Tag: wealth tax
Proposed Tax On ‘Ultra-Millonaires’ Could Raise Trillions In Revenue

Proposed Tax On ‘Ultra-Millonaires’ Could Raise Trillions In Revenue

Reprinted with permission from American Independent

Three congressional Democrats unveiled a plan Monday to raise $3 trillion in new revenue over the next decade. By taxing only those worth more than $50 million, the proposal would not raise taxes on 99.95 percent of Americans.

Sen. Elizabeth Warren of Massachusetts, Rep. Pramila Jayapal of Washington, and Rep. Brendan Boyle of Pennsylvania introduced the Ultra-Millionaire Tax Act of 2021, which would establish a two percent annual tax on the net worth of those taxable assets of $50 million to $1 billion. Those worth more than $1 billion would pay a three percent annual tax.

"The hyper concentration of wealth among a tiny number of multimillionaires and billionaires is a crisis for American capitalism and the American Dream," Boyle said in a press release. "Wealth inequality is at its highest level since the Gilded Age. The wealth share of the richest 0.1 percent has nearly tripled since the late 1970s. It is time for the ultra-millionaires to pay their fair share so that critical government programs can be bolstered to help the everyday American."

The sponsors circulated an analysis by University of California, Berkeley, economics professors Emmanuel Saez and Gabriel Zucman that predicted the wealth tax would affect only 100,000 families and would raise $3 trillion in new federal revenue between 2023 and 2032.

The proposal comes as Republicans in Congress are making a big deal about the growing national debt they helped rack up and using the budget deficit as an excuse to oppose President Joe Biden's priorities, such as COVID-19 relief.

"For too long, Congress has maxed out America's credit card with no plan to pay off our debts. The disastrous impacts of this reckless spending and growing debt, like high inflation, will hurt low and fixed income families the most. We must do better," tweeted Florida Sen. Rick Scott on February 16.

"Eventually USA $28 Trillion debt bill becomes due," warned Rep. Mo Brooks of Alabama on Thursday. "Friday #Socialist #Democrat debt junkies to borrow & spend ANOTHER $2 Trillion."

This wealth tax could either offset some of those previous expenses or enable new spending without increasing the debt.

According to the Saez-Zucman analysis, the richest Americans would be asked to pay about 4.3 percent of their wealth each year on average, compared to an estimated 3.2 percemt in 2019.

A Data for Progress poll, taken in 11 states between July and September 2020, found widespread public support for the idea of a two percent wealth tax on those with a $50 million-plus net worth.

Among all voters surveyed, 62 percent preferred adopting the idea, compared to 26 percent who preferred the current system. Even in the deep-red state of Mississippi, voters preferred the wealth tax 55 percent to 30 percent.

The proposal comes as Republicans are trying to change their image as the party looking out for the very rich.

"The uniqueness of this party today is we're the workers' party, we're the American workers' party," claimed House Minority Leader Kevin McCarthy in a Feb. 8 Punchbowl News interview.

Sen. Ted Cruz of Texas tweeted Friday, "The Republican Party is not just the party of country clubs, the Republican Party is the party of steel workers, construction workers, pipeline workers, police officers, firefighters, waiters and waitresses." He also tweeted Friday, "The Republican Party is not the party of the country clubs, it's the party of hardworking, blue-collar men and women."

Still, not a single Republican lawmaker has co-sponsored the Ultra-Millionaire Tax Act so far.

In addition to the three lead sponsors, it is co-sponsored by Sens. Bernie Sanders (I-VT), Sheldon Whitehouse (D-RI), Jeff Merkley (D-OR), Kirsten Gillibrand (D-NY), Brian Schatz (D-HI), Ed Markey (D-MA), and Mazie Hirono (D-HI).

Published with permission of The American Independent Foundation.

Can America Afford To Underwrite Universal Child Care?

Can America Afford To Underwrite Universal Child Care?

Reprinted with permission from The American Prospect.

When Senator Elizabeth Warren issued a bold plan for universal child care last week, the question some people asked was the usual one: How will she pay for it? Warren has a good answer to that question, which I’ll come to. But there’s a second question that is actually more difficult: How will child care get the necessary public and media attention to make it a top priority?

In 2016, Hillary Clinton issued a proposal for universal access to child care that was similar to Warren’s, though not as extensive. Clinton called for federal subsidies to cap child care costs at 10 percent of family income, whereas Warren proposes to cap those costs at 7 percent. Like Warren today, Clinton wanted to build on existing locally run programs such as Head Start to make child care affordable for all families. And like Warren, Clinton also framed the program as serving the purposes of both economic growth and family well-being, as Katie Hamm and Sarah Jane Glynn of the Center for American Progress explained in a fall 2016 American Prospect article, “Putting Family Policy on the Governing Agenda.”

Some people writing this week about Warren’s proposal seem to have forgotten or to be unaware that the last Democratic presidential candidate wanted to move in the same direction. But if you never heard about that Clinton child-care proposal, it’s hardly your fault. Media coverage of all substantive policy issues was astonishingly limited in the 2016 presidential race. In a study in the Columbia Journalism Review, Duncan J. Watts and David M. Rothschild found that in just the six days after FBI Director James Comey announced the reopening of the agency’s email inquiry, The New York Times published as many cover stories about Clinton’s emails as it had published about all policy issues combined in the two months before the election.

The analog to coverage of Clinton’s emails may be coverage about Warren’s Native American ancestry. Still, the chances may be better this time for putting work-family issues at the center of public debate. The midterms saw an upsurge of political activism among women and a record number of women elected to Congress, and the race for the Democratic presidential nomination has not just one woman in the running but at least four who are in the top tier of candidates.

That’s not to say child care is exclusively a “women’s issue,” just that women in the public arena are more likely to make an issue of it. The changes in gender politics over the past several years could help elevate child care to the prominence it deserves. Let all the candidates, not just Warren, come up with proposals and debate child care the way Democratic candidates in recent elections have debated health-care reform.

Back to the financing: In a column on paying for a progressive agenda, Paul Krugman makes a useful distinction among three types of expenditures: investments that can be paid for through borrowing because they generate an economic return; benefit enhancements that can be paid for through higher taxes on the rich; and major system overhauls that involve such drastic changes in taxes and social arrangements that Democrats would be wise to put them off.

As an example of a major system overall, Krugman points to pure Medicare for All proposals that would replace employer-sponsored coverage with tax-financed public insurance. As he says in an understatement, that would be “a much heavier political lift” than the other two types of expenditures: “You don’t have to be a neoliberal tool to wonder whether major system overhaul should be part of the Democratic platform right now.”

That’s exactly my view of Medicare for All proposals, but that is not tantamount to saying Democrats should refrain from ambitious ideas. On the contrary, those other ambitious ideas—like universal child care—wouldn’t have a chance if Medicare for All, with its staggering fiscal demands, dominates Democratic priorities. As Krugman argues, Democrats have options that are both good policy and good politics for financing both big investments (such as many of the Green New Deal ideas) and benefit enhancements (such as universal child care). Those are the ideas that should be at the top of their agenda for 2020.

Warren calls for financing her Universal Child Care and Early Learning Act with the proceeds from the wealth tax that she proposed earlier—a tax of 2 percent on net worth for people with more than $50 million in assets and an additional 1 percent for those with more than $1 billion in assets. Public opinion surveys have shown strong support for the general idea of higher taxes on the rich and in particular for Warren’s wealth tax. I have some concerns about the wealth tax because of its vulnerability to a challenge in the Supreme Court, given the Court’s current right-wing majority. But I believe its aims could be achieved through changes in the income and estate taxes, where the legal foundations are firm.

In an economic analysis of Warren’s proposal, Mark Zandi and Sophia Koropeckyj of Moody’s Analytics find that the wealth tax would more than cover the cost of the child care plan, which they put at $70 billion annually, when taking into account its first-order economic effects in stimulating consumer spending and increasing labor participation. There are also longer-term benefits from improvements in early childhood learning; to use Krugman’s categories, the child-care proposal is both an investment and a benefit enhancement.

Of course, there’s a lot more that would need to be done to resolve the problems in child care. Warren’s proposal aims to improve the pay of child-care workers and the quality of child-care services, but it would take time and government involvement to build out the capacity to provide that high-quality care on a fully universal basis. An alternative approach presented last week by Matt Breunig calls for more direct government involvement on the supply side and free access to child care (under Warren’s proposal only families with incomes below twice the poverty level would get child care at no charge). Curiously enough, coming from the left, Breunig also criticizes Warren’s proposal for not including payments to parents who care for their children at home and for lacking adequate cost controls (and he may well be right about that).

These are exactly the kind of questions that ought to be front and center in the national debate on child care policy as the 2020 campaign unfolds. It’s time American politics gave young families the attention and help with child-care costs they need. This baby is long overdue.

At Last, Democrats Have Broken The Taboo On Raising Taxes

At Last, Democrats Have Broken The Taboo On Raising Taxes

Class Warfare? Most Americans Support Higher Taxes For The Rich

Before the GOP presidential hopefuls take the stage for tonight’s debate and prepare to decry Obama’s “class warfare,” they might want to mull over the fact that most people — including 53 percent of Republicans — support higher taxes for the wealthiest Americans. Even so, not a single politician participating in the debate has backed a tax increase on households with more than $250,000 in annual income. Despite outrage by Republican politicians at the mere suggestion of more taxes for the rich, a new poll reveals that most people think it’s not such a bad idea:

More than two-thirds of Americans, including a majority of Republicans, say wealthier people should pay more in taxes to bring down the budget deficit, and even larger numbers think Medicare and Social Security benefits should be left alone.

That sentiment on taxes is at odds with the Republican presidential candidates, who will meet tonight in a Bloomberg- Washington Post-sponsored debate focused on economic issues.

More than 8 out of 10 Americans say the middle class will have to make financial sacrifices to cut the federal deficit even as the public just as strongly opposes higher taxes on middle-income families, according to a Bloomberg-Washington Post national poll conducted Oct. 6-9.