I prefer readers read my most previous articles, May, April 2025 and December 2024. But since we are facing an ugly proposal of tax cuts for the wealthy, I'm posting this "letter to the editor" that the Mariposa Gazette published on June 5, 2025. It's short. The better choice is to read the most previous articles (postings) and get a broader understanding of the entire economy: the inequality of income and wealth distribution, the extent of poverty and hardship affecting at least 40% of U.S. citizens, and the solutions available -- (the December 2024 essay) most importantly a method to force the largest corporations to pay much higher wages). Start at the "solutions available" essay.
Mariposa Gazette, letter to editor, May 31, 2025,
Why the Trump/GOP Tax Cuts Make No Sense
It’s well known among economists that the tax cuts for the wealthy make no sense. Since 1973 the average yearly income of the nonsupervisory worker, commonly known as the “employee”, and involving 80% of all who work in the U.S., the average income for this worker was higher in 1973 than in 2025. So, think about it. The average wage income for 80% of U.S. workers was higher 52 years ago.
Eighty percent of workers had no income gains, the per capita economy expands by 151% -- who do you think reaped the benefit? Therefore, what sense does it make to cut taxes for the very wealthy whose incomes have exploded, which is essentially what the Trump tax cuts are all about. These are all documented facts, by the way.
The next graph shows the growth of households' incomes, the top line is the top 1% of households whose incomes increased from $795,200 in 1976 to $2,800,000 in Feb. 2023, increasing by a multiple of 3.5. or 252%. (From RealTime Inequality, Household Income, Factor Income, Real Income Growth).
To the majority of working America the cuts simply hand more power to the wealthy few. Many economists call our era the “New Gilded Age”, the age of new robber barons. These economists have it right. Here’s a quote from a study (page 12) with that title:
"The average inflation-adjusted income of the bottom 99 percent of families grew by 100.1 percent between 1945 and 1973. Over the same period, the average income of the top 1 percent of families grew by 34.3 percent. Faster income growth for the bottom 99 percent of families meant that the top 1 percent captured just 4.9 percent of all income growth over the period. (Data are shown in Appendix Table B7.)
The pattern in the distribution of income growth reversed itself from 1973 to 2007 as the income of the bottom 99 percent of families grew much more slowly (by just 15.4 percent) compared with the top 1 percent, whose average income grew by 216.4 percent. As a result, over half (58.7 percent) of all income growth in this period landed in the hands of the top 1 percent of families. (Data are shown in Appendix Table B8.)" (See “The New Gilded Age” by E. Sommeiller and Mark Price, EPI.org, p.12)
My next quote comes from David Madland in a 2016 article published at the Center for American Progress:
“Wages for the typical private-sector worker, adjusted for inflation, are still about where they were in the 1970s, even as the costs of core middle-class goods such as housing, healthcare, child care, and higher education have grown rapidly. Economic output per person has nearly doubled over the past four decades, but the vast majority of these gains have gone to those at the very top.” (see “A Path Forward for the Middle Class and the Country”, Nov 6, 2016)
From the Institute for Taxation and Economic Policy, “Roughly 68% of the tax cuts go to the richest 20% in the U.S. . . . For working-class Americans, the tax cuts in the House bill are extremely modest, and overall taxes would rise for these families when the impact of tariffs are accounted for.” (See “Federal Tax Debate 2025” at ITEP.org)
How did the highest earning 20% do over the past 40 years or so? They did better by far than any other sector of the population. The Congressional Budget Office published the report “Trends in the Distribution of Income After Transfers and Taxes, 1979 to 2018", and it shows that the highest earning 20% increased their post-tax and post-transfer income by $132,800, from $111.1K to $243.9K over 39 years. Their pre-tax income grew by $169,400, from $152,3000 to $321,700.
The lower 20% increased their post-tax post-transfer income by $18,000, from $19,700 to $37,700. 1979 to 2018, pre-tax pre-transfer income grew $6,400, or 40%, from $16,100 to $22,500. To be noted: the post-tax income in 1979 was $3,600 higher than the pre-tax income; and in 2018 post-tax income was $15,200 higher than pre-tax income. This demonstrates the growth of social benefit programs aiding the lower-income group. The middle 60% income group increased their post tax post transfer incomes by $25,600. 1979 to 2018, pre-tax pre-transfer income grew $21,800, or 37%, from $59,000 to $80,800. The top 20% increased their post-tax post-transfer income by $132,800 1979 to 2018, pre-tax pre-transfer income grew by $169,400, or 111%, from $152,300 to $321,700. Just looking at pre-tax pre-transfer we see this reality: The top 20% has about 14 times more income than the lower 20%; and it has about 4 times more the income of the middle 60%. Taxes and social transfers reduce this enormous inequality; the top 20% has about 6.5 times more income than the lower 20%; and about 3.3 times more income than the middle 60%.
The average income of all households in the lower four quintiles (below 80%) would be $22,710 higher in 2025 if we had the income distribution of 1979. I went to "Data Underlying Exhibits", searched Exhibit 6 and found that a 9.6% of total income shifted from the lower 80% of households to the top 20%. That equates to $22,710 income loss among all households in the lower 80%. I did the same calculation at RealTime Inequality, (see share of total income, factor income, households) and found a 15.4% shift of income between 1976 and 2023, which equates to a loss of $33,000 of income for all households earning less than $200,000 per year, the lower 90%. The economy has shifted its distribution seriously to create dysfunction and perhapscatastrophe if it continues shifting income away from the lower-earners.
Inequality writ large. This is unsustainable. Maybe Mexico can exist this way, but the U.S. economy could easily crash and become like Mexico.
The harm that the tax cuts will do is well documented at CBPP.org and CAP.org and EPI.org. Therefore, if you wish to damage the U.S. population, then support the tax cuts; otherwise, you can call or write a letter to the President and his team in Congress.
Ben Leet, resident of Mariposa Economics Without Greed, Part Two ____________________________________________________________________________________
Short is beautiful. I encourage the reader to read these 3 articles: From CBPP -- Take your choice among essays describing cuts in food aid, healthcare subsidies, cuts to rural communities, etc. -- all the victims of this ugly tax cut bill. The article by Nick Gwyn proposes 8 improvements to raise incomes of low income workers.
From CAP.org -- a frightening article about rising costs due to the cuts in programs, a brief quote: "A 60-year-old couple making $85,000 per year who hope to stay on their same marketplace plan would see their annual premium costs skyrocket by $15,400, from about $6,900 to about $22,300.
From EPI.org -- To quote: "Under this legislation, the bottom 40% of households would lose income and resources while the top 1% of households—those making nearly $800,000 a year—would gain enormously."
