Taxing the Poor

Andrew Harrer/Bloomberg/Getty Images
Treasury Secretary Steven Mnuchin and his wife, Louise Linton, holding an uncut sheet of one-dollar bills bearing Mnuchin’s name, Washington, D.C., November 2017

To live in the era of President Donald Trump is to witness, sometimes on a daily basis, wide-ranging and unprecedented assaults on basic constitutional norms. But if Ganesh Sitaraman, the author of The Crisis of the Middle-Class Constitution, is right, the greatest threat to our democracy may be the tax cut that the Republican Congress passed and Trump signed at the close of 2017. In Sitaraman’s view, “the number one threat to American constitutional government is the collapse of the middle class.”

The tax bill, cynically sold as a break for working families, will hasten that collapse. By 2027, according to the Tax Policy Center, 90 percent of its benefits will accrue to the richest 20 percent of Americans. It drastically cuts the corporate tax rate from 35 percent to 20 percent, and according to an April 2018 Congressional Budget Office report, it is likely to increase the federal deficit by $1.8 trillion over the next ten years, forcing reductions in safety-net programs such as Social Security. All of this ensures that the already unconscionable gulf between rich and poor in the US will grow even wider. Gary Cohn, Trump’s economic adviser until his recent resignation, told CNBC that “the most excited group out there are big CEOs, about our tax plan”—and for good reason.

The middle class is notoriously difficult to define, and Sitaraman does not attempt a specific definition. He describes it as including those who “aren’t extremely rich or extremely poor,” which isn’t extremely helpful. But his argument rests not on defining the middle class by income, education, or cultural norms, but on the difference between a community in which there is “relative economic equality” and one characterized by a large gulf between rich and poor: “A large middle class means that most members fall somewhere in the middle.”

Many have lamented the increasing wealth gap in this country; it was the principal theme of Bernie Sanders’s presidential campaign. Others have argued that more equitable societies are happier and healthier.1 But Sitaraman makes the persuasive case that reducing the gap between rich and poor is not just an issue of equity, morality, fairness, or utility but of the very survival of our constitutional republic.

Political theorists since the Greeks have worried about how to mediate conflicts between the haves and the have-nots. Aristotle argued that if the rich govern, they will hoard their wealth and oppress the poor, and that if the poor rule, they will confiscate and redistribute the property of the rich. In his view, therefore, a stable political community required a strong middle class. Without it, the polity will be “a city, not of freemen, but of masters and slaves, the one despising, the…

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