This article is from Capital & Main, an award-winning publication that reports from California on economic, political, and social issues.
During four years of Donald Trump’s high-anxiety presidency, Republicans could at least point to one goal accomplished amid the noise and two impeachments: the 2017 tax reform law. Hours after signing the bill, Trump was down at his Mar-a-Lago resort in Palm Beach, Florida, bragging to some of his most affluent friends: “You all just got a lot richer.”
His glee was unsurprising, once again confirming who the former president thought were his most important constituents. It was also the latest example of the GOP’s insatiable desire to cut taxes for the wealthiest Americans, a movement forged in the 1970s and 1980s by California anti-tax activist Howard Jarvis and President Ronald Reagan.
At the same time, a huge disparity between rich and poor continues to accelerate in California and across the country. The blatant unfairness of the federal tax code hasn’t escaped the notice of voters, who are increasingly open to the rising call for national and state wealth taxes.
A 2020 Reuters/Ipsos poll found that 64% of Americans favor some kind of wealth tax for the super-rich, agreeing they should “contribute an extra share of their total wealth” each year. That support crosses party lines, with 77% of Democrats backing the idea and 53% of Republicans.
The movement has also been fueled by an influential 2013 best-selling book, Capital in the Twenty-First Century, by French economist Thomas Piketty, who argued that society becomes unstable with wealth inequality. His solution: progressive wealth taxes. “Wealth is so concentrated,” he writes, “that a large segment of society is virtually unaware of its existence.”
During the 2020 presidential primary season, proposals for a wealth tax from progressive senators Elizabeth Warren and Bernie Sanders were widely popular, though Joe Biden never explicitly endorsed the idea. Billionaire candidate Tom Steyer proposed a tax whereby “anyone worth $32 million or more” would pay an additional 1 cent on the dollar. For those with more than $500 million, it would go to 1.5 cents; and for billionaires, an additional 2 cents for every dollar. The result would be an extra $1.7 trillion in tax revenue over a decade.
A current proposal by Democratic Senator Ron Wyden of Oregon called the Billionaires Income Tax, would target about 700 extremely wealthy taxpayers—the top 0.0005% of Americans. It could be a crucial ingredient in funding whatever form President Biden’s Build Back Better plan takes when it reemerges this year.
The federal proposals are gaining more attention as an alternative to traditional tax increases that don’t enjoy the support of Democratic moderates in the Senate, Kyrsten Sinema of Arizona and Joe Manchin of West Virginia. Biden is naturally …….