Progressives Back Harris Plan to Raise Taxes on Billionaires
"Since 1975, over $50 trillion in wealth has been redistributed from the bottom 90% to the top 1%," said one proponent. "That's trillion with a 'T.'"
Progressive advocates on Thursday threw their support behind a so-called billionaire minimum income tax endorsed by Vice President Kamala Harris, the Democratic presidential nominee, as a way to help tackle the wealth inequality that's worse in the U.S. than just about anywhere else in the Global North.
Left-leaning economists cheered news that Harris is embracing calls to tax the richest people in the country, who enjoy various ways of ensuring they pay lower tax rates than millions of working- and middle-class Americans including many nurses, teachers, and truck drivers.
"It's outrageous that billionaires pay less taxes than public school teachers."
The plan introduced by Harris' campaign this week would increase federal revenue by $5 trillion over a decade by hiking taxes on the wealthiest Americans. It contains tax increases proposed earlier this year in President Joe Biden's budget blueprint, which was welcomed by progressives with the caveats that much more needed to be done to help working-class Americans and that far too much money—nearly $900 billion—is allocated for military spending.
Republicans have falsely accused Harris of seeking to raise taxes on the middle class.
"There's lots of tax proposals in the Biden budget, which Harris has endorsed, so why are Republicans choosing to focus on the obviously false claim that the billionaire minimum income tax applies to the middle class when the name itself refutes that?" University of Wisconsin, Madison economic policy expert Harry Stein
said Thursday on social media.
As The New York Timesreported Thursday:
No one making less than $400,000 a year would see their taxes go up under the plan. Instead, Ms. Harris is seeking to significantly raise taxes on the wealthiest Americans and large corporations. Congress has previously rejected many of these tax ideas, even when Democrats controlled both chambers.
While tax policy is right now a subplot in a turbulent presidential campaign, it will be a primary policy issue in Washington next year. The next president will have to work with Congress to address the tax cuts [then-President] Donald J. Trump signed into law in 2017. Many of those tax cuts expire after 2025, meaning millions of Americans will see their taxes go up if lawmakers don't reach a deal next year.
Harris' plan would raise the top marginal income tax rate from 37% to 39.6%, while also increasing Medicare surtax rates from 3.8% to 5% for Americans making more than $400,000 per year. Meanwhile, gains on investments would be taxed at the same rate as regular income for people making more than $1 million annually.
"The superrich don't make their money the way most people do. Their money comes from owning businesses, property, financial assets, and inheritances," economist Michael Linden
explained in a Wednesday social media post. "These types of income all enjoy special tax advantages, and that's why they end up paying less than middle-income Americans."
On Thursday, U.S. Sen. Elizabeth Warren (D-Mass.)
said that "it's outrageous that billionaires pay less taxes than public school teachers. It's time that we make the wealthy pay their fair share. My ultra-millionaire tax would do just that."
In March, Warren and Reps. Pramila Jayapal (D-Wash.) and Brendan Boyle (D-Pa.)
introduced an updated version of a 2021 bill that they said would bring in at least $3 trillion over 10 years by imposing a 2% tax on wealth over $50 million. The legislation also includes a 3% tax on the wealthiest households overall, with a 1% annual surtax on the net worth of households and trusts over $1 billion.
Last year, Reps. Steve Cohen (D-Tenn.) and Don Beyer (D-Va.)
reintroduced the Billionaire Minimum Income Tax Act with the support of scores of House Democrats. The bill—which was drafted in coordination with the White House and U.S. Treasury Department and is backed by dozens of labor and progressive groups—would amend the Internal Revenue Code to factor unrealized gains into a minimum tax on certain wealthy individuals.
Sen. Ron Wyden (D-Ore.) led 15 of his colleagues in introducing an upper chamber version of the legislation.
Meanwhile, Trump, the Republican nominee for president, has promised to extend the tax cuts from his $1.5 trillion plan, which was derided as the "GOP tax scam" when he signed it into law during his first White House term. A 2023 analysis by the progressive advocacy group Americans for Tax Fairness found that the collective fortune of U.S. billionaires skyrocketed by more than $2 trillion in the years after Trump signed the tax cuts into law.
