Yesterday, the Wall Street Journal spilled the beans on its readers with a piece by Richard Rubin, High-Income Tax Avoidance Far Larger Than Thought, New Paper Estimates. Basically-- surprise, surprise-- "the top sliver of high-income Americans dodge significantly more in income taxes than the Internal Revenue Service’s methods had previously assumed... Overall, the paper estimates that the top 1% of households fail to report about 21% of their income, with 6 percentage points of that due to sophisticated strategies that random audits don’t detect. For the top 0.1%, unreported income may be nearly twice as large as conventional IRS methodologies would suggest." This avoidance was neither despite the Trump version of "law-and-order" or coincidental to Trump's view of the IRS. The avoidance was a feature of the way Trump wanted to IRS to function. But it can't be blamed solely on Trump; recall, "IRS audit rates and enforcement staffing have declined steadily for a decade amid budget cuts, some from across-the-government reductions and some focused on the IRS after the agency said it had given some conservative groups improper scrutiny."
How many trillions of dollars have been lost this way? Enough for the Green New Deal and implementing Medicare-for-All? Certainly. The Democrats get one more shot at a filibuster-proof reconciliation bill this year. I think it's supposed to be dedicated to infrastructure spending and jobs creation but many Democrats plan to try to put through lots of policies that would have no shot to get by McConnell's legislative filibuster machine. Writing for Politico last night, Sarah Ferris reported that "top House Democrats are eyeing ways to muscle through drug pricing and climate policy goals using the same arcane budget process that let the party bypass GOP votes for its pandemic aid bill. Sweeping immigration bills are also on the wishlist for many members, with Democrats eager to fit what they can in Biden’s next high-profile package-- which could be the party’s last shot at using the budget tool before the midterm elections... House Democrats are in discussions about including two of the caucus’ signature bills-- one, a drug pricing bill known as H.R. 3, and another a sweeping green infrastructure bill known as H.R. 2-- as part of the next reconciliation package, according to people familiar with their plans. Both would be enormous wins for Pelosi, whose caucus drafted the measures soon after retaking the majority in 2019."
Senior Democrats, however, acknowledge that such substantial legislation would be difficult-- if not impossible-- to get past the Senate parliamentarian, the chamber’s nonpartisan rules referee. They say health care and climate related bills are more likely to have a direct budget impact.
The Senate’s dense budget rules already forced the parliamentarian to nix one of the biggest pieces of Biden’s coronavirus aid package, a federal minimum wage hike. Still, [Budget Committee chair John] Yarmuth said he believes many different health care and climate bills could survive the budget rules, as well as some aspects of immigration policy: “Not everything, but I think certain things can.
Then there’s the problem of securing 218 votes: The more sprawling the package, the harder it becomes to lock down support across the caucus-- a tougher task generally given the Democrats’ razor-thin margin.
Democrats concede that another massive partisan package is far from the ideal option under a president who often boasts of his track record of working across the aisle. But many also foresee a struggle to reach an agreement with Republicans on the contours of the infrastructure plan, not to mention how to pay for it.
Pelosi and other Democrats have floated options like hiking the corporate tax rate or capital gains tax to pay for any infrastructure bill. GOP leaders have balked at both, while offering few of their own.
Underpinning House Democrats' push to pack the next reconciliation package with as many substantive elements as possible is their desire to make the most of the legislative powers they won in November. Many House Democrats are increasingly frustrated that their Senate counterparts haven't yet moved to eliminate their 60-vote threshold for most bills.
...Progressive Democrats, too, are putting together a long list of priorities they’d like to include in the next reconciliation bill, such as another push to raise the minimum wage. But this time, they say, Democrats shouldn’t accept another negative ruling from the Senate rules enforcer and miss out on a chance to give a raise to millions of the nation’s lowest-paid workers.
“Obviously, I have felt for some time that you can overrule the parliamentarian. So that wouldn’t be an issue for me,” Congressional Progressive Caucus Chair Pramila Jayapal (D-WA) said, adding that her caucus will continue pushing Senate Democrats to reform the filibuster and take up more House-passed bills.
“There just has to be" an overruling of the Senate parliamentarian, Jayapal added. "Otherwise we’re not going to be able to deliver our transformative pieces."
I asked some of the transformative candidates running for Congress this cycle about transformative legislation they most like to see included. First up, as usual, was northwest Washington progressive Jason Call-- running against a status quo Democratic incumbent-- who said, "I'm enthused that the House Democrats are willing to take advantage of the budget reconciliation option to pass legislation. Any opportunity to fully bypass the obstructionist Republicans should be used, given that Mitch McConnell has made it his mission to prevent any kind of assistance to the American people. To that end, the Senate should abolish the filibuster, and I'm again pleased to hear an increasing number of House Democrats speak out on it. If I had any single immediate issue that could be resolved here, it would be our failed healthcare system. The ACA relegates tens of millions to using GoFundMe to pay their bills or face bankruptcy. Every health outcome and economic analysis available shows that a single payer system is better than a for profit system. My family, my friends, my neighbors-- we are still dying. So while I'm happy that Democrats seem willing to use the budget reconciliation approach, the real story still remains what they won't do, rather than what they will do."
Virginia progressive Ally Dalsimer, also running against a status quo corporate Democratic incumbent, is as focused on Medicare-for-All as Jason Call is. "If House Democrats want to fulfill their promise to truly represent the people in this supermajority," she said, "while also making sure they don’t lose control of the House during the midterm, they must include Rep. Jayapal’s Medicare for All legislation within reconciliation. Not only is there precedent for healthcare policy to be put into a budgetary proposal, but 70% of Americans want universal single-payer healthcare. If there was one item that truly me the needs of the people, it’s this! Given the corporate interests aligned against passing this bill, it’s imperative that those who care use this process and push to pass M4A during this reconciliation. Realistically, it may have the best shot we’ll get any time in the near future since we only need 51 votes in the Senate to pass. Better yet, this would also put legislators on the hot seat and show us where they really stand on this policy. My opponent, for example, did not cosponsor Medicare for All last session or this, opting for the 'expand access' route which we all know still leaves millions uninsured and underinsured. By holding lawmakers’ feet to the fire by putting a reconciliation package that includes Medicare for All to a vote, we will have a real opportunity to show the American people which Representatives really stand for them, and which ones only care about their corporate donors."
Alexandra Hunt, a Philly progressive taking on another establishment Dem, has a different priority for her one choice: "Democrats need to keep their campaign trail promises and legislate like midterms are an accountability check, not an entitlement," she told me last night. "One bill that needs to be prioritized is the cancelling of student debt. 45 million borrowers in the United States are financially burdened by a whopping $1.71 trillion in student loan debt. Women make up two-thirds of debt holders and black women hold the highest amounts of student loan debt. This crisis is rooted in the 497% rise in college tuition since 1985-- twice the rate of inflation. Now more than ever we need to stimulate our economy by unburdening 45 million Americans from the crippling debt of pursuing higher education. We need to set future precedence for education equity with serious conversations about tuition-free public college."