LAST Wednesday US president Donald Trump unveiled what he called the ‘biggest tax cuts in history’ – tax cuts only for the giant corporations and super rich; cuts that will inevitably stoke a crash in the world capitalist system that will be truly historic.
Trump is proposing to slash taxes for businesses both large and small, end inheritance tax, cut the rate of tax paid by the top income bracket and do away with taxes levied on the profits made outside the country by US companies. Not only giant corporations but the super-rich are also in line for a massive payout courtesy of Trump.
His proposals will also cut the ‘alternative minimum tax’ which is designed to stop the filthy rich from making so many claims for tax deductions that they end up paying no taxes at all. It calls to mind the famous words of Leona Helmsley (like Trump a real estate and hotelier multi-billionaire) who, when jailed for tax evasion in 2003, lamented ‘only the little people pay taxes’.
Trump plans to cut US corporate tax from 35% to 15% at a stroke, leading Trump’s chief economic advisor, Gary Cohn, to deliriously announce that: ‘We have a once-in-a-generation opportunity to do something really big.’ The really big thing he has in mind is handing an estimated $19.5 trillion to the bankers, bosses and billionaires while at the same time being completely silent about where this money will come from apart from vague promises that it will ‘grow’ the US economy.
Workers across the world will be familiar with this cry that handing trillions of free money to corporations and the rich through tax cuts, quantitative easing and zero rates of interest will grow a capitalist economy that is sinking like a stone.
All this free money, paid for by the working class through brutal austerity cuts, has gone in only one direction – into the pockets of the bankers and speculators and used in an orgy of speculation on the stock market of the world.
This has already created a gigantic inflationary bubble in share prices that Trump’s new tax cuts will push to the point of explosion. The catastrophic consequences of Trump’s policies may have been greeted ecstatically on Wall Street and the stock markets but it has caused a deep sense of impending doom amongst the more economically literate bourgeois economic commentators.
One of this small band, Jeremy Warner writing in the Telegraph, warned: ‘Trump’s boom is pouring more oil on the flames.’ He points to the sobering fact that shares are selling at over 25 times the earnings of the companies they are invested in.
In other words they are being traded at over 25 times the amount they actually make or are worth.
This is the giant inflationary bubble that will burst and bring down the banks and stock markets of the world. Warner also notes that a similar ratio was reached just before the great financial crash of 1929 when Wall Street collapsed along with the banks. He writes: ‘No one knows what will trigger the next bust, but shares are as overvalued as before the Great Crash.’
The Great Crash of 1929 caused the ‘hungry thirties’ of poverty and starvation for workers and their families in the US, Britain and across Europe, an economic collapse of capitalism that led directly to the second imperialist world war. The next crash – the really big historic crash of capitalism internationally – is well advanced and Trump’s plans will accelerate this crash dramatically.
For the capitalist class surviving this crash means making certain that it is dumped on the backs of the working class and the peoples of the world. This war of the capitalist class against its own workers and the peoples of the world will rapidly drive the revolutionising development of the working class in the US and Europe.
This powerful movement of workers is rapidly reaching the conclusion that the only way forward for workers and youth today is in putting an end to bankrupt capitalism once and for all through the socialist revolution and advancing to a socialist society.
