By Raymond Lotta
Originally published at revcom.us
The new tax law is NOT principally a handout, motivated by corporate greed--although greedy hands are seeking to maximize and game its benefits, which are utterly skewed to the wealthy. This tax bill is a conscious and strategic move to deal with economic contradictions and imperialist great-power needs.
Yes, the tax bill will accelerate the upward redistribution and concentration of income and wealth. The Tax Policy Center has calculated that by 2025, the top one percent of households would receive nearly 85 percent of the total tax reduction.
This upward redistribution and concentration of wealth is a phenomenon, a pattern, of the last few decades. Countless studies on inequality (most famously Thomas Piketty's work) have demonstrated this trend in the imperialist countries, with the U.S. the leader in inequality.
But the tax bill is not in essence a con game to rob the poor and large sections of the middle class, although people will suffer greatly. There are larger economic pressures and compulsions at work. And there are imperialist great-power needs, specifically the Trump/Pence regime's global agenda.
The article "The New Tax Law: Cementing Policies and Politics of Cruelty" addresses some of the fascist political and ideological implications of the Trump-Pence tax law, and the truly vicious economic attacks on the masses. These are indeed critical. But there is a deeper logic setting the context for all that.
1. There is a "logic," a capitalist-imperialist geostrategic logic, to the Trump agenda.
The Trump economic strategy has four main elements: a) rewriting regulations and the tax code; b) further slashing social spending; c) expanding energy (fossil fuel) production, both to spur profits and to enhance U.S. global economic strength, competitiveness, and leverage (over world oil prices and over oil-producing regimes the U.S. deems as enemies, like Iran); and d) remaking global trade rules and agreements to give greater immediate advantage to certain sections of U.S. capital, to further subordinate "partners" like Mexico.
The world capitalist economy has been undergoing major changes in the balance of strength of rival imperialists. In particular, capitalist China has emerged as a global rival to U.S. imperialism, and China has over the last 20 years been growing rapidly and extending its global reach and influence.
There is a view on the part of advisers in the Trump regime that the U.S. has more economic leverage... to leverage. As they seem to see it, other countries are more dependent on the U.S. for export markets (to sell their goods) than the U.S. is on their markets. And so, in this view, the U.S. can create obstacles to these countries' ability to sell their goods in the U.S. (like imposing tariffs, a kind of tax, on products coming into the U.S.) and the U.S. can absorb retaliatory economic measures that these countries might take against the U.S.--and can also bully other countries into submitting to U.S. economic dictate.
This is a dangerous game to play, especially with China, where U.S. capital has huge investments. And China is actually financing much of the U.S. government deficit through its purchase of debt (bonds) issued by the U.S. Treasury.
But more than economics is involved. China in particular is expanding its military capabilities and Trump is pushing for a massive military buildup and military modernization, including and especially nuclear weapons.
The new U.S. national security document issued by the Trump/Pence regime on December 18 should be taken very seriously. It was apparently drawn up by the so-called "adults in the room," notably National Security Advisor Gen. H.R. McMaster (at least in reports circulating).
The document is highly militaristic and full of threatening rhetoric--describing China and Russia as "revisionist powers" and "hostile competitors" seeking to "shape a world antithetical to U.S. values and interests." It calls for the U.S. to prepare to militarily "overmatch" its rivals. The U.S. already has enormous military advantage, but this document is arguing for even greater advantage, buildup, and readiness. The Trump regime has been calling for the U.S. to be oriented to wage far larger wars than those of the last few decades.
The Trump economic program is aimed at shoring up and bolstering the domestic economic base of the U.S. empire--energy, sectors of manufacturing, the industrial base for the military. This economic program is in the service of an aggressive, hyper-nationalist economic and strategic agenda that is "chauvinist globalist" (America First).
2. A structural problem of the U.S. economy has been low rates of capital investment. The new tax law aims in part to deal with that--but whether it can is far from certain.