The outrageous and cynical nature of the Trump presidency has ended up radicalizing the Democratic opposition and seems to be kindling new ideas, even about taxation.
I just got back from the East Coast of the United States. I was struck by the change in ambiance since my last visit last year. At that time, Donald Trump was the main topic of conversations with friends and colleagues, but he has now almost completely disappeared from their personal radars. Of course, not an hour goes by without his large, orange head appearing on television screens in sports bars and airports, but he appears to have become a circus freak, like a racist, sexist old uncle that one crawls around shamefully at family reunions.
Life continues or, rather, it is beginning again. There is a sense of a new world in American intellectual and political circles. Trump’s presidency is so grotesque and so plutocratic that it has woken people up. People are radicalizing; it is striking!
The current period is often compared to the decades following the Civil War, a time marked by an explosion of inequalities that paralleled the development of new communications, the railroads and large economic growth. Mark Twain cynically named this period the “Gilded Age,” capturing how it shone on the surface but was corrupt on the inside. At the time, the term referred to the corruption of the American Dream, a dream of equality for everyone in contrast to the concentration of wealth found in Europe! To compare this current period to the Gilded Age is essentially to call out an economic model based on unearned income and that only produces social injustice and feeds extremes. I could certainly have a bias here, but it seems to me that the intellectual and political revolution is taking place on economic grounds.
Americans are divided on social issues like abortion, religion, immigration, the bearing of arms, etc. But a majority is in favor of a firm public policy to regulate the power of large companies … and a tax increase. Thus, Sen. Elizabeth Warren of Massachusetts, a candidate in the Democratic primaries, has included in her program a tax on estates worth more than $50 million, and 61% of Americans support it. Wait … what? A solidarity tax on wealth in the United States? That is the change in worldview I was talking about.
Another face in these changing times is Alexandria Ocasio-Cortez, who was elected to the House of Representatives in the last midterms. I would need an entire article to describe the fervor that each of her remarks provokes. She is proposing nothing less than a marginal tax of 70% on incomes over $10 million!
Beyond campaign promises and polls, I felt this change myself last week. I first felt it at Princeton while presenting our proposal for a solidarity tax on wealth in Europe and a European tax on multinational companies and high incomes. I had 50 Americans in front of me; students and professors. Only one or two white-haired men rolled their eyes in exasperation. The rest of the audience was attentive. It seems to me that our proposals would have been mocked and deemed unrealistic in the United States three years ago. I felt that same change a second time at the International Monetary Fund, where I presented our findings on the activity of European banks in tax havens. I had in front of me about 20 government employees from around the world who were experts in tax evasion and who were eager to hear about European data.
Tax evasion is a subject that this conservative institution in Washington takes very seriously. One reason is, no doubt, strong pressure from the general public; another is renewed pressure from elites. Half the room was born in the 1980s and did not need to be convinced of the topic’s importance. Nonetheless, there will still need to be sex scandals involving Trump and a sharp rise in the unemployment rate for him to lose the election next year. But change is happening, and that feels good.