Yet, the fact remains that in America, the richest 1% now own more wealth than the bottom 90% combined.
Corporate taxes also play a crucial role in economic inequality. While big businesses have long lobbied for lower tax rates, studies show that many Fortune 500 companies pay little to no federal income tax thanks to deductions, credits, and offshore tax havens. In 2017, the Trump administration’s Tax Cuts and Jobs Act slashed the corporate tax rate from 35% to 21%, promising job creation and economic growth. While stock markets surged, wages for most workers remained stagnant, and the federal deficit ballooned.
Payroll taxes, which fund Social Security and Medicare, hit lower and middle-income workers hardest. Unlike income taxes, which are progressive, payroll taxes are capped, meaning that a billionaire pays the same amount into Social Security as someone earning $160,000 a year. This regressive structure places an outsized burden on ordinary workers while leaving the ultra-rich largely unaffected.
Whether through tariffs or taxation, economic policies have historically shaped the financial realities of everyday Americans. Some policies, like Japan’s strategic tariffs or a well-structured wealth tax, can promote economic growth and fairness. Others, like Smoot-Hawley or regressive tax structures, only serve to widen the gap between the rich and the working class. As debates over taxation and trade continue, one thing is clear: the economic rules of the game determine who thrives and who struggles. And for much of American history, those rules have too often been written to benefit the few at the expense of the many.