tax cuts for the rich.

The power of the one-percenters may help explain why President Donald Trump, who ran as a populist, has not only abandoned any pretence of fighting for the working class but also joined Republicans in Congress in ripping up regulations that protect families and the environment — to help business tycoons.

But inequality does not have to be self-perpetuating. When people turn up at the polls, as they did in Alabama, they can produce unexpected results. That’s why Republican law makers might want to think again about whether they want to be the means through which their wealthy donors pull off this heist. /New York, December 16