The world’s eight richest individuals possess the same amount of money as the world’s poorest 3.6 billion.
According to Oxfam’s annual assessment of wealth distribution, “collectively the poorest 50 percent of people have less than a quarter of 1 percent of global net wealth,” based on data from Credit Suisse. Much of the vast wealth horded by the richest individuals and corporations is shielded from domestic taxes through offshore financial havens and other corporate loopholes.
"Trump’s attempt to manage the budget like one of his businesses seems headed toward another one of his spectacular bankruptcies, and pushing a comprehensive alternative economic model might be the only counterweight to a deeply regressive budget."
But inequality takes different shapes in rich and poor nations. In the Global South, wealth maldistribution often takes the form of exploitation of local resources and deep social deprivation. But in the US, structural poverty is multifaceted and often oversimplified as a matter of personal success or failure. The US, despite having the world’s most powerful economy, leads the “developed” world in the share of the workforce working low-wage jobs; nearly one third of workers earn less than $12 an hour, and are burdened by erratic schedules and poor working conditions. Moreover, these domestic trends disproportionately harm black, Latino and women workers.
Under Trump’s “simplified” tax plan, millionaires would see taxes reduced by ten percent.
Now Trump, the great disruptor, threatens to further destabilize the most vulnerable workers, with a budget centered around tax cuts for the wealthiest. Though he has talked a big game about protectionist trade policies and closing unfair tax loopholes for exporters, his fiscal agenda is fundamentally about redistributing wealth upward.
Under Trump’s “simplified” tax plan, millionaires would see taxes reduced by ten percent. Some families earning between $20,000 and $50,000 would pay more in taxes—for a shrinking social service infrastructure. The burden falls heaviest on lower-income workers, including the roughly 40 percent of the workforce earning less than $15 an hour. On the other side of the ledger, Trump seeks a $54 billion boost for military spending, to be offset by slashing social programs. Though these funds are technically considered “discretionary,” they support essential social welfare programs and public services for struggling households, which have already suffered years of budget cuts.
Trump’s vision to “strengthen” America would eviscerate the already disintegrating social-safety net. While he promised to rescue the dying middle class during his campaign, working-poor families will end up more vulnerable to global market volatility, with less job training, worse healthcare and weaker infrastructure. In turn, state budgets will be overwhelmed as pressure to maintain basic services falls on local agencies; as they pay higher taxes, poor households will see less public funding for their dilapidated school districts and community centers, as well as suffer more painful childcare costs. And while childcare subsidies for the poor might be axed, Trump has proposed a limited tax credit to finance childcare, through a capped sum that would largely target the middle and upper classes, not the neediest families.
But Trump still needs political support to pass his budget, particularly because fiscally conservative Republicans in Congress will likely oppose dramatic military spending increases, and prefer just slashing social welfare programs instead.
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Perhaps Trump’s popular base might become disillusioned as he shreds the healthcare system and slashes school budgets. And if he continues to suffer in the opinion polls, he might actually bend on some of his austerity drive. According to Oxfam America analyst Gawain Kripke, robust popular resistance could both stop the devastating cuts and push for new social investments in healthcare, education and the environment: “If the Trump administration goes off the rails… can we speak to the same audience and make a case for reform? There does seem to be a mobilizable base that can get angry.”
But whether that anger can now be channeled productively depends on whether progressive populists have a coherent program for achieving real social equity.
As a corrective progressive alternative agenda, Oxfam points to forms of development that veer away from conventional neoliberal “free market” growth, and is instead based on “adequate—as opposed to maximum—profits.” Alternatively structured industries would emphasize the development of worker-run cooperatives, rather than huge conglomerates, and democratically structured workplaces that prioritize “job security and egalitarian pay scales” over profits. Such companies, Oxfam suggests, “may also forego additional profits by paying workers and farmers fairer wages and prices, or incur greater costs in treating natural resources more sustainably.”
“The big thing is to put a lasso on the superwealthy.”
Rather than focus on GDP expansion (which Trump dramatically overestimates), Oxfam argues, public policy must focus on channeling wealth into equitable development that aims to correct social deficits, closing wealth divides, improving public health, addressing racial and gender segregation, and fostering democratic civic institutions.
In recent weeks, anti-Trump activists have protested the administration’s brutal crackdowns on immigration and threatening protections for immigrants, people of color, poor women and other marginalized groups. Now as Trump rolls out the finances for his assault on civil rights and vulnerable communities, critics are tasked with advancing a counterproposal for an economic program that narrows the abysmal wealth gap and redistributes resources equitably.
“If you look at it decile by decile,” Kripke says, “what’s really happening is that the superwealthy is just taking off from the rest of the population. Yes we should be trying to raise the incomes…But the big thing is to put a lasso on the superwealthy… [to respond to the problem of] these fractions of the economy being captured by the superwealthy and have a sustainable economy. So taxing high incomes, taxing wealth, taxing inheritance, these are ideas and proposals that need to be taken seriously, if you’re serious about reducing inequality.”
European anti-austerity movements might provide models for a redistributative agenda. Populist uprisings in debt-plagued countries like Greece and Spain have rejected the neoliberal restructuring programs imposed by international finance institutions. Instead, progressive lawmakers have put forward plans for taxing excessive wealth. UK Labour Party leader Jeremy Corbyn has proposed executive pay caps to help narrow widening wealth gaps within firms and ensure fairer wage distribution. In the US, activists are pushing a “Robin Hood tax” on financial transactions, to curb Wall Street’s runaway profits and redirect wealth toward social welfare.
Trump’s attempt to manage the budget like one of his businesses seems headed toward another one of his spectacular bankruptcies, and pushing a comprehensive alternative economic model might be the only counterweight to a deeply regressive budget. Disillusionment with Trump’s false “anti-establishment” politics could finally inspire a real populist uprising to rewrite the rules of the global economy from the bottom up.