Sunday, May 9, 2021
News + Politics A Democratic president actually talks about taxing the very rich

A Democratic president actually talks about taxing the very rich

Thank Bernie Sanders, Black Lives Matter, Occupy Wall Street and other organizers and activists for forcing the Democratic Party to the left

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If the economic policy Joe Biden put out tonight sounds incredibly progressive, it’s because the bar has been set so incredibly low.

Biden did something tonight that no Democrat has done in my adult lifetime: He talked about how important it is to raise taxes on the rich. He also talked about a critical issue: “We the people are the government.”

And he said that climate change will mean millions of new jobs.

Biden is following, not leading, the party to the left.

Jimmy Carter cut taxes on corporations. Bill Clinton supported the neoliberal agenda. Even Barack Obama never made a point of talking about taxes on the rich.

CNN’s Jake Tapper called it “the most progressive agenda from a Democrat since LBJ or maybe even Franklin Roosevelt.”

Here’s what Biden said:

There are good guys and women on Wall Street, but Wall Street did not build this country, the middle class built this country and unions built the middle class …

So, how do we pay for my jobs and family plans? I made it clear that we could do it without increasing the deficit. Let’s start with what I — I will not impose any tax increase on anyone making less than $400,000, but it’s time for corporate America and the wealthiest 1 percent to begin to pay their fair share. Just their fair share.

This isn’t radical at all. Biden never said that billionaires should pay taxes at the level that they did under Eisenhower, Kennedy, and Nixon. He’s not talking about class warfare.

But it’s a huge deal because Democrats for so many years have been afraid of taxes – and afraid of even mentioning the 1 percent. Afraid of supporting organized labor.

More:

Recent studies show that 55 of the nation’s biggest corporations pay zero federal tax — paid zero federal tax last year. Those 55 corporations made in excess of $40 billion in profit. A lot of companies. Also reviewed tax in Switzerland, the Cayman Islands. And they benefit from tax loopholes for having offshore jobs and shifting profits overseas. It is not right. We are going to reform corporate taxes so they pay their fair share and help pay for the public investments their businesses will benefit from as well.

When 20 million Americans lost their jobs in the pandemic working in middle-class Americans. — Working and middle-class Americans. At the same time, roughly 650 billionaires in America saw their net worth increased by more than $1 trillion, the same exact period. They are now worth more than $4 trillion. My fellow Americans, trickle-down economics has never worked and it is time to grow the economy from the bottom and the middle out.

This is, again, a major deal: Democrats like Biden have for decades been afraid to challenge the concept of trickle-down economics. It was Kennedy who famously said that “a rising tide lifts all boats.”

Except, of course, for people who don’t have a boat.

So Biden has called for higher taxes on the rich. He has challenged neoliberal orthodoxy. He has said in public that too many big corporations don’t pay their fair share in taxes.

Again, this isn’t anything that smacks of socialism, although the Republicans are going to say that.

It’s a recognition that the mainstream of the Democratic Party has shifted on economic issues.

That, I think, is due to two factors: Bernie Sanders and young voters.

Sanders electrified millions of people with a message that addressed economic inequality. He, by force of his persistence and his platform, has moved the Democratic Party so far to the left that Biden – who has always been someone who lived in the center of the party – has had to shift with it.

And the next generation of voters – people who were told that college would get them into the middle class but now struggle with massive student loans, people who see the impacts of economic inequality every day – are with Sanders.

And Biden knows that.

Oh, and listen to this: Biden called on Congress

To root out systemic racism in our criminal justice system and enact police reform in George Floyd’s name that has passed the House already.

He is the first Democratic president in history, I think, to use the words “systemic racism in our criminal justice system.”

That, of course, is not Biden’s political legacy. He was a tough-on-crime senator who is responsible in part for the horrifying history of mass incarceration of Black people.

But he’s a savvy politician – and he knows the world has changed. He stood tonight for the first time in front of two women, including the first Black woman ever to hold one of the two top offices in the land — for a speech that had historic potential. (Oh, and both of the women on the podium were San Franciscans.)

So tonight’s speech was a product not of Biden but of Sanders and Black Lives Matter and Occupy Wall Street and so many other organizers and activists who have forced the mainstream of political debate to the left.

And people who have tried since Ronald Reagan to say that government is the solution, not the problem.

We’re not there yet. But let’s take a moment and say we are making progress.

Tim Redmond
Tim Redmond has been a political and investigative reporter in San Francisco for more than 30 years. He spent much of that time as executive editor of the Bay Guardian. He is the founder of 48hills.

7 COMMENTS

  1. Tax all sources of income (earnings, dividends, interest, capital gains) at the same %, and include SSI and Medicare taxes as part of any earnings. Eliminate deductions and make the first $12K of earnings income tax free. That would be fair.

  2. br citizen there are some ways of legally avoiding capital gains taxes on real estate – you should talk to a professional. You can swap for another property for example. Biden is more concerned with people whose net worth runs in the tens of billions

  3. @y… If an accountant or a nurse bought a modest 2 bedroom with a tiny garage in the Mission District, circa oh… 1998, maybe for $300,000, that house could well be worth $2 milllion. That would be a $1.7 million capital gain. Sure, a measly $250K would be exempt for a primary residence. That leaves a capital gain of 1.45 million. Add their income of maybe 150K to that, and the IRS says that you made 1.6 million the year that you sell that house.

    The first million of that will be taxed at 23.8% capital gains, plus 13% for California, plus another 3% if they raise the top CA bracket like they want to. So that’s 400K you have to pay the government. The last 600K of that would get taxed at 43.4% to Biden, and another 16% to Newsom. For a total of 60% tax, or another 360K.

    Total tax bill is 760 K on that capital gain. And suddenly your little nest egg isn’t worth so much anymore. Better keep working till you’re 75.

  4. br, I think people are talking about taxing a capital *gain*, that is a yield, of $1m+ in a year, not on having $1m of capital.

  5. Meh. I’m very much in favor of taxing the rich. But having a capital gains of over $1 million is very, very common among ordinary professionals in San Francisco. A house owned for any length of time, a decent stock portfolio painstakingly assembled over years on a middle income salary, a small crypto investment, stock options… any of the above and more will easily put you over that threshold. And don’t forget California, which adds another 13%, soon to be 16%.

    I’m 110% fine with an increase in the income tax over 400K, but it’s totally disingenuous to claim that you’re not going to raise taxes on people who make less than 400K, and then do a massive capital gains tax increase on people who make way less than that, but have some asset they’ve been counting on for retirement.

  6. Sanders has had a major impact on the platform of the Democratic party – maybe more than Obama or Clinton. Barack Obama did talk about taxing the rich but he couldn’t get it done because he lost control of the Congress.
    the progressives aren’t giving Biden enough credit. Like most older and middle aged Americans he lived through enough decades in this country such that his views have evolved over time. Cutting taxes on the rich may have stimulated some economic growth when the highest tax rate was 80%. But it does not stimulate economic growth when you continue to try to cut taxes ad infinitum and de fund the government at the same time. The private sector can create prosperity and solve inequality when it works in tandem with the government. One of the reasons America has been the success and envy of the world over the last 100 years is that the private sector and the government have had a mutually beneficial relationship.
    Plus the fact is every time we have had a Republican president everything falls apart and disaster ensues.

  7. All that, definitely, but also: Democrats aren’t afraid of Republicans any more. They know conservatives have become an uncompromising monolith that can’t be appeased, so they no longer bother trying to appease them.

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