A de facto "bipartisan" coalition of lock-step Republicans and conservative Democrats is united to block Biden's very modest plans to increase fairness in the tax system by making the ultra-wealthy pay a fairer share. This is why I seemed slightly celebratory about the prospects of a breakup of the 2-party system in the post earlier today. Do we really need a Republican-lite Democratic Party, with the Republican wing of the Democratic Party (New Dems, Problem Solvers, Blue Dogs) aligned against the working class along with the Republicans, and backed by the financial might of corporate America?
Last night, Politico published an essay by Ben White, Tax the rich? Executives predict Biden’s big plans will flop. Welcome to the real DC swamp: "Corporate executives and lobbyists say they are confident they can kill almost all of these tax hikes by pressuring moderate Democrats in the House and Senate." Obviously, no pressure need be applied to Republicans; it's who they are. It's also who the Democrats who Jennifer Rubin was urging disaffected Republican voters support in the midterms, Democraps like Abigail Spanberger (Blue Dog-VA), Mikie Sherrill (Blue Dog-NJ) and corporate whore Chris Coons of Delaware.
White wrote that "the business community" is dismissing the threat of Biden being able to fund his infrastructure and family policy agenda by taxing corporations and the super-rich. The conservative attitude is that he can either force the working and middle class to pay for it through regressive sales taxes, users fees and a VAT or he can shove the agenda up his ass.
Top corporate management and their lobbyists and trade associations (like the Chamber of Commerce) feel confident that they control enough corrupted right-wing Democrats that "while Democrats might be able to push through a slightly higher top corporate rate, when it comes to higher taxes on the rich, on capital gains, on financial transactions or private equity profits, forget it. It's not happening... If the executives are right, Biden will have to either break his pledge to pay for his massive spending agenda and further swell the deficit or he'll have to sharply scale back his plans. And slashing them in any significant way would anger the progressive wing of his party, which sees this as the president's only chance to fundamentally tilt the economy back toward workers and make it more equitable."
White names some of the culprits, all reactionaries well know to DWT readers:
Joe Manchin (WV)
Kyrsten Sinema (AZ)
John Frackenlooper (CO)
Josh Gottheimer (Blue Dog-NJ)
Stephanie Murphy (Blue Dog-FL)
Murphy is an especially interesting case that points to the terminal sickness that makes the Democratic Party so dysfunctional and so powerless to stop this kind of interference from Big Business. Murphy is a clueless chair of the Blue Dogs with a shitty voting record and nothing to recommend her on any level. Yet, she is Schumer's #1 pick-- just as Sinema was 4 years ago in Arizona-- for the Florida Senate seat in 2022. There are two problems with that pick:
1- no one will vote for her except any-blue-will-do Democratic partisans-- which is never enough to elect anyone statewide in Florida, as Democrats should have learned by now.
2- if old photos of Rubio having sex with older gentlemen in Alice C. Wainwright Park exist and wind up surfacing and he somehow manages to lose to Murphy, she would be as terrible a senator as she is a congresswoman-- exactly like Sinema. EXACTLY LIKE SINEMA! Is that what Schumer actually wants? Apparently so.
Meanwhile, White reported that the lobbyists he's spoken with "say most of the members they've spoken to have indicated a willingness to push back against many of the proposed tax increases in Biden’s plan." Referring to Joe Manchin as "they," he wrote that "“They are mostly willing to go with a 25 percent corporate tax, and the odds of that getting through reconciliation are pretty solid,” said the head of one of the most powerful lobbying groups in Washington, referring to the parliamentary maneuver that would require a simple majority vote on the legislation. 'Where it gets murky for them is when you talk about a carbon tax or a gas tax or a financial transactions tax or higher carried interest or capital gains taxes. That’s where the coalition of the willing falls through.'"
Lobbyists and executives say they expect Biden to cut a smaller infrastructure deal and perhaps get through some of his families agenda, which includes expanding free public education and assistance for child care. But they don’t believe that the White House will be able to move significant tax hikes through the House or the Senate.
“It’s going to be very tough on them to do anything on the personal side,” said a senior Washington lobbyist who works on tax issues. “It’s not impossible, but even that’s a struggle. Moderates in the House make it much more difficult to pass this stuff. I think the personal side probably gets left alone. And most of the rest of it has no chance.” Among other measures, Biden has proposed raising the top marginal tax rate on individuals to 39.6 percent from 37 percent now.
The White House and progressive groups reject all of this, saying that boosting taxes on corporations and the wealthy is necessary to make long-term economic investments. And they note that such tax hikes-- including raising the capital gains rate and returning private equity taxes to the regular income rate-- are politically popular.
They also say that much of what Biden aims to do will take place over a decade and that the tax hikes will do nothing to slow economic growth or boost inflation.
“A lot of people are thinking about this the wrong way,” said a person close to the administration, who also didn’t want to be identified because he's not authorized to speak publicly about Biden’s plans. “The spending is over a long time frame and most of the taxes we are talking about would just return some fairness to the code and make those who are able to pay more to pay more. And we are talking about increasing long-term productivity and addressing a lot of structural problems in the economy.”
...“I’ve been through a lot of the tax hike efforts, but now is a tough time for [Democrats] to get a lot of them done,” said a former Democratic operative now working in a senior role on Wall Street. “The economy is clearly coming back, but it would be a weird time to slap more taxes on people.”
Democrats sympathetic to Biden’s proposal and in favor of his tax plans argue that the economy is set to roar back, making it the ideal time to increase some tax rates on investment gains and corporate profits.
“There are real challenges to selling the ‘Build Back Better’ agenda to moderates on both sides,” said Jason Furman, a Harvard professor who chaired the Council of Economic Advisers under President Barack Obama. “But I don’t think a strong economy should really affect the case. In fact, if anything it’s an argument that we can move from a short-run focus on Covid recovery to a much longer-run focus on improving the economy.”
But lobbyists believe that the combination of inflation fears and an economy that is showing signs of booming but remains vulnerable will leave them plenty of room to kill most of Biden’s proposed tax increases.
“It really all depends on how far they go,” said a senior financial services industry lobbyist. “[Biden’s] advisers will at some point say that they can get something that is kind of down the middle of the fairway with a corporate rate hike. Anything else and Democrats are just going to get killed over it.”
What can you do? Help defeat the kind of Democrats who serve the interests of Big Business and replace them with grassroots progressives like Jason Call in northwest Washington, Jessica Mason in Dallas, Ally Dalsimer in northeast Virginia and Shervin Aazami in the san Fernando Valley. Jason Call, earlier this morning: "WA-02 corporate incumbent Rick Larsen has one of the most conservative voting records of all House Democrats, and as we have scoured the amendment votes over his twenty years in office we’ve found that he either votes with the New Democrats or the Republicans. So if the New Dems are going to oppose some of these measures we definitely won’t find Larsen breaking ranks. We’re talking about a Rep who has taken Koch money, who is primarily funded by corporate PACs, and who has voted ignominiously to repeal the estate tax. Larsen’s history routinely shows industry money coming in to his coffers as rewards for votes. There’s absolutely nothing in his career that indicates he’ll fight for (or even vote for) tax fairness or anything that impacts the profits of his donors."
Ally Dalsimer is on the same page as Jason. "The problem we continue to have," she told us this morning, "is that Democrats are told that if we just get rid of the Republicans, everything will be better. We’re told that conservative Dems are 'necessary' to keeping power and we should not criticize them, no matter how often they stand against our interests. Yet this strategy has proven time and time again that it leads only to incremental progress and a subsequent Red Wave the next election year. Democrats who team up with the Republican Party to block legislation that helps working people cannot continue to be treated as allies when their actions demonstrate they aren’t. Instead of protecting us from Republican-backed policies that hurt the average American, they instead act as Republicans with a 'D' next to their name. It’s a similar situation with Democrats who say they support the people of their districts, but in fact support corporate interests. In my district, the Democratic Party has dominated local and regional politics since 2008. Despite that, our Representative does not support Universal Healthcare, Childcare for Working Families, the Schedules that Work Acts, and other policies that would directly benefit his constituents. so it’s not just the ultra conservative Dem but also the 'moderate' Dem who is hurting the party. There is no reason that a district that has been safely Blue for over a decade, a district that has rejected conservatism time and time again, should be represented by incremental and corporate ideology in Congress.
We were also able tp reach Shervin Aazami who pointed out that "It’s ludicrous that anyone even refers to Biden’s corporate tax rate plan as an 'increase.' It doesn’t even restore it to the rate it was before Trump and Republicans took an axe to it in 2017. And to call a 10-year $2.25 trillion infrastructure package 'massive' is stupefyingly misguided, considering it amounts to $225 billion per year-- less than a third of what we spend annually on the military. And now even that is subject to negotiation with Republicans that will never vote for the infrastructure package anyway. When the GOP controlled the gavel, they didn’t care one scintilla about negotiating with Democrats. They gave their giant bailout to the top 1% and celebrated it to high heaven. And now Biden wants to negotiate with conservative Democrats that are just as corporatist as the Republicans. Who loses? Working Americans. The countless families on the verge of eviction and homelessness. The millions of families living with food insecurity and lack of healthcare. It’s asinine and unbecoming of a nation that is still roiling from the worst public health disaster in a century. Corporate Democrats like my opponent, Brad Sherman, are financed to remain silent during times like this. Brad’s biggest donors are from Wall Street-- from Blackstone and BlackRock to Charles Schwab to Capitol One. None of these donors want to see their tax rates go up. So even though Brad represents a D+18 district that Bernie Sanders won during the presidential primary, he won’t lift a finger to push back against Biden’s capitulation to Republicans and the corporate wing of the Democratic Party because it will hurt the $2.6 million war chest he’s amassed from Wall Street firms and weapons manufacturers."