"The biggest expansion of the federal government in a generation," wrote Dan Balz, "is underway, a pandemic-inspired shift in resources and responsibilities that will challenge President Biden and the Democrats to demonstrate that they can make government work," something Republicans have basically given up on decades ago. Between Trump and just 3 months of Biden, Congresspeople has authorized about $3 trillion in spending on "softening the blows of the coronavirus pandemic on individuals and stimulating an economy that suffered major blows as the pandemic took hold." And now, Biden is about to ask for another $3 trillion to rebuild seriously neglected infrastucture and create 21st Century job opportunities for Americans in and coming into the work force.
"For liberal Democrats," Balz continued "Biden’s early initiatives represent the fulfillment of a long-sought goal, which is to marshal the full resources of the federal government to attack big problems, from the threats posed by climate change, income and wealth inequality, the country’s aging infrastructure and the cost of higher education. Add to that his intention to tackle immigration and voting rights, and it adds up to the most expansive and ambitious agenda in half a century... Across five polls taken since late February, Biden’s stimulus package earned the support of between 61 percent and 75 percent of the public... All the pandemic-related spending bills under the Trump administration were approved with strong bipartisan support, as Republicans set aside their traditional resistance to bigger deficits and more debt to respond to an economic crisis caused by the pandemic. With Biden in the White House, GOP lawmakers have now snapped back in the direction of resistance to more government spending. They marched in unison to oppose the president’s stimulus bill and are lining up to do the same with the coming package."
And Democrats-- at least some Democrats-- have a way to pay for it: making the rich pay their fair share of taxes, something conservatives have chipped away at for 6 decades. Jim Tankersley and Emily Cochrane addressed those plans for NY Times readers over the weekend. Democrats, they wrote have been "clamoring to raise taxes on corporations and the rich, seeing that as a necessary antidote to widening economic inequality and a rebuke" to Trump's tax cuts for the rich. Under Biden, "they have a shot at ushering in the largest federal tax increase since 1942."
The package, which follows on the heels of Mr. Biden’s $1.9 trillion economic aid bill, is central to the president’s long-term plan to revitalize American workers and industry by funding bridges and roads, universal pre-K, emerging industries like advanced batteries and efforts to invigorate the fight against climate change.
Mr. Biden plans to finance that spending, at least in part, with tax increases that could raise upward of $2.5 trillion in revenue if his plan hews closely to what he proposed in the 2020 presidential campaign. Aides suggest his proposals might not be entirely paid for, with some one-time spending increases offset by increased federal borrowing.
“I think what you’re going to see is the administration is going to put a pay-for on the table for at least some and maybe all of the infrastructure plan,” said Senator Tim Kaine, Democrat of Virginia. “If Team Biden makes a proposal, I’m sure we’ll make adjustments but that’s a good way to start.”
Others in his party, including his own transportation secretary, have pushed Mr. Biden to explore tax plans he did not campaign on, like taxing consumption, wealth or vehicle miles traveled. Mr. Biden has stressed his broad-brush desire to increase the tax burden on wealthy Americans who largely earn their money through inheritance or investment, to fund spending programs meant to help people who earn their money primarily through wages.
“I want to change the paradigm,” Mr. Biden said Thursday during a news conference. “We start to reward work, not just wealth.”
Democratic lawmakers have promised for decades to raise taxes on companies and the wealthy, a desire that kicked into overdrive after Mr. Trump signed a tax-cut package that delivered an outsize share of its benefits to corporations and high earners. But they have struggled to muster the votes for large tax increases since President Bill Clinton signed a 1993 law that included a variety of hikes intended to help reduce the budget deficit. Business groups, conservative activists, lobbyists and donors across the ideological spectrum have largely blocked such attempts.
Jason Call is the progressive Democrat running in the northwest corner of Washington for a congressional seat held by garden variety corporate Democrat Rick Larsen. Yesterday Call told me that he thinks "it's important to recognize-- as many people have-- that austerity-minded conservatives (both Democrats and Republicans) never say a word about the deficit when corporations and the wealthy are seeking bailouts in a depressed economy, or when there's a war to be fought to line the pockets of the war profiteers. That tells me that they view the deficit as a cynical political football to be trotted out any time the working class needs help, and we need to call them out on it. We've run increasingly high deficits for the last twenty years-- has it led to hyperinflation? No. What the wealthy and corporations are seeking is to retain their systemic power. Extreme wealth inequality is the best way to secure political power (for the wealthy), and political power is the best way to secure continued wealth. It's a feedback loop.This is why the amount of economic recovery over the last 80 years of post-recession (boom and bust cycle) growth has increasingly gone to the top 10%, to the degree that following the Great Recession, the top 10% got more than 100% of their losses back, while the bottom 90% lost wealth (a point that Bernie made repeatedly on the stump.) We need the wealthy to be taxed-- and taxed heavily-- to create a more fair and more just society. I think it would be good for us to challenge the narrative that we need to tax the wealthy so we can pay for beneficial programs like Medicare For All and a Federal Jobs Guarantee, or guaranteeing tuition free college. We can pay for those programs the same way we pay for war. We just do it. These programs will bring huge economic and quality of life benefits, far greater than their cost, and that in itself will prevent inflation. Tax the rich because income inequality is bad-- for everyone!"
Christine Olivo is running in a south Florida House district held by a member who occupies a seat and doesn't do anything. Christine has no intention of being that kind of member. "We will never see the support needed to pass legislation to raise taxes for the rich," she told me last night, "until we have campaign finance reform. The same politicians we need to co-sponsor a tax bill are the same ones that depend on these big corporations to donate to their re-election campaigns. It will not be until we have a majority of grassroots funded politicians in office that we will see the strength in numbers needed to make the rich pay their fair share. It’s sad, but it’s true for both sides of the aisle."
Public polling shows broad support, even among many Republican voters, for raising taxes on large corporations and high-income individuals. The most conservative Democrats in the Senate, who hold great sway over Mr. Biden’s legislative agenda, say they favor trillions of dollars in infrastructure spending so long as there is a plan to pay for it.
...[T]here are disputes in the rank and file, with some favoring Mr. Biden’s plan to set the corporate rate at 28 percent and others preferring a lower one, like 25 percent. There are also questions over which high-earning individuals should see a tax increase.
Mr. Biden has pledged not to raise taxes on people earning less than $400,000. Some of his progressive allies, including Senators Bernie Sanders of Vermont and Elizabeth Warren of Massachusetts, have advocated raising taxes on a broader group. Democrats like Mr. Manchin have pushed him to consider additional tax plans that do not solely target the rich, like a European-style tax on consumption, though that type of tax could fall more heavily on low-income Americans than wealthy ones.
...Key Democrats are trying to bring the party to consensus. The top tax writer in the Senate, Ron Wyden of Oregon, is drafting a series of bills to raise taxes, many of them overlapping with Mr. Biden’s campaign proposals.
“I’ll be ready to raise what the Democratic caucus decides is required to move forward,” Mr. Wyden, the chairman of the Senate Finance Committee, said in an interview.
Mr. Wyden’s plans include big changes to the portions of Mr. Trump’s tax cuts that overhauled how the United States taxes multinational companies, including the creation of a minimum tax of sorts on income earned abroad. Mr. Wyden and many Democratic economists, including some inside the Biden administration, say that the tax was devised in a way that it ultimately incentivized companies to continue moving profits and activities offshore to avoid American taxes. Republican economists and some tax experts disagree and say the law has allowed U.S. companies to better compete globally.
A report from the congressional Joint Committee on Taxation this month showed that multinational companies paid an average U.S. tax rate of less than 8 percent on their income in 2018, down from 16 percent in 2017. The report also found that those companies did not slow their practice of booking profits in low-tax havens like Bermuda.
Mr. Biden, Mr. Wyden and Mr. Sanders have all drafted plans to raise revenues by amending the 2017 law to force multinational companies to pay more to the United States. One of the most lucrative ways to do that, according to tax scorekeepers, would be to increase the rate of the global minimum tax, forcing those companies to pay higher U.S. tax rates no matter where they locate jobs or profits.
"While it would be wrong to raise taxes on people who are poor, working class people, or middle class people (especially in a global pandemic)," said Colin Byrd, the progressive in the Maryland Senate campaign, "Congress has to tax the rich. Many billionaires are making more than ever, and billionaires like Jeff Bezos and companies like Amazon have to start paying their fair share."
And here's a really bad-- predictably so-- idea from one of Biden's worst Cabinet appointments, a mouth-talking McKinsey consulting bot who somehow imagines anyone is going to agree to a tax proposal that puts the burden on poor people.