Taxes generate income for governments, enabling them to do what the private sector cannot: meet shared needs, protect the public, and invest for the long term.
Following the Great Depression and World War II, corporate elites recognized that strong labor unions, rising wages, and broadly shared prosperity helped save capitalism from itself. They accepted that government had to restrain monopolies, prevent extreme concentrations of wealth, and ensure ordinary people had enough income to keep the economy growing.
During the late 1960s and 1970s, consumer advocates, watchdog journalists, and public-interest lawyers won major reforms. New agencies regulated auto safety, food and drugs, nuclear power, pensions, and more. These protections improved millions of lives.
But this strategy relied too heavily on expert-driven, top-down regulation. It lacked durable mass participation. Even when regulations worked, many people did not feel they owned them or had a voice in shaping them.
Corporations responded aggressively. They captured regulatory agencies, buried enforcement in endless lawsuits, funded anti-regulatory propaganda, and turned courts into tools of deregulation. They told the public, “You’re being managed by bureaucrats.” Because regulation was not deeply rooted in labor organizing, civil-rights struggles, and community-based power, it became isolated and vulnerable.
Anti-government opponents exploited this weakness. They divided constituencies (“jobs versus regulation,” “freedom versus rules”), attacked agencies as “unelected bureaucrats,” framed regulation as elitist control, hollowed out enforcement through the courts, and turned legitimate democratic concerns into anti-democratic outcomes. In short, they weaponized the absence of bottom-up ownership.
This shift helped usher in neoliberalism, austerity economics, and the “Washington Consensus.” Global corporations used their lobbying power to deregulate markets, lower trade barriers, cut taxes, privatize public services, and weaken labor protections across the world.
Neoliberal doctrine holds that any restriction on economic freedom necessarily limits political liberty — and that social life itself should be subordinate to the market.
The results have been clear. Unions were weakened. Governments retreated from social responsibilities. Inequality surged. The wealthy pay lower effective tax rates, even in rich nations. And in the United States, the Supreme Court has steadily weakened the authority of independent regulatory agencies created by Congress.
At the same time, offshore tax havens and financial secrecy allow capital to escape democratic accountability. These jurisdictions now hold roughly 10 percent of global GDP, draining billions of dollars from public budgets each year.
Neoliberal advocates promised that lower taxes and deregulation would boost growth and eventually increase public revenue. Critics called this “trickle-down” or “voodoo economics.” The promised benefits never arrived.
Today, the failures of neoliberalism are widely felt. Economic insecurity has grown. Anger and distrust have spread. This discontent has fueled economic populism across the world — from Trumpism in the United States to the collapse of long-standing governments elsewhere.
In this climate of insecurity, disputes over opportunity have increasingly been framed as culture-war battles over racism — including claims that unfair discrimination has excluded white men. At the same time, bias against women, people of color, and other groups in hiring and promotion remains widespread, often operating unconsciously. Addressing these inequities requires deliberate corrective efforts.
In response, many institutions redefined merit and legitimacy. They began treating qualities such as perspective, representation, and cultural competency as job-relevant. As a result, some white men were not hired for positions they likely would have received under earlier definitions of qualification. The costs of these shifts fell unevenly on younger applicants, while older leadership and entrenched elites remained largely insulated — deepening resentment among those with the least power.
Crucially, these changes were implemented through largely top-down and opaque processes. Without transparency, shared decision-making, or a renewed social contract that created new paths to dignity and security, the changes bred mistrust — not because diversity is wrong, but because rules changed without voice or honesty. Many people were told to simply accept the new reality, work harder, and climb whatever ladders remained.
Initiative and effort do matter. But ambition should not be reduced to a relentless race for status and upward mobility at any cost. When dignity and voice are scarce, people chase rank. When people have real agency, ambition broadens.
In the midst of this turmoil, culture-war battles rage over “globalism,” “woke corporations,” and national identity. Protectionists and ethno-nationalists offer simple answers to complex problems, while leaving deeper power structures untouched.
Meanwhile, inside many workplaces, democracy stops at the door. Employers often act like dictators — controlling speech, appearance, behavior, and even off-duty life. Workers can be fired for political views, personal choices, or activities unrelated to their jobs.
A more democratic economy would move beyond the false choice between unfettered capitalism and state socialism. The starting point must be moral: a commitment to the public good and to human dignity.
This approach affirms a mixed economy — balancing public and private roles — and rejects both free-market fundamentalism and rigid state control, each of which reduces human life to economics alone.
Paths Toward a More Democratic Economy
Strengthening unions
Laws could make it easier for workers to organize, support sector-wide bargaining, and reduce incentives for businesses to fight unions at all costs.
Democratic governance within economic institutions
Expanding worker voice, shared decision-making, and transparency inside workplaces, professional institutions, and public agencies would reduce zero-sum status competition and rebuild trust. When people have real participation in shaping rules, criteria, and priorities, ambition shifts from chasing rank toward contributing useful work, building stable lives, and strengthening communities.
Employee ownership
Worker-owned enterprises are often more stable, productive, and rooted in their communities than investor-owned firms. With technical support and long-term, low-interest loans, governments could expand cooperatives and family farms — strengthening local and rural economies.
Public banks
City- and state-owned banks could invest in projects driven by public need rather than short-term profit. In 2023, the Los Angeles City Council funded a feasibility study for a Los Angeles Public Bank.
Public benefit corporations
With targeted tax incentives, governments can encourage businesses whose charters require them to serve workers, customers, communities, and the environment — not just shareholders.
Discouraging tax avoidance
In 2023, the UN Secretary-General proposed a new international framework for tax cooperation to curb the global “race to the bottom” and rein in tax havens.
The care economy
Shifting toward a care-centered economy would better value teachers, childcare workers, caregivers, health aides, and recovery counselors. Meeting real caregiving needs could create millions of meaningful public-service jobs.
One key lever is fair taxation. Today, the top 1 percent pay about 26 percent of their income in federal taxes. A higher rate — even one that still leaves them extraordinarily wealthy — could fund millions of well-paid jobs. Those workers would spend money, create demand, strengthen communities, and generate revenue at every level of government.
The bottom line is simple: with a thoughtful mix of public and private action, society has more than enough resources to guarantee economic security — the ability for everyone to live a decent, dignified life.
And with deeper democratic participation — more worker voice, more local control, more shared ownership of economic rules — regulatory systems could gain legitimacy, resilience, and real public defense.
We could govern the economy together.