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Daily news & progressive opinion—funded by the people, not the corporations—delivered straight to your inbox.
Like the Bush tax cuts before it, the Trump tax cut was a trickle-down failure.
Happy Tax Day. As Supreme Court Justice Oliver Wendell Holmes said, “Taxes are the price we pay for a civilized society.”
But who should pay the most for this civilized society? As Adam Smith, the father of modern economics, instructed in his The Wealth of Nations, a tax system should be based on the principle of equal sacrifice. This means the richer should pay a larger share of their incomes in taxes than the poorer.
But today’s wealthy Americans are paying a much smaller share of their incomes in taxes than most Americans.
Which is why the debate that’s already begun over the 2025 expiration of the Trump tax cuts is so illuminating and important.
Whenever you hear Republicans complain about the federal budget deficit, bear this in mind: The Bush and Trump tax cuts are the major culprits.
The major reason some very wealthy people are backing former President Donald Trump is they want the Trump tax cuts to become permanent and not expire as scheduled in 2025.
As this debate unfolds, you should know four basic facts. The Trump tax cut that went into effect in January 2018 is:
More generally, trickle-down economics—the abiding faith on the political right that tax cuts as well as deregulation are good for an economy—continues to live on, notwithstanding its repeated failures. Ever since former U.S. President Ronald Reagan and former British Prime Minister Margaret Thatcher first tried them, trickle-down policies have exploded budget deficits and widened inequality.
Reagan’s tax cuts and deregulation at the start of the 1980s were not responsible for America’s rapid growth through the late 1980s. His exorbitant spending (mostly on national defense) fueled a temporary boom that ended in a fierce recession.
Yet the U.S. never restored the highest marginal tax rates before Reagan. And deregulation—especially of financial markets—is a continuing harmful legacy.
The result? From 1989 to 2021, typical working families in the United States saw negligible increases in their real (inflation-adjusted) incomes and wealth.
Over the same period, the wealthiest 1% of Americans became $29 trillionricher. The national debt exploded. And Wall Street’s takeover of the economy continued.
Meanwhile, and largely as a result, Americans have become more bitterly divided along the fissures of class and education.
So why is trickle-down economics still with us? What explains the fatal attraction of this repeatedly failed economic theory?
The easiest answer is that it satisfies politically powerful moneyed interests who want to rake in even more. Armies of lobbyists continuously demand tax cuts and “regulatory relief” for their wealthy patrons.
But why has the public been repeatedly willing to go along with trickle-down economics when nothing ever trickles down? What accounts for the collective amnesia?
The answer is that the moneyed interests have also invested a portion of their gains in an intellectual infrastructure of economists and pundits who continue to promote this failed doctrine—along with institutions that house them, such as The Heritage Foundation, Cato Institute, and Club for Growth.
Consider Stephen Moore, the founder and past president of the Club for Growth and a leading economist at The Heritage Foundation, whose columns appear regularly in The Wall Street Journal and who is a frequent guest on Fox News.
Moore helped draft and promote Trump’s trickle-down tax. He is now advising Trump on making that tax cut permanent, if Trump returns to the White House next year.
Moore and others like him are happy to disregard the evidence and history of trickle-down’s abject failures. They simply repeat the same set of promises made decades ago when Reagan and Thatcher set out to convince the public that trickle-down would work splendidly.
The public has so much else on its mind and is so confused by the cacophony that it doesn’t remember—until immediately after the next trickle-down failure.
If Democrats take over both houses of Congress in 2024, and President Joe Biden gets a second term, they must reverse the regressive tilt of the Trump tax law—raising more revenue while advancing the interests of low- and moderate-income families across the country rather than those of the wealthy. To achieve this:
As global heating shrinks the size of the board on which we play the game of life, we’re going to need to return to the basic human experience of relying on the people around us.
I’ve given a lot of talks about climate change over the years—that’s part of what organizers do. And I can predict with great confidence the questions that people will raise their hands to ask. “Isn’t the real problem overpopulation?” (Not really; most population growth is coming in places that use incredibly small amounts of energy.) Or “what about nuclear?” (keep the plants we’ve got open if we safely can; new ones are incredibly slow and expensive to build, though someday a generation of yet newer ones could conceivably change that; in the meantime rely on the nuclear reactor hanging a safe 93 million miles up in the sky).
I can also predict the questions people will ask later, privately, as the crowd drifts out of the auditorium. One—“Is it OK for me to have a kid?”—is almost unbearably painful; no one should have to ask it. The other—“Where should I move?”—is a (little) less traumatizing. And I think it’s on a lot of minds, especially right now, as it becomes clear that many parts of our Earth won’t be habitable going forward. As I tried to explain in a recent book, global heating is systematically shrinking the size of the board on which humans can play the game of life.
On the one hand, the question implies a certain self-centered approach to the climate crisis—how do I avoid this huge communal disaster—as well as a certain quanta of privilege: Most people in this world, especially the ones who really need a new home, lack the resources or the legal ability to pick up and move. Still, we each get one life and we need to live it somewhere.
A recent study found that every time the temperature rises another tenth of a degree Celsius, another 140 million humans find themselves living outside what scientists call the “human climate niche,” the zone with temperatures where our species flourishes.
It’s easier, actually, to figure out where not to live. Phoenix may be the fastest-growing big city in the country, but anyone who moves there after this summer is not paying attention: 31 straight days over 110°F, and emergency rooms filled with people who burned themselves by… falling on the sidewalk. But it’s not just obvious places, like the middle of the desert. Last week, at 4,000 feet in the Andes, the temperature topped 95°F—in winter. (Weather historian Maximiliano Herrera described it as “one of the extreme events the world has ever seen.”) Or take Athens, one of those places we like to call a cradle of Western civilization, but two years ago the city’s “chief heat officer” was already warning it might be becoming uninhabitable; last month, during the longest heatwave in the city’s history, authorities closed the Acropolis to tourists in the afternoons.
Even in places used to dealing with extremes, life is getting harder; India’s monsoon, for instance, is ever more “violent and unpredictable.” In Himachal Pradesh, for instance, “the state has already received 1,200% more than its annual rainfall, according to data from the India Meteorological Department. Landslides and floods have claimed nearly 100 lives.”
I could muster these kinds of statistics for virtually any place you want to name: A recent study found that every time the temperature rises another tenth of a degree Celsius, another 140 million humans find themselves living outside what scientists call the “human climate niche,” the zone with temperatures where our species flourishes.
But as this summer—with the increase in global temperature at least temporarily topping the 1.5°C that the world swore to avoid in Paris—demonstrates, no place is really safe, even within those supposedly habitable zones. I live in Vermont, in the mountains of the American northeast, which has sometimes been seen as a “climate haven” because it’s at a high enough latitude to avoid the worst heatwaves, isolated from a stormy ocean coast, and historically wet. But this summer we’ve had too much water: some of the worst flooding in the country. We’re not that far from the overheated north Atlantic, and so wave after wave of unrelenting rain has descended on the state, drowning, among other things, the main street of our capital city (previously best known for being the only state capital without a McDonald’s). Another round of thunderstorms struck over the weekend; my county got six inches of rain, triggering landslides and closing the roads in and out of town. It turns out that steep mountain slopes and narrow mountain valleys combine with an overheated atmosphere (remember the 21st century’s most important physical fact: Warm air holds more water vapor; July set a new record for U.S. thunderstorms) to produce crazy flooding. I was away during this round of meteorological depravity, and it was hard to be seeing pictures of roads I travel every day wiped out.
There is no safe place.
And yet I remain glad I live where I do, not because it’s protected from climate change, but because it’s at least a little bit more equipped to deal with it. And that, in turn, is because it has high levels of social trust. Only 38% of Americans say they mostly or completely trust their neighbors, but a 2018 Vermont survey found that 78% of residents think that “people in my neighborhood trust each other to be good neighbors”; 69% of Vermonters said that they knew most of their neighbors, compared with 26% of Americans in general. Those levels of social trust help explain, I think, why the state had the lowest level of fatalities from Covid-19, much lower than its neighboring states and much lower than other small rural states with similarly homogeneous populations. Everyone wore masks, everyone got vaccinated. In the same way, when this summer’s floods hit, people came together, reenacting the surge of mutual aid that came after Hurricane Irene similarly drenched the state in 2011.
This is not an argument to move to Vermont. Among other things, the state had the lowest housing vacancy rate in the country before this summer’s flooding wiped out more of the state’s affordable housing stock. And Vermont has its share of problems, some of them rooted in an aging population resistant to progress of any kind—there are times when I think its de facto motto is “Change Anything You Want Once I’m Dead,” which explains among other things the de facto moratorium on building the wind turbines that could help provide us cleaner power.
We’ve come through 75 years where having neighbors was essentially optional: If you had a credit card, you could get everything you needed to survive dropped off at your front door. But the next 75 years aren’t going to be like that.
Instead it is an argument to get to work building that kind of social trust in as many places as possible, because we’re going to need it. We’ve come through 75 years where having neighbors was essentially optional: If you had a credit card, you could get everything you needed to survive dropped off at your front door. But the next 75 years aren’t going to be like that; we’re going to need to return to the basic human experience of relying on the people around you. We’re going to need to rediscover that we’re a social species, which for Americans will be hard—at least since Reagan we’ve been told to think of ourselves first and foremost (it was his pal Margaret Thatcher who insisted “there is no such thing as society, only individual men and women.”) And in the Musk/Trump age we’re constantly instructed to distrust everyone and everything, a corrosion that erodes the social fabric as surely as a rampaging river erodes a highway.
But it’s not impossible to change that. President Joe Biden has been frustratingly dunderheaded about approving new pipelines and oil wells, and hydrocarbon production has been soaring on his watch. He has been much better about trying to restore some sense of national unity—he has been trying to scale down national division by rebuilding left-behind economies, and also by appealing to our better angels. And those angels exist: The most hopeful book for our time remains Rebecca Solnit’s Paradise Built in Hell, which recounts how communities, whenever natural disaster strikes, pull together, just like Vermont this summer. It happens in cities as easily as in rural areas—maybe more easily, since cities are places where the gregarious gather.
An appeal to social trust is not an appeal to some airy idea of universal brotherhood. Vermont Digger, our local news service, had a reporter in a neighboring town yesterday, as it began to dig its way out of the flood. At a washed-out road crossing he encountered a pair of what I think you could only call hippies, trying to join a “Rainbow Family gathering” at a national forest campground nearby.
The two people—who went by the names Scooby Doo and Sparrow—said they had caught the first half of Dead & Company’s final tour before Sparrow’s school bus broke down in Alabama. This week they had traveled from Maine and spent the prior night camping elsewhere.
The duo had heard from two friends on Thursday night who were waiting for them at Texas Falls, estimating that dozens of people were there.
They were looking for dog food for their dog, Bhala, and thought they might have to try Killington or Middlebury.
No offense to Scooby, Sparrow, or certainly Bhala, but I’d rather have as a neighbor the next person the reporter encountered at the washed-out intersection..
Charlie Smith, an excavator, trucked loads of material to the washout in an effort to make the road passable.
“I’m trying to make it so people can get home, get groceries, go back to work,” he said. “It feels good to help people. That’s what we do.”
For Smith, the latest storm began with news that flood water had surrounded some of his equipment. He salvaged the gear Thursday night with minimal damage.
“This morning my dad called me at 5:30 and said ‘let’s get going,’” Smith recalled. He expected to go road by road throughout the day.
Neighborliness accompanied by skill in backhoe operation seems like a good combination for our moment in history. And I was even more reassured to get a mass email from the town clerk of my small burg. It outlined which roads were still closed but also reminded people that the evening’s nature talk was still on at the local school.
Please come join us for an evening of bugs after the sun goes down and stay as long as you’d like! We’ll attract the night-active insects to a white sheet in the woods, and you can learn about some of our local insects from Middlebury College Entomologist Greg Pask. Feel free to bring a flashlight or headlamp, and no bug spray please (we’re trying to attract the bugs!)
So make that neighborliness, backhoes, and a devotion to the world around us, which remains beautiful even this savage summer. We’re in a mess, but together we have some chance of working our way out of it.