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) /

TRUMP AND THE REPUBLICANS DO NOT CARE ABOUT MAKING GOVERNMENT WORK BETTER

The Trump administration and the Republicans in Congress are not trying to make government work better. They’re focused on destroying our federal government and making it unable to perform functions we all rely on in our everyday lives. They also plan to give huge tax cuts to wealthy individuals and corporations. Please contact your members of Congress and ask them to oppose the draconian budget Republicans have proposed.

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

I probably don’t need to tell you that the Trump administration and the Republicans in Congress are not trying to make government work better. Rather, they want to destroy our federal government and leave it unable to perform functions we all rely on in our everyday lives.

This post will examine the Republicans’ budget proposal. My previous post documented the random slashing of personnel, which does not increase efficiency or make government work better. More examples of this have emerged in recent days. The Trump administration has disbanded the information technology group that was working to make the federal government’s public websites more user-friendly and functional. So, for example, it will no longer be working to make it easier and faster to get a passport from the Department of State or to use the free tax filing service of the IRS. [1] Many cybersecurity personnel from multiple agencies have been fired. Computer systems in the U.S. are not being effectively protected and Russia and other adversaries know this. Moreover, it has been reported that the Trump administration has stopped efforts to counter Russian cyberattacks. [2] Obviously, these actions are not doing anything to make the government more effective and efficient; quite the opposite.

Turning to the budget, the Republicans in Congress have proposed draconian cuts to agency and program budgets. They’ve set dollar-amount targets for cuts that reflect no analysis of need or efficiency. Their budget proposal has big cuts in everything that supports working Americans and their families. However, it includes big increases for defense and immigrant detention and deportation. It also extends and expands the very large 2017 tax cuts for wealthy corporations and individuals, which would cost $4.5 trillion over the next ten years. For example, the wealthiest 1% of Americans, with yearly incomes of over $743,000, would get an annual tax cut averaging $62,000. This is more than the yearly incomes of most of the 72 million people in the US who receive health insurance under Medicaid, many of whom are seniors in nursing homes. And make no mistake about it, Medicaid would have to be cut dramatically to meet the Republicans’ budget targets. [3]

These budget cuts are NOT about cutting waste or fraud; they are about cutting programs that working Americans rely on every day – from health care to nutrition programs to student loans to child and elder care. These deep cuts in programs are being proposed to make the tax cuts for wealthy individuals and corporations affordable, i.e., to keep them from exploding the budget deficit. Note that the Republicans’ budget proposal does NOT extend the tax credits that make health care more affordable under the Affordable Care Act (aka Obama Care) for 20 million low- and middle-income Americans, including three million small business owners and self-employed individuals. The Republicans’ budget proposal would also shift significant costs to state and local governments – which don’t have the capacity to pay them.

Despite the draconian programmatic cuts, the Republican budget proposal would increase the national debt by $4 trillion in less than two years.

It is abundantly clear that the Trump administration and Republicans in Congress, along with Musk and DOGE, have no interest in efficiency or making government work better. They want to break our government and turn our democracy into a dictatorship. Moreover, they act like bullies; being cruel and hurting people appears to be one of their goals. Why else would you separate children from parents and post gloating videos of immigrants in chains?

Mindless slashing of agency budgets and staff is harming our safety in multiple ways and weakening our economy. It will increase homelessness, hunger, and hardship for many; it will allow diseases to spread and environmental damage to grow.

I urge you to contact your US Representative and Senators and ask them to take strong action to oppose the draconian budget cuts Republicans are proposing.

If you have members of Congress who are Democrats, urge them to form a shadow cabinet and identify a party spokesperson. These individuals should critique the actions of the Trump administration on a daily basis by:

Identifying what it’s doing right and what it’s doing wrong.
Sharing data and people’s stories to document the damage that’s being done.
Presenting what Democrats would do differently and how people’s lives would be better if Democrats were running the government.

You can find contact information for your US Representative at http://www.house.gov/representatives/find/ and for your US Senators at http://www.senate.gov/general/contact_information/senators_cfm.cfm.

In my next post, I’ll share some profiles in courage of those resisting and good news about how the resistance is growing and proving to be effective.

[1] Hubbell, R., 3/3/25, “Every effort matters – now more than ever!” Today’s Edition Newsletter (Every effort matters—now more than ever!)

[2] Cox Richardson, H., 3/2/25, “Letters from an American,” (March 2, 2025 – by Heather Cox Richardson)

[3] Parrott, S., 2/25/25, “House budget would increase costs and hardship for many while providing huge tax breaks for a wealthy few,” Center on Budget and Policy Priorities (https://www.cbpp.org/press/statements/house-budget-would-increase-costs-and-hardship-for-many-while-providing-huge-tax)

CORPORATIONS ARE NOT PAYING THEIR FAIR SHARE IN TAXES

Large, profitable corporations are NOT paying their fair share in federal income tax. President Trump and the Republicans passed a huge tax cut for corporations in 2017 that exacerbated this problem. It cut the stated corporate tax rate from 35% to 21% (a 40% cut) and created new loopholes that let them reduce what they actually pay.

President Biden and Democrats in Congress are working to get big corporations to pay their fair share of taxes. The 2022 Inflation Reduction Act established a 15% minimum corporate tax and funded expanded tax enforcement. In addition, in 2021, the Biden administration negotiated a global minimum tax treaty with other nations but its approval has been blocked in Congress. [1] More on this later.

A study of the effects of the 2017 Tax Cut and Jobs Act found that the 342 large corporations that were profitable in every year from 2018 to 2022 – so it would be reasonable to expect that they would be paying significant taxes – actually paid just 14.1% of their profits in taxes (i.e., their “effective” tax rate). [2] This is only two-thirds of the tax rate stated in the law. In other words, these 342 corporations, as a group, paid an average of $55 billion less per year in taxes than the stated tax rate would require. [3] So, while big, profitable corporations were paying 14.1% of their profits in taxes, the average household was paying 13.6% of its income in federal income taxes in 2020. [4]

Moreover, 23 of these 342 profitable corporations paid NOTHING in federal taxes for the whole five-year period, despite being profitable in every one of those years! Even with $131 billion in profits over this period, these 23 big corporations (as a group) received tax refunds totaling almost $4 billion.

Another 109 of the 342 profitable corporations paid no federal tax in at least one year of the 2018 – 2022 period. In the years when they paid no tax, they, as a group, had $258 billion in profits but received over $14 billion in tax refunds.

Fifty-five of the 342 profitable corporations had effective tax rates of under 5% for the five-year period, including:

Bank of America: $139 billion in profits $5.3 billion in taxes 8% rate
AT&T: $ 96 billion in profits $2.5 billion in taxes 6% rate
Citigroup: $ 35 billion in profits $1.5 billion in taxes 3% rate
General Motors: $ 33 billion in profits $0.4 billion in taxes 3% rate
Nike: $ 19 billion in profits $1.0 billion in taxes 9% rate
T-Mobile: $ 18 billion in profits $-0.0 billion in taxes -0.4% rate
FedEx: $ 16 billion in profits $0.7 billion in taxes 6% rate
Net Flix: $ 15 billion in profits $0.2 billion in taxes 6% rate
Molson Coors: $ 7 billion in profits $0.3 billion in taxes 8% rate
Voya Financial: $ 4 billion in profits $-0.3 billion in taxes -8.0% rate
Darden Restaurants: $ 4 billion in profits $0.0 billion in taxes 8% rate
Office Depot: $ 7 billion in profits $-0.0 billion in taxes -4.6% rate

Also notable was that in an analysis by industry, the oil, gas, and pipeline industry had the second lowest effective tax rate of just 2.0%. Our tax policy has a long way to go if we want to use it to incentivize movement away from fossil fuels!

Here are some key statistics that make the case that corporations are not paying their fair share of taxes currently: [5]

The overall tax rate actually paid by corporations has fallen steadily from over 50% in the early 1950s to well under 20% today. (This is the cumulative effective tax rate for federal, state, and local taxes.)
In the 1950s, corporate taxes provided between 25% and 33% of federal revenue. For the past 40 years, corporate taxes have provided less than 15% of federal revenue.
As a share of the U.S. economy (GDP), corporate profits have risen from 8% in 1980 to 12% in 2022, a 50% increase. Meanwhile, corporate taxes have fallen from roughly 3% to 2% of GDP.

President Biden and Democrats are working to get big corporations to pay their fair share of taxes. The 2022 Inflation Reduction Act, passed by Democrats in Congress and signed by President Biden, established a 15% minimum corporate tax. More than half of the 342 corporations in the study cited above would have paid more in taxes with a 15% minimum tax rate. It’s estimated that it will generate over $200 billion in revenue over ten years from billion-dollar corporations. The Inflation Reduction Act also increased funding for enforcement of tax laws, which will reduce tax dodging by big corporations. [6]

In 2021, the Biden administration negotiated a global minimum tax treaty with other nations, but Congress has blocked approval of it. It would require multinational corporations to pay at least 15% of their profits in taxes. This would prevent corporations from avoiding taxes by shifting profits on paper to low tax countries. [7]

Note that Trump and the Republicans are stating in the presidential campaign that they will make the 2017 tax cuts permanent (they expire in 2025) and add on even more tax cuts. Among other things, they want to further cut the corporate tax rate from 21% to 15%. This would give the 100 largest, U.S. corporations, as a group, an estimated $50 billion a year in additional profits.

[1] Johnson, J., 9/27/24, “Dems name and shame companies paying executives more than they pay in federal taxes,” Common Dreams (https://www.commondreams.org/news/executive-pay-federal-taxes)

[2] Gardner, M., Wamhoff, S., & Marasini, S., Feb. 2024, “Corporate tax avoidance in the first five years of the Trump tax law,” Institute on Taxation and Economic Policy (https://itep.org/corporate-tax-avoidance-trump-tax-law/)

[3] Johnson, J., 2/29/24, “Corporate tax avoidance rampant during first five years of Trump-GOP law: Study,” Common Dreams (https://www.commondreams.org/news/trump-corporate-tax-avoidance)

[4] Anderson, S., Tashman, Z., & Rice, W., March 2024, “More for them, less for us,” Institute for Policy Studies and Americans for Tax Fairness (https://ips-dc.org/report-corporations-that-pay-their-executives-more-than-uncle-sam/)

[5] Anderson, S., Tashman, Z., & Rice, W., March 2024, see above

[6] Johnson, J., 9/27/24, see above

[7] Johnson, J., 2/29/24, see above