Populist President Delivers More Blows to the Neoliberal Order
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Finally, a president willing to address the economic anxiety of the white working class:
On Friday, President Donald Trump used his favorite public platform to hint at a policy change that his administration has been weighing for at least a year: using presidential power to unilaterally lower taxes for investors.
On Twitter, Trump linked to an op-ed by Sen. Ted Cruz and veteran anti-tax crusader Grover Norquist calling on the administration to index capital gains to inflation. Currently, they explain, if you bought a share of stock in 1998 for $30 and sold it this year for $40, that would count as $10 in long-term capital gains for federal tax purposes. But adjusted for inflation, $30 in 1998 is about $46.79 now, so you’d be paying taxes on an investment that, adjusted for inflation, lost money.
That’s the basics of the case in favor of the change: taxing inflation is, proponents of the shift argue, unfair, and hurts the economy by discouraging investment. The case against indexing to inflation is much simpler: This is a change that would overwhelmingly benefit the richest Americans, who own an overwhelming share of the stocks, real estate, and other capital whose sales would be affected. One estimate finds that 86.1 percent of the benefit would go to the richest 1 percent.
More concerning still, some legal scholars believe that executing this change through the executive branch is illegal, and that congressional action would be necessary to do this — action that, with Democrats in control of the House, will probably never come.
But the Trump administration’s signature plan to lift them — a multibillion-dollar tax break that is supposed to help low-income areas — has fueled a wave of developments financed by and built for the wealthiest Americans.Among the early beneficiaries of the tax incentive are billionaire financiers like Leon Cooperman and business magnates like Sidney Kohl — and Mr. Trump’s family members and advisers.
Former Gov. Chris Christie of New Jersey; Richard LeFrak, a New York real estate titan who is close to the president; Anthony Scaramucci, a former White House aide who recently had a falling out with Mr. Trump; and the family of Jared Kushner, Mr. Trump’s son-in-law and senior adviser, all are looking to profit from what is shaping up to be a once-in-a-generation bonanza for elite investors.
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Many of the projects that will enjoy special tax status were underway long before the opportunity-zone provision was enacted. Financial institutions are boasting about the tax savings that await those who invest in real estate in affluent neighborhoods.
I’m not sure how many more of these blows the neoliberal Establishment can take, frankly.