The Art Of Misdirection

While it is difficult in some ways to attribute anything resembling a method to the madness of the American Moron-in-Chief, it would be wrong to think he is totally unmoored and rudderless. Trump's tax-reform plan attests to this. As does the furor that was stoked over U.S. Health Secretary Tom Price's obscene and very expensive use of charter flights on the American public's dime, for which he has now walked the plank. Both serve, I believe, as a misdirection to obscure a much more sinister long-term goal, one that all citizens of so-called liberal democracies, including Canada, should be concerned about.

The first misdirection comes in the preamble to the tax plan:

It is now time for all members of Congress — Democrat, Republican and Independent — to support pro-American tax reform. It’s time for Congress to provide a level playing field for our workers, to bring American companies back home, to attract new companies and businesses to our country, and to put more money into the pockets of everyday hardworking people.
- President Donald J. Trump

I won't belabor the obvious here about the risible and false association drawn above between tax cuts and economic growth, but let's just say the fact that corporate Canada was sitting on about $700 billion in 2014 is a sterling example of how ineffective a low tax regime is in creating jobs.

And there is no doubt that corporations and the wealthy will disproportionately benefit from the proposed changes, which aims to:

- Cut the corporate tax rate to 20 per cent, down from 35 per cent. Conservatives are framing the lower corporate tax rate as something that will increase investment and help businesses create jobs.

- Lower the top tax rate for so-called "pass-through" businesses to 25 per cent. These businesses, such as partnerships, S corporations or limited liability companies (LLCs), are only taxed on individual income.

- Eliminate the state and local tax deduction for individuals, thus taking away a break for taxpayers in highly taxed states such as New York, New Jersey and California.

- Scrap the alternative minimum tax (AMT), which was designed to prevent high-income earners from using loopholes to pay zero tax.

- And repeal the estate tax, a provision that affects very wealthy people who leave money to their heirs. The tax is currently set at 40 per cent.

Then there is the Trump claim that he will not benefit from the tax cuts, something that is demonstrably false.

But the fiction surrounding these tax cuts conceals a far more diabolical truth, one that will become apparent, I suspect, in the not-too-distant future. But to get at that truth, one more fiction needs to be dismantled, the one that says this kind of deficit spending will burden future generations. That assertion presupposes that at some point, taxes will have to be raised, and one's children and grandchildren will be paying them.

Personally, given the neoliberal nature of democracies today, I think that is absolute rubbish.

Putting aside that politicians generally lack the fortitude or the integrity to rescind tax breaks (look, for example at the fact the Harper TFSA still exists under the Trudeau government), let alone raise taxes, the truth is that future generations will pay for these deficits, just not in the way one might expect.

Payment will be extracted, not through increased taxation, but with the gutting of American social programs, entitlements like Medicaid and Social Security, etc. This will be coupled with an increasing rate of privatization of public resources, the neoliberal wet dream. And who will feel these cuts the most? The poor and the working class, most immediately, followed by the middle class through the much higher rates they will pay for newly privatized services, utilities, etc.

Already we have seen this plan being enacted in Canada, with more just around the corner. Consider the great privatization of Hydro One that has taken place under Premier Kathleen Wynne, something about which I have posted in the past. A boon to Bay Street and a bane to Main Street, it was done under the pretense of allocating all of the profits to green infrastructure initiatives. Predictably and cynically, however, Wynne has instead used some of the money to balance the books while also serving as a willing vessel for the neoliberal agenda.

There is every indication that the federal government is watching such betrayals of public ownership with avid interest. I have previously written about Justin Trudeau's secret study to privatize Canada' major airports. Again, the argument being advanced is that it would free up billions for infrastructure projects; more accurately, as Craig Richmond, the chief executive officer of the Vancouver Airport Authority, says,

“This idea of a one-time payment, that’s like selling the family jewels and then regretting it forever..."

Except, of course, there is never any semblance of regret when it comes to the nabobs of neoliberalism and their government functionaries, all of whom view public assets as fit only for corporate plunder.

So yes, everyone should evaluate each policy and event on its own merit. People are right to be disgusted with Tom Price's profligate abuse of taxpayer money, and people should be outraged that Trump's "middle class miracle" will benefit mainly the wealthy. But they should also be acutely aware of and outraged by one other thing: the purposeful misdirection that all such things represent, and should consequently rise up in deep protest as more of the neoliberal agenda is carried out by their kleptocratic Commander-in-Chief and his assorted masters and minions.