PUBLIC POLICIES TO REDUCE ECONOMIC INEQUALITY IN AMERICA

Economic inequality is at record breaking levels in the U.S. The American oligarchy is powerfully wielding its economic and political power. Public policies can stop and reverse the growing economic inequality. See examples below. If Democrats or others want to garner support and votes, they should support policies to reduce economic inequality and create a secure economic future for working Americans.

(Note: If you find a post too long to read, please just skim the bolded portions. Thanks for reading my blog!)

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Economic inequality is at record breaking levels in the U.S. America now has 916 billionaires whose combined wealth is $8 trillion (yes, trillion). Their wealth has increased by over $1 trillion in the first nine months of 2025. Since the passage of the Republican tax cut bill in 2017, it’s increased from $3 trillion to $8 trillion. For comparison, the least wealthy 167 million Americans (half the population) have combined wealth of just $3.6 trillion. In other words, the combined wealth of 167 million Americans is less than half the wealth of the 916 billionaires. The rise in billionaires’ wealth reflects the transfer of profits of economic activity away from workers and to owners and investors.

A big part of this is the increase in the value of the stocks of companies these billionaires own and in which they invest. Provisions in the 2017 Republican tax cut bill (that were continued by the GOP’s Big Ugly Bill in July 2025) give huge tax breaks to corporations. For example. Alphabet (Google’s parent) gets $17.9 billion, Amazon gets $15.7 billion, and Microsoft gets $12.5 billion.

With their great wealth, these billionaire oligarchs have great political power, especially given the laws and court decisions allowing unlimited spending in political campaigns. This basically allows them to buy our elected officials, as Elon Musk bought Trump with the over $250 billion he spent on Trump’s campaign. “Highly concentrated wealth leads naturally to concentrated political power.” [1] As Supreme Court Justice Louis Brandeis wrote almost 100 years ago, “We may have democracy, or we may have wealth concentrated in the hands of a few, but we can’t have both.”

The oligarchs have been wielding their political power very effectively for the last 45 years, and especially in the last ten years. They’ve succeeded in getting policies enacted that enrich themselves and leave American workers not just short changed, but shafted. Public policies to provide economic security for working Americans will never happen if the oligarchs retain their political and economic power. (This previous post presented policies to increase workers’ incomes and this post highlighted policies to reduce the cost of living for them.)

Therefore, the policies that allowed economic inequality to grow over the last 45 years, and to explode in the last 25 years, need to be changed. A group called Patriotic Millionaires has proposed “The Money Agenda,” a set of policies that would reduce economic inequality and “permanently stabilize the economic lives of working people, stimulate wide-spread economic growth, and ensure prosperity and stability for America’s next 250 years.”

The Money Agenda includes four pieces of legislation. Here’s a quick overview of them:

The Equal Tax Act
- Increase tax rates on income from wealth (e.g., capital gains) so they are the same as the tax rates on income from work
- Close the loophole that allows the wealthy to give away appreciated assets and dodge anyone having to pay tax on their increase in value (i.e., the stepped-up basis loophole)
The Anti-Oligarch Act
- Phase 1: Stop the growth of economic inequality by putting a reasonable tax on the true income of the wealthy (e.g., including increases in wealth) and on the intergenerational transfers of wealth
- Phase 2: Reduce economic inequality by implementing a wealth tax on the ultra-rich
The “Cost of Living” Tax Cut Act
- Establish a Cost of Living Exemption of about $45,000 in order to eliminate income tax on income up to a reasonable cost of living for a single adult without children
- Pay for the lost revenue by putting a surtax on incomes over $1 million
The “Cost of Living” Wage Act
- Raise the minimum wage to a living wage for a single adult with no children, or about $21 per hour (roughly $45,000 per year for full-time work) and index it to inflation
- Protect workers from loss of income due to automation or AI

The Economic Policy Institute recently issued a report titled “Raising taxes on the ultrarich: A necessary first step to restore faith in American democracy and the public sector.” It states that if “policymakers are unwilling to raise taxes on income derived from wealth, the tax system can never be made as fair as it needs to be.” Its recommendations echo the provisions of The Equal Tax Act and The Anti-Oligarch Act above.

It also proposes:

Replacing the estate tax with a progressive income tax on those receiving an inheritance.
Raising the top marginal income tax rate back to its pre-2017 level (i.e., from 37% to 39.6%). This would generate revenue of over $30 billion a year. (Note: In 1980, the top rate was 70% and it was over 90% in the 1950s.)
Returning the corporate tax rate to 35% (where it was before the 2017 Republican Tax Cut Act reduced it to 21%). This would generate over $250 billion a year in revenue.
Closing tax loopholes that the ultrarich and corporations use to evade taxes.
Strengthening the IRS’s capability to enforce tax laws. The IRS estimates that $600 billion in taxes that are owed are not paid each year. However, in recent decades it has lacked the resources to enforce the laws and collect those taxes because Republicans have underfunded it.

If Democrats, or another party such as the Working Families Party, want to garner support and votes, they should support these policies to reduce economic inequality and the economic and political power of the American oligarchy. These and related policies would also provide economic security for working Americans. Democrats should be unequivocal in embracing economic populism and stop cozying up to the oligarchy and their PACs for campaign contributions. [2] To consistently win elections, Democrats need to loudly and unequivocally promote a vision of a more economically secure future for working Americans.

[1] Bivens, J., 11/17/25, “Raising taxes on the ultrarich,” page 5, Economic Policy Institute (https://www.epi.org/publication/raising-taxes-on-the-ultrarich-a-necessary-first-step-to-restore-faith-in-american-democracy-and-the-public-sector/)

[2] Reich, R., 11/3/25, “What the Democrats must do. Now!” (https://robertreich.substack.com/p/what-the-democrats-must-do-now) /

THE AMERICAN STRUGGLE BETWEEN OLIGARCHY AND DEMOCRACY

An American oligarchy has battled for control of our country since its founding. In 1980, the American oligarchy re-emerged and has been undermining democracy and skewing government policy. Defenders of democracy are fighting back, including with growing protests against and resistance to King Trump and his administration. Please find and participate in an Oct. 18 No Kings protest near you.

SPECIAL NOTE: We need millions of Americans at the No Kings protests on October 18 in defense of democracy. Please support this however you can. You can find an event near you here.

(Note: If you find a post too long to read, please just skim the bolded portions. Thanks for reading my blog!)

(Note: Please follow me and get notices of my blog posts on Bluesky at: @jalippitt.bsky.social. Thanks!)

An American oligarchy based on wealth and privilege, with race and religion lurking behind them, has battled for control of our country since its founding. The southern plantation owners were the first American oligarchy. The businessmen and industrialists of the late 1800s and early 1900s, who were dubbed the Robber Barons, were the second American oligarchy.

The first American progressive era from the 1890s through 1945 pushed back against oligarchy and the Great Depression, which was caused by the greed of the oligarchs. President Franklin D. Roosevelt’s New Deal and the growth of government and government power due to World War II relegated and regulated the oligarchy to the back seat. This put democracy and we the people in the driver’s seat and in control of America.

The period after World War II, from 1945 to 1980 was the second progressive era. An unwritten post-war social compact framed American society and the economy. It was based on three pillars:

Corporations served all stakeholders: workers, customers, communities, and shareholders;
Workers had a right to unionize and receive fair wages and safe working conditions; and
Government provided a safety net, managed capitalism, and leveled the playing field.

The result was an economy and society where, from 1945 to 1980, the rising tide did lift all boats. Economic inequality narrowed and America moved toward its promise of equal opportunity for all. Workers’ wages increased in accordance with their increases in productivity. The middle class grew along with economic security. Each generation was better off than the previous one. Democracy was working well.

In 1980, with the election of President Reagan, the American oligarchy re-emerged. For the last 45 years, it has been undermining democracy and skewing government policy in its favor. (See this previous post for more details.) Although Republicans have been the driving force, Democrats have contributed to this shift by supporting business deregulation and unconstrained globalization. Democrats also failed to support unions and failed to reform our campaign finance system. Moreover, they have come to rely on campaign contributions from wealthy individuals and corporations.

All this has led to 45 years of dramatically growing income and wealth inequality. The middle class has shrunk, and workers’ wages have increased much less than their increases in productivity. Many Americans have lost their economic security. The public’s faith in government and democracy has declined dramatically.

However, there are signs that a third American progressive era and a resurgence of democracy may be emerging. There is increasing acknowledgement and public awareness that:

Wealth and income inequality have grown to unacceptable levels.
Huge corporations tend to engage in monopolistic behaviors such as price fixing and price gouging; decreasing quality, choice, and customer service; and poor treatment of employees in terms of compensation and safety.
Unrestrained capitalism is not good for consumers, workers, communities, or our planet.
The oligarchs have rigged our economic system in their favor so that the rising tide is lifting only their yachts.
Oligarchy is anti-democratic and tends to turn into authoritarianism and fascism, i.e., white, male, Christian nationalism.

Bob Kuttner, a long-time, very astute and thoughtful observer and analyst of American politics and policies, has concluded that American democracy’s efforts to balance capitalism are doomed to fail. The incentives and power of huge corporations and huge wealth are too great and will inevitably overwhelm America’s brand of democracy. He concludes that significant public ownership of key sectors of the economy, i.e., democratic socialism, is necessary to keep capitalism in check. [1]

As Bob Reich recently wrote, “Capitalism is compatible with democracy only if democracy is in the driver’s seat. … [Otherwise] It fuels despotism.” [2] This is reminiscent of the quote from Supreme Court Justice Louis Brandeis back in the 1930s: “We can have democracy in this country, or we can have great wealth concentrated in the hands of a few, but we can’t have both.”

In many sectors of our economy there’s a clear need for strong regulation or public ownership including in health care, communications (including media and the big technology platforms), utilities and energy, the transportation system, banking and finance, housing, and food and agriculture. In these areas, a publicly owned option would be more effective and efficient because it wouldn’t have to cover the costs of profits, big executive pay packages, and advertising. For example, in the health care sector, when the Affordable Care Act (ACA, aka Obama Care) was being developed, health care providers and insurance companies vehemently opposed a public option in the health care market place (basically Medicare available to everyone) because they knew it would be more effective and efficient. This is also why they oppose Medicare of All and are working feverishly to undermine Medicare with their privatized Medicare Advantage plans. We need public Medicare for seniors and a public option for everyone else to stop the rapacious, for-profit health care businesses that put profits before patients. (See previous posts here, here and here for more details.)

The growing protests against and resistance to King Trump and his administration’s actions and policies are signs of a resurgence of democracy and an emerging progressive era. The successes are many, on the streets and in the courtrooms, sometimes small but nonetheless important, and are underreported by the mainstream media. Forcing media executives to put the Jimmy Kimmel show back on the air was a huge and very visible success. (For lots of current good news see Jess Craven’s Chop Wood Carry Water blog here.)

In this vein, please find an October 18^th No Kings event near you here and participate and support it in whatever way you can. We, the American public, as citizens, consumers, and workers, must stand up for democracy, otherwise, we’ll continue down the slippery slope to oligarchy, authoritarianism, and fascism. We can stop the anti-democracy slide, as we did in the Jimmy Kimmel case.

We need millions of Americans engaged in the No Kings protests and in the many, many other smaller protests that are occurring daily. Thank you for all you’re doing! Please keep up the great and important work to save our democracy!

My next post will identify additional signs of a resurgence of democracy and the beginning of a third progressive era, including a surge in unionization, campaign finance reforms, and actions and elections at the state and local levels.

[1] Kuttner, R., 12/1/21, “Capitalism vs. liberty,” The American Prospect (https://prospect.org/politics/capitalism-vs-liberty/)

[2] Reich, R., 9/26/25, “Why are we so polarized? Why is democracy in such peril?” Blog post (https://robertreich.substack.com/p/why-are-we-so-polarized)

STANDING UP TO TRUMP AND CORPORATE OLIGARCHS

Oligarchy Definition A small group of people having formal and informal power based on (1)wealth; (2) connections; and (3) privilege.

American oligarchs have spent 45 years and billions of dollars undermining democracy and skewing government policy in their favor. We need to stand up and make Trump and corporate CEOs understand that the long-term success of their companies and our country depend on the trust and support of us, their customers and voters. We did this in a big way with the reaction to media executives pulling the Jimmy Kimmel show off the air. We need to do it again and again.

SPECIAL NOTE: We need millions of Americans at the No Kings protests on October 18 in defense of democracy. Please support this however you can. You can find an event near you here.

(Note: If you find a post too long to read, please just skim the bolded portions. Thanks for reading my blog!)

(Note: Please follow me and get notices of my blog posts on Bluesky at: @jalippitt.bsky.social. Thanks!)

American oligarchs, i.e., wealthy individuals and their large corporations, have spent at least the last 45 years undermining democracy and skewing government policy in their favor by: (See this previous post for more details.)

Increasing, coordinating, refining, and hiding their spending of billions of dollars on election campaigns. They spent over $10 billion in the 2023-24 federal election cycle alone.
Spending billions of dollars on lobbying the federal government, currently to the tune of $4 billion a year.
Moving tens of thousands of people through the revolving door between jobs in their corporations and in the government agencies that regulate them.

These efforts have been very successful; their return on investment has been extraordinary. Trump and his anti-democratic, authoritarian, and fascist administration are the culmination of this work that has undermined our democracy and skewed government policies and our economy to favor the oligarchs. Examples of skewed government policies include the following.

The individual income tax rates on oligarchs’ incomes have been cut from 70% in 1980 and 92% in the 1950s to 37% today. Income taxes on income from wealth, i.e., long-term capital gains, have been cut from 28% in 1980 to 15% in 2012 but are back up to 24% today. Note that the tax rate on income from wealth (i.e., unearned income) has always been much lower than the tax rate on income from work (i.e., earned income). This benefits the oligarchs and entrenches and exacerbates wealth inequality. Furthermore, increases in wealth that aren’t cashed in aren’t taxed at all. As a result, the richest billionaires pay about 3.4% in income tax on their incomes while the average American pays 14.5%.

Corporate income tax rates have also been cut from 46% in 1980 to 21% today. Moreover, tax loopholes allow corporations many strategies to avoid taxes. In particular, multi-national corporations artificially shift profits to foreign countries with very low taxes. Corporations have also been allowed to move jobs to low-wage countries and to resist and undermine workers’ unions. Roughly one out of every three private sector workers was a union member in the 1950s; today it’s one out of every 15. [1]

Antitrust laws have basically been unenforced for the last 45 years. As a result, many sectors of the American economy are dominated by a few, large, monopolistic corporations. Reduced competition means corporations can raise prices, cut quality, and strong-arm employees. Deregulation has left consumers vulnerable to poor products and frustrating services.

All of this has led to 45 years of dramatically growing income and wealth inequality. The 50% of Americans with the least wealth now, collectively, have only 2.5% of national wealth (less than $23,000 each on average). The wealthiest 1% of Americans own 33% of national wealth (about $15 million each on average). Pay for CEOs is now 1,094% higher than in 1978, while a typical workers’ pay has only increased 26%. As a result, the CEO-to-worker pay ratio grew from 31 times a typical worker’s pay in 1978 to 281 times in 2024. [2] And CEOs now believe that their only responsibility is to maximize returns for shareholders; other stakeholders, including workers, customers, and communities, are not a matter for concern.

The oligarch’s successful assault on our democracy and public policies has resulted in many Americans losing their economic security, as well as their trust in government and democracy. Many of them don’t feel it’s worth voting because they don’t believe it’s going to make any difference. They believe government is controlled by special interests working to benefit themselves. These Americans are angry and fearful about the future. Therefore, they are willing to believe the lies that Trump tells them about bringing back their good jobs and wages. And they are willing to overlook his undermining of democracy.

We, American consumers, need to make corporate CEOs understand that the long-term success of their companies depends on the trust and support of us, their customers. We did this in a big way with the reaction to media executives pulling the Jimmy Kimmel show off the air in response to President Trump’s displeasure with him. We’ll need to do this again and again to wake up CEOs and to get them to focus on the long-term instead of pleasing the would-be dictator in the White House in the short-term.

The spinelessness of corporate CEOs in the face of Trump makes it clear that they “are poorly suited to be custodians of democracy or counterweights to presidential overreach.” [3] “Capitalism is compatible with democracy only if democracy is in the driver’s seat. … [Otherwise] It fuels despotism.” [4]

We, the American public, consumers and workers, must stand up for democracy and for its regulation of corporations and capitalism. Otherwise, we’ll continue down the slippery slope to oligarchy, authoritarianism, and fascism. We can stop this slide, as we did in the Jimmy Kimmel case.

I look forward to seeing millions of Americans engaged in the No Kings protests on October 18 and in many, many other smaller protests daily. Thank you for all you’re doing! Please keep up this great and important work to save our democracy!

Find an October 18^th No Kings event near you here and participate and support it in whatever way you can.

For lots of current good news see Jess Craven’s Chop Wood Carry Water blog here.

[1] Economic Policy Institute, retrieved from the Internet 9/29/25, “State of Working America: Unions,” (https://data.epi.org/unions/union_members_historical/line/year/national/percent_union_members_historical/overall)

[2] Gould, E., Bivens, J., & Kandra, J., 9/25/25, “CEO pay increased in 2024 and is now 281 times that of the typical worker,” Economic Policy Institute (https://www.epi.org/blog/ceo-pay-increased-in-2024-and-is-now-281-times-that-of-the-typical-worker-new-epi-landing-page-has-all-the-details/)

[3] Edelman, L., 9/23/25, “Why corporate leaders are appeasing Trump,” The Boston Globe

[4] Reich, R., 9/26/25, “Why are we so polarized? Why is democracy in such peril?” Blog post (https://robertreich.substack.com/p/why-are-we-so-polarized)