By MORRIS PEARL
Patriotic Millionaires
Over the past two years, President Biden and Congressional Democrats have had some legislative wins, most notably The American Rescue Plan. But unless Democrats do something soon, they’re going to be coming to voters in November with very little to show for two years of complete control of Washington.
If Democrats want to improve their tight poll numbers and win in November, they should score some big legislative wins over the next few months to sell to voters on the campaign trail. There are a number of legislative possibilities from which to choose in this regard, but the best path forward lies in taxing the rich.
There is widespread support among the American people for making the tax code more fair and more progressive. According to a poll conducted by Americans for Tax Fairness, over 2/3 of voters from across the political spectrum support raising taxes on rich Americans like me. They see millionaires, billionaires and corporations get away with paying nothing or next to nothing in taxes all the time, and they want lawmakers to finally do something about it.
Democrats should use what limited time they have left before November to deliver for voters and reform the tax code. There are a number of popular and well-developed tax initiatives already in play that they could throw their weight behind. President Biden’s Billionaire Minimum Income Tax and Representative Bowman’s Babies Over Billionaires Act would tax the unrealized capital gains of billionaires. Senator Warren and Representatives Jayapal and Boyle’s Ultra-Millionaire Tax would institute an annual wealth tax on the wealthiest households in America. Senators Warren, King and Wyden’s Corporate Profits Minimum Tax would prevent America’s biggest corporations from skirting tax liabilities. These are just a few of many tax proposals that, if enacted, would go a long way towards forcing me and my wealthy peers to pay our fair share and ensuring voters get the progressive tax reform that they want.
The key obstacles to getting this done lie with moderate Senators Manchin and Sinema. They are the reason why Biden’s original Build Back Better Act, which included several promising tax initiatives, failed to pass last year. Their recalcitrance and obstruction in the months-long negotiations over the bill – not to mention their unwavering loyalty to the financial interests of their corporate donors over those of their constituents – prevented Democrats from ultimately passing their reconciliation bill.
But all hope is not lost. Recent reports indicate that Manchin is engaged in talks with Senate Democrats over passing some form of “skinny” Build Back Better plan that includes tax hikes on the rich, including a 3.8% surtax on wealthy owners of pass-through businesses. With this opening, Democrats must now do whatever is necessary to escalate negotiations and get some kind of tax reform bill passed before the midterms.
Taxing the rich provides the best path forward for Democrats to help voters weather the current inflation crisis. Taxing millionaires and billionaires could decrease the money supply in the economy and cool demand; furthermore, the revenue raised could be used to boost the economy’s productive capacity to help supply keep pace with demand. There are many other crises – e.g. gun control, reproductive rights, election security, etc. – that voters want tackled. But Democrats should certainly make taxing the rich a top priority given its overwhelming support from the public, the clear tangible benefits it could provide to help assuage the inflation situation, and the fact that inflation and the economy are going to be top of mind for almost every voter.
As a wealthy American, I can say firsthand that people like me can absolutely afford to pay more taxes, and that doing so is not as complicated or involved as some of my wealthy peers would have you believe. The issue with passing tax reform in America boils down to a simple lack of political will. Let’s hope that Democrats can find that will sooner rather than later and get meaningful, substantive tax reform passed before it’s too late.
Morris Pearl is a former managing director of BlackRock. He is the chair of the Patriotic Millionaires.
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