Anne Alstott –
If the details of the House and Senate tax bills under consideration in Washington make your eyes glaze over, it’s because they’re supposed to. The tax-writers, as they often do, are using the technicalities of the tax law to mask major changes in national economic policy. It’s fairly well-known that both bills are stacked in favor of the wealthy. But the details of the tax bills (please don’t call them “tax reform”) contain a neoliberal agenda that, if enacted, will punish good governance, reward capital over labor, and favor the old over the young.
The United States, perhaps more than any other developed country, shapes its economy via the tax law. Neoliberals often say that the United States – unlike socialist Europe – has no government-sponsored industrial policy. And it is true that (for the most part) we don’t have big spending programs that subsidize business or have big bureaucracies that manage the economy. Instead, our politicians hide economic and social policy in the tax code and leave administration to the IRS. In 2015, for instance, the United States devoted $1.2 trillion to tax-based subsidies – an amount that exceeded federal discretionary spending in that year.
So, even as politicians rail publicly against tax loopholes, both parties use the tax code to reward favored industries and citizens. The current tax code, for instance, favors owners of capital, wealthy dynasties, highly-paid workers, and industries including tech and pharmaceuticals as well as finance, insurance, and real estate.