Trump 2.0 an uncertain future
Editor,
Apropos of the editorial “Trump back in the saddle” (ST January 20, 2025) according to Newsweek and The Hill (an American news portal that covers Congress, politics, political campaign and Capitol Hill, a top US political website, read by the White House and more lawmakers than any other site) the relationship between political parties and socio-economic groups can be complex. Historically, the Republican Party has been associated with policies that favour lower taxes and fewer regulations, which have often appealed to wealthier individuals and businesses. However, recent trends show a shift, with wealthier Americans increasingly supporting the Democratic Party (Newsweek). This shift has led to a realignment of party dynamics, with Democrats gaining more support from affluent voters while Republicans appeal to a broader base, including working-class voters.
Hence while the Republican Party has traditionally been seen as the party of the rich and elite, this perception is evolving. Politics is always changing, and the lines between party support and socio-economic status are becoming more blurred. The editorial is right that the American President often aligns with their party’s policies, but they also have significant autonomy in decision-making. While party leadership and platforms provide a framework, the President can shape and implement policies based on their vision and priorities. This dynamic allows for a balance between party influence and presidential discretion. For example, a President might push for specific legislation that aligns with their party’s goals, but they also have the power to issue executive orders and make decisions on foreign policy, national security, and other critical areas. It’s a complex interplay between party loyalty and individual leadership.
In the United States of America wars are fought by both the Republican and Democrat presidency. Take for instance the American Civil War (1861-1865), Spanish-American War (1898), Gulf War (1990-1991), War in Afghanistan (2001 to present), Iraq War (2003-2011) and War on Terror (2001 to present) were started during the Republican presidency. War of 1812 (1812-15), Mexican-American War (1846-48), World War I (1914-18) under the presidency of Woodrow Wilson, World War II (1939-1945) under the presidency of Franklin D Roosevelt, the Korean War (1950-53), Vietnam War (1955-75) under the presidency of Lyndon B Johnson. These are the wars under the Democrat presidency.
Donald Trump’s first term was marked by a mix of high-profile actions and controversies, but some argue that the results didn’t always match his rhetoric. His second term, however, is shaping up to be quite different. Trump has promised a flurry of executive orders and bold actions right from the start. Expect significant moves on immigration where Trump plans to launch the largest mass deportation program in history, end birthright citizenship, and reinstate the “remain in Mexico” policy. He aims to extend his 2017 tax overhaul, lowering the corporate tax rate to 15% and rolling back income tax increases on the wealthiest Americans. Trump proposes eliminating the Department of Education, pulling federal funding from schools promoting critical race theory, and taking control of accreditation processes for higher education. He advocates for tariffs of 10% to 20% on foreign goods and plans to block Chinese buyers from purchasing vital U.S. infrastructure. He is preparing to sign over 100 executive orders on topics ranging from border security to energy development and reducing living costs for American families.
It is hard to predict exactly how Trump 2.0 would be. He’s also planning to impose hefty tariffs on imports and roll back many of Biden-era policies. His approach is likely to be more aggressive and disruptive, aiming to fulfil his campaign promises quickly. It seems like the Trump 2.0 presidency will unfold that could have significant impacts on various fronts. He has promised sweeping actions on immigration, trade and taxes which could lead to major changes both domestically and internationally. His approach to foreign policy, particularly with regard to Ukraine and North Atlantic Treaty Organisation (NATO), could have profound implications. So, while it might not take “the world by storm” in the traditional sense, it will certainly be a presidency to watch closely.
Yours etc;
VK Lyngdoh
Via email
India needs to tax the super-rich
Editor,
All talk of merit takes a back seat when a person inherits huge properties from his parents and that too without paying any tax in India. Merit should take a back seat for the sake of ensuring social justice and for equitable representation in government both for elected and selected personnel like caste reservation in government jobs and state and caste quota for Members of Parliament. This because it is a positive discrimination for a just society. But a tax free inheritance of a huge property not only negates merit but also snowballs into inequality by giving an unchecked fillip to the concentration of wealth, thereby creating an unjust society.
Eminent economist Prabhat Patnaik rightly said, “The argument of the defenders of capitalism cannot possibly justify income through inheritance; on the contrary, earning an income through inheritance negates their argument that profits are a reward for some special quality.”
Thomas Piketty has aptly called progressive inheritance taxes the “second major fiscal innovation of the twentieth century” after progressive income taxes. Inheritance tax is 55 per cent in Japan, 50 per cent in South Korea, 45 per cent in France, 40 per cent in the USA and the UK, 34 per cent in Spain, 33 per cent in Ireland, and 30 per cent in Belgium and Germany. Those countries spend the money to ensure that every citizen gets quality health care and quality education. But when a suggestion was made to introduce inheritance tax in India, the top leaders of the ruling party at the Centre vehemently opposed it.
It is unfortunate that the ideas of socialism and left ideology have been branded as dangerous whereas crony capitalism is nothing but turning the promise given to the majority of the electorate into a jumla. Also, serving the interests of a handful of billionaires means doing a disservice to the labour intensive MSMEs.
Rising inequality is the most pressing problem in India today. French economist, Thomas Piketty and others observed, “The Billionaire Raj headed by India’s modern bourgeoisie is now more unequal than the British Raj headed by the colonialist forces.” Remedial measures need to be taken without delay. Ironically, even a discussion on wealth distribution to cure inequality has become a dreaded topic.
All modern welfare states, including the United States of America, have accepted the ideas of socialism in their policy of giving social security to the people, like health care and handsome allowance for the unemployed. A welfare state is more inclined to socialism than far right capitalism. A research study published by the IMF in June 2015 debunked the theory of trickle-down economics. As per the report, annual growth decreases by 0.1% within 5 years when there is a 1% rise in the income of the wealthiest 20%. But annual growth increases by 0.4% within 5 years when there is a 1% rise in the income of the poorest 20%. It reiterated the dangers of capitalism without effective state intervention.
Trickle-down cannot happen automatically in an economy. Poor children died young after working as chimney sweepers in capitalist countries before the emergence of welfare states. Modern welfare states realised that the trickle-down effects are not feasible without state intervention. Now, the welfare states have created channels through which some money can trickle-down. Income tax, super tax for the super-rich, and inheritance tax are examples of such channels.
India needs to ensure that super taxes for the super-rich and inheritance tax trickles down through the state machinery to the bottom to address the rising inequality. It would make a mega-wedding look not so glaringly ugly amid hunger and almost zero access to quality education and health care for the majority of the population.
Yours etc.,
Sujit De,
Kolkata