President Biden Was Right to Change the Narrative on Taxes and Inequality by Proposing a Billionaires’ Tax
By Jim Miller
Last week, before Joe Biden’s State of the Union address, I ended my column on the looming debt ceiling fight with this, “The big political question is whether or not the Democrats have any inclination to try to take economic populism back from the right or if they’ll follow the lead of the blue dogs.”
The answer appeared in Biden’s speech when he came out swinging with a series of populist proposals that while they may not be able to pass Congress, should play an important role in shaping the narrative as we head into 2024.
The boldest proposal the President outlined was a billionaires’ tax that immediately set off alarms in the business press from Forbes to the Wall Street Journal and led the The Hill to eagerly point out that, “with Republicans in control of the House — and eager to block the president’s wish list — Biden doesn’t have a pathway to enact many of the economic reforms announced at his State of the Union address, including a four percent tax on stock buybacks, a wealth tax on billionaires and expanded paid leave for workers.”
Indeed, Biden’s advisors were quickly out on the media circuit doing their best to explain the policies. As CNBC reported :
A top White House economist defended tax proposals aimed at the wealthiest Americans outlined by President Joe Biden during his second State of the Union address.
Jared Bernstein, a member of the White House Council of Economic Advisers, said Biden’s tax proposal will target big corporations and the wealthiest Americans while protecting taxpayers who earn $400,000 a year or less from tax hikes.
“The days of the top 1% paying less than teachers and nurses ... those have got to be behind us as we inject fairness into the tax code to achieve fiscal rectitude,” Bernstein said in an interview Wednesday on CNBC’s “Squawk Box.” . . . During his State of the Union address Tuesday night, Biden urged Congress to pass his so-called billionaire’s tax, which proposes to impose a minimum 20% tax on households with a net worth of more than $100 million — a 12 percentage point increase from an average of 8% they currently pay.
Others in the administration have rightly argued that if you want to address the deficit without gutting Social Security or Medicare, you need to talk about revenue. While this may make corporate Democrats and lobbyists uncomfortable, it is a savvy political move.
By framing this as a choice between funding programs for ordinary Americans by taxing the superrich or cutting them while billionaires pay a smaller share of their income on taxes than middle- and working-class Americans, the Biden Administration is seeking to change the narrative in a way that just might start to win back working people in red states who’ve given up on the Democrats as the party of the cultural elite.
And even though this proposal may be “dead on arrival” in gridlocked Congress, this is precisely the kind of argument that puts Democrats on the right side of history while aligning them with the vast majority of Americans who favor upping taxes on the rich, elite pundits be damned. It is also precisely how the Republicans have succeeded in dragging the country to the right politically, pushing the envelope further and further, whether or not they win every battle.
Biden’s adoption of a billionaires’ tax is also moving in tandem with eight other states where wealth taxes are being proposed by progressives, including Assemblymember Lee here in California.
As I underscored in my San Diego Union Tribune column on Lee’s bill last week, wealth taxes are actually social justice proposals that aim to reverse the upward redistribution of wealth over the last several decades:
To really see the big picture of American inequality, one needs to focus not just on the obscenely huge income gap but also on the even more significant wealth gap. As Robert Reich has pointed out, in the United States the wealth gap has exploded over the last few decades with the share of household wealth controlled by the richest 10% of Americans going from one third in the 1970s to 75% today. When one drills down a little deeper into the numbers, the level of inequality is even more dramatic, with the top one-tenth of one percent of Americans owning as much as the bottom 90% of the rest of us.
Thus, as prominent UC Berkeley economist Emmanuel Saez told the Los Angeles Times, a wealth tax would restore “tax justice.”
So good on Biden for using the bully pulpit to change the narrative on taxes and economic inequality in the State of the Union. Ignore the cynical pundits and keep banging that drum.
The corporate media may not approve but most Americans will if the Democrats embrace this message clearly and persistently enough to cut through the noise.