Licking their chops at the prospects of greater profits, many among the propertied ruling families back the measure and its proposal to cut the rate from 35 to 20 percent, anticipating it will boost capitalist production at least for now.
This follows months of a small uptick in hiring and manufacturing, coming as profit rates have tended to decline for four decades, resulting in a worldwide slowdown and stagnation of production, trade and, most importantly for working people, in the rates of productive employment.
The editors of the Wall Street Journal applauded the proposals, saying they would allow bosses to be “more competitive.”
The popularity of the bill in the boss class has slowed down some of the political infighting in the Republican Party and gained support for Trump’s presidency. Now called the Tax Cuts and Jobs Act, the bill does not include some traditional Republican shibboleths, like cutting income tax on those in the top income brackets. But as most workers know, tax laws allow the wealthiest to hide income and evade paying anything close to official tax rates.
Acknowledging that tax cuts on profits would lower the federal government’s income, the bill’s promoters say the gap will be closed by revenue from anticipated capitalist expansion and taxing a larger workforce.
The tax proposal comes after the first three consecutive quarters of growth above 3 percent in the gross domestic product in 13 years.
This comes on top of years of capitalist decline and attacks on working people. Millions have been pushed out of work. The labor force participation rate — the percentage of workers who are employed or “actively” looking for work — remains at 62.7 percent, showing that the working class has shrunk during the extended capitalist crisis. The carnage that has been visited on large sections of working people isn’t going away.
Workers continue to face stagnant wages, declining life expectancy, rising homelessness and an opioid epidemic.
Across California there is a spreading outbreak of hepatitis A, an extremely rare disease in the U.S., bred by unsanitary living conditions. A majority of the 19 people killed by the disease in San Diego County since March had been forced to live on the streets.
Backers of the tax cut proposals claim that if they can boost production, they will boost jobs and wages. Former Treasury Secretary Larry Summers, a knee-jerk member of the anti-Trump “resistance,” argues that won’t happen.
In an Oct. 8 article titled “The Trump Administration’s Tax Plan Is an Atrocity,” Summers says the bill “would not substantially increase economic growth, would blow out the budget deficit and would make the United States an even more unequal place.”
The capitalist liberal’s concern is based on fears that the realities of today’s capitalism will inevitably lead to a new downturn and more wars. The government will need cash, he says, for “increased national security spending.”
Whether or not the bosses decide to use the tax cut to expand investment in production and exploit more workers depends on whether they believe they can profit sufficiently from doing so. There is plenty of capital lying around today — but the rulers have either been squirreling it away or using it for nonproductive speculation.
While infighting in the Republican Party has lessened, the crisis in the Democratic Party is growing. The Bernie Sanders “revolution” wing continues to push to take over.
Further rifts emerged when former Democratic National Committee head Donna Brazile recently published her account of Hillary Clinton’s campaign for the party’s presidential nomination. Brazile makes it clear that the leaders of the party connived to bar Sanders from any chance of winning. She now complains that the Clinton campaign “compromised the party’s integrity.”
In the 2016 election, the party establishment decided to turn its back on the working class. “For every blue-collar Democrat we lose in western Pennsylvania, we will pick up two moderate Republicans in the suburbs of Philadelphia,” New York Sen. Chuck Schumer told party members last year. “And you can repeat that in Ohio and Illinois and Wisconsin.” How’d that work out for the Democrats?
Sanders supporters are already jumping into House primary races in unprecedented numbers.
How can workers make gains?Regardless of their position on the tax bill the rulers try to hide how workers can win wage raises. They don’t come from the rulers’ tax policies.
What workers earn depends on our capacity to organize together to fight what the bosses do to us, to use union power and advance independent working-class political action. Union leaders have pressed in the opposite direction for decades, saying that workers’ livelihoods depend on collaborating with the bosses and the Democratic Party. This has made our unions shrink.
For workers, any expansion in hiring would be welcome, after years of declining living standards and a broadening social crisis. It would improve workers’ confidence, creating better conditions to defend our interests in struggle against the bosses.
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