Will Donald Trump benefit the enraged white working class that brought him into the White House? To answer this, one must examine his plans and the desires of congressional Republicans. One must also consider how these plans might affect the world economy. The conclusion is straightforward: some people will indeed benefit but the white working class will not be among them. Republicans have long stoked rage they do not assuage. Mr Trump has taken this approach in new directions.
Huge, permanent and regressive tax cuts seem the one certainty. It is something on which Mr Trump and congressional Republicans agree. The revised Trump plan would reduce the top individual income tax rate to 33 per cent and the corporate tax rate to 15 per cent. It would also eliminate the estate tax. The highest-income taxpayers — 0.1 per cent of the population, those with incomes over $3.7m in 2016 dollars — would receive an average cut of more than 14 per cent of after-tax income. The poorest fifth’s taxes would fall by an average of 0.8 per cent of taxed income. To those who hath, it shall be given.
Mr Trump (much less so the congressional Republicans) plans to increase infrastructure spending. This is desirable, though it would have made even more sense if Republicans had supported such a programme in the midst of the Great Recession. But as noted by Lawrence Summers, former US Treasury secretary, the Trump plan relies mainly on private investment. Experience elsewhere suggests this often leads to exploitation of taxpayers and a failure to put into effect public investments that deliver high social benefits but have limited commercial returns.