Over the past several months, as Elizabeth Warren gathered momentum in the race for the Democratic nomination, a handful of wealthy individuals have insisted that they’re happy to pay more in taxes.
It’s not that they mind pitching in a little more, the likes of Leon Cooperman say, it’s just that they don’t appreciate being demonized by Warren and Bernie Sanders (it’s notable that although Bernie is much more abrasive in his approach, it’s Warren that draws the ire of the billionaire class).
Of course, it takes two to tango. Cooperman doesn’t seem to understand that when you accuse a public servant of “sh—ing on the f—ing American dream”, you’re likely to land yourself in a campaign ad. That’s kinda how it works, Leon. Especially when the politician you’re insulting spent her entire academic career researching why that very same American dream is proving increasingly elusive to a larger and larger share of the populace.
But if the billionaire class is scared “sh–less” (to put it how we imagine Leon would) of Warren, they’re absolutely mortified of Alexandria Ocasio-Cortez, who declared capitalism “irredeemable” in remarks delivered in March at South by Southwest, where she drew a larger crowd than Warren.
She was characteristically unapologetic. “Capitalism is an ideology of capital — the most important thing is the concentration of capital and to seek and maximize profit”, she said, adding that because this endless quest to improve the bottom line often comes at the expense of people and the environment “capitalism is irredeemable”.
Perhaps the scariest thing about AOC for the wealthy (and for Republicans in general) is that she isn’t a septuagenarian. Invariably, she will suffer setbacks and scandals (all politicians do), but Ocasio-Cortez is young, she is famous and she is going to be around for a long, long time.
Well, in a small taste of what’s coming, AOC along with Jan Schakowsky are all set to test out billionaires’ contention that they’re just fine with paying more in taxes as long as the rules are clearly defined and they aren’t vilified (that’s essentially what the likes of Cooperman, Jamie Dimon and Bill Gates have recently argued).
Specifically, Ocasio-Cortez and Schakowsky are drafting a bill that would nearly double the top individual tax rate to 59%, would raise the rate on capital gains and would implement a mark-to-market system on the appreciation of investments and real estate. The legislation will be introduced early next year.
As Bloomberg notes, this isn’t the only plan in the works and it’s best viewed in the context of the types of proposals Democrats would debate were they to sweep the House, Senate and White House in 2020. “Earlier this month, Representative Don Beyer of Virginia, along with Senator Chris Van Hollen of Maryland, introduced a 10% surtax on wages and capital gains income topping $2 million [while] Senator Ron Wyden of Oregon, the top Democrat on the Senate Finance Committee, is also finalizing a mark-to-market plan that would tax investments annually, rather than when they’re sold”, Laura Davison writes on Friday.
Ocasio-Cortez has, in the past, called for a 70% tax rate on Americans making $10 million on more. Speaking at an Urban-Brookings Tax Policy Center event in Washington this week, Schakowsky said the 59% rate mentioned above, in conjunction with payroll levies as well as state and local taxes, would nearly hit AOC’s mark.
The amount the plan would raise in revenue: More than $2 trillion over ten years, Schakowsky claims.
Donald Trump’s tax cuts are widely seen as having benefited primarily the wealthy and corporations, just as supply-side gimmickry is prone to doing. The president has also toyed with the idea of indexing capital gains to inflation, a move that would amount to a $100 billion windfall for the rich.
Data from the Fed shows the top 1% in America now controls as much wealth (basically) as the 50-90th percentile combined. That was not the case 13 years ago.
Gains on investments in corporate equities play a decisive role in that. Looking purely at the disparity between the value of stocks held by the bottom 50% versus the top 1%, the numbers are nothing short of outrageous.
The bottom 50% holds around $550 billion, while the top 1% controls $13.3 trillion.
Read more: One-Percenters Now Control As Much Wealth As Middle-, Upper-Middle Classes Combined
In the 1950s and 1960s, when the economy was booming, the wealthiest Americans paid a top income tax rate of 91%.
The heart of this issue is the way that tax cuts and tax loopholes have been structured to allow wealthy CEO-like characters to take more and more profit in terms of compensation. The simple version is that a long time ago, profit was channeled back-into the corporate structure to allow for greater future growth — but now, profit is much more likely to benefit fewer and ewer people. In the good old days, corporations were forced to use profits in ways that supported their workers, like offering insurance and pensions as well as building more facilities and hiring more people. The old way of taxing corporations resulted in a society that distributed wealth more fairly. So here we are now, with less investment in the future, lower taxes and super wealthy crooks that are no better than the crooks of the Industrial Age.
I think AOC is way off course and swinging way too radically left, but in-general her theme seems well intended — she seems overly reactive and abrasive, versus displaying a useful way forward.
Obviously God favors the 1% !!