Democrats Urged to Seize 'Historic Chance' on Billionaire Wealth Tax

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Following Sen. Kyrsten Sinema's objection to raising the corporate tax rate, the party has turned to Sen. Ron Wyden's proposal.

As House Speaker Nancy Pelosi indicated the Democratic Party was close to a deal on the social spending package whose passage right-wing Democrats have obstructed for weeks, economic justice advocates ramped up pressure on Tuesday, demanding the party include a tax measure targeting the exorbitant wealth of the richest Americans.

The party has been forced in recent days to look for ways to ensure wealthy individuals and corporations pay their fair share and help contribute to government spending that would invest trillions of dollars over a decade in the wellbeing of lower- and middle-class households, after Sen. Kyrsten Sinema (D-Ariz.) indicated she would not support the Build Back Better Act if it included a reversal of the Trump-era tax cuts.

"The billionaire wealth tax merits an extra push since it is the most powerful tool on the table for tackling the wealth inequality that is undermining our economy and threatening our democracy."

Democrats have hoped they could raise revenue for climate action, paid leave, direct payments for people with children, and other key provisions in the Build Back Better Act by raising the individual income tax rate just over two points to 39.6%, the corporate tax rate from 21% to 26.5%, and the top capital gains tax rate from 20% to 25%.

Following reports about Sinema's objections last week, Democrats have turned to Sen. Ron Wyden's (D-Ore.) Billionaires' Income Tax, which would tax unrealized capital gains and is expected to raise between $250 billion to $500 billion in the first year—applying to just 700 taxpayers with assets valued at more than $1 billion in assets or income over $100 million for three years in a row.

With a proposal including an expansion of Medicare benefits for tens of millions of senior citizens, drug price negotiating power for the Medicare program, paid family leave, and other initiatives hanging in the balance, the advocacy group Patriotic Millionaires said Democrats can't afford to miss an opportunity to narrow the United States' massive wealth gap.

"Given our country's many pressing needs, we must keep up the heat on conservative Democrats to embrace a full fair tax toolbox," wrote Sarah Anderson and Chuck Collins of the Institute for Policy Studies at Common Dreams on Monday. "These should include raising top income and corporate tax rates, closing loopholes, and other innovative reforms on the table, such as a surtax on mega-millionaires and excise taxes to discourage excessive CEO pay and wasteful corporate stock buybacks."

"But the billionaire wealth tax merits an extra push since it is the most powerful tool on the table for tackling the wealth inequality that is undermining our economy and threatening our democracy," they added.

The tax reform group Americans for Tax Fairness (AFT) last week unveiled a website dedicated to highlighting the popularity of plans to tax the wealthiest Americans as part of the Build Back Better Act—with such proposals making the legislation 20 to 40 points more popular in swing districts.

Wyden's proposal represents "a change in the way to think about the tax system, but it's a long overdue change," Frank Clemente, executive director of AFT, told The Hill Tuesday.

Sen. Joe Manchin (D-W.Va.), who like Sinema has pressured his party into significantly weakening the Build Back Better Act, told The Hill he was receptive to the Billionaires' Income Tax, saying, "I'm open to any type of thing that makes people pay that's not paying now," while Republicans and wealthy Americans were quick to attack what investor Leon Cooperman called "a relentless attack on wealthy people" that would fan "the flames of resentment."

Sen. Mitt Romney (R-Utah) suggested the proposal would encourage wealthy Americans to invest in "a ranch or paintings or things that don't build jobs," rather than in the stock market.

"Billionaires' wealth surged during the pandemic as everyone else suffered an enormous recession, and as soon as you suggest that they help pay for investments that benefit ordinary people Republicans immediately start flipping out about it," said Rep. Don Beyer (D-Va.).

As Patriotic Millionaires chair and former BlackRock executive Morris Pearl wrote, the notion that investors create jobs is "completely, totally, 100% wrong."

"Sure, you can call some rich people that built businesses from the ground up job creators, but that’s a small, small minority of those of us given that label," he wrote at Patriotic Millionaires University, a political messaging project for candidates. "The way most rich people get rich and stay rich, investing, has nothing to do with job creation."

Romney's statement exemplified the difference between progressive lawmakers and those standing in the way of a wealth tax or increased tax rate for the rich, said Rep. Chuy Garcia (D-Ill.).

"Mitt Romney wants to protect billionaires, I want to protect single mothers working two jobs to make ends meet," tweeted Garcia. "We are not the same."

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Democrats Urged to Seize 'Historic Chance' on Billionaire Wealth Tax

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