What do you think? Leave a respectful comment.

Senator Kamala Harris holds a rally to launch her 2020 presidential campaign in her hometown of Oakland, California on Jan. 27, 2019. Harris' tax plan includes cash payments for low-income Americans in the form of refundable tax rebates. Photo by Leah Millis/Reuters

Why 2020 Democratic candidates are pushing more progressive tax proposals

Democratic 2020 contenders are pushing some of the most progressive tax proposals in decades, a sign that the debate over one of President Donald Trump’s signature achievements–the Republican tax overhaul–could become a crucial issue in the primary elections.

The 2017 tax law was a major victory for Republicans who had long claimed that lowering taxes would drive economic growth. Democrats bitterly opposed the overhaul, arguing that the wealthy and corporations didn’t need a tax cut.

Now, more than a year after Trump signed the tax cuts bill, the two parties are as divided as ever on taxes.

While there’s widespread consensus among 2020 Democrats that taxes on the wealthy should go up, there’s disagreement on the details and no two proposals look exactly alike, a sign that economic policy could dominate the Democratic primaries.

“The whole window has moved,” said Morris Pearl, the chair of Patriotic Millionaires, an organization that supports more taxes on the wealthy. “It used to be that making taxes more progressive was considered the crazy left wing. Now that we have some very progressive plans in the left wing, restoring things to where they were two years ago [before the Republican tax cuts] seems a middle of the road plan.”

Sen. Elizabeth Warren, D-Mass., has proposed a 2 percent annual “wealth tax” on Americans who have more than $50 million in assets, and a 3 percent tax on those with a net worth of more than $1 billion. That tax would be on top of any income taxes they already pay.

Sen. Bernie Sanders, I-Vt, who announced his 2020 presidential campaign Tuesday, wants to increase the federal estate tax to 77 percent on the wealthiest 0.2 percent of Americans.

Sen. Kamala Harris, D-Calif., is sticking by the tax plan she proposed last fall. It would give middle-income households cash payments of up to $6,000 a year per family. The payments would be offset by repealing the 2017 GOP tax cuts and creating a fee on large financial institutions.

Sen. Cory Booker, D-N.J., meanwhile, has proposed a bill that would create savings accounts for every American child, paid for by an increase in the capital gains and estate taxes.

Sen. Kirsten Gillibrand, D-N.Y., Rep. Tulsi Gabbard, D-Hawaii, and former Maryland congressman John Delaney have all denounced the Republican tax cuts.

Julian Castro, a former Obama administration cabinet official, has said he supports raising the corporate tax rate to make sure companies “pay their fair share.”

While she is not a candidate for president, freshman Rep. Alexandria Ocasio-Cortez, D-N.Y., proposed a top marginal tax rate of 70 percent — a rate not seen since before President Ronald Reagan implemented a series of tax cuts in the 1980s. Herplan drew the most headlines, and was widely panned by Republicans.

Overall, public support for raising taxes on the wealthy has in fact dropped slightly in recent decades. In 1992, 77 percent of Americans polled by Gallup said upper-income earners paid too little in taxes. Last year, that number was down to 62 percent, according to Gallup polling.

But the idea of raising taxes on the wealthy has gained ground with liberal voters — and unsurprisingly, Democrats overall are twice as likely as Republicans to say tax rates should be raised for corporations and high-income earners, Pew Research Center surveys show.

There are also signs that the 2017 tax overhaul sharpened the partisan divide over taxes.

The law doubled the standard deduction for individuals, gave tax write-offs to businesses that invested in the U.S., reduced the corporate income tax rate form 35 percent to 21 percent, and created a 20 percent deduction for small business owners who pay their taxes as individuals instead of through their companies.

Republicans said the overhaul was a tax cut for the middle class and argued it would spur economic growth, but Democrats, and a number of nonprofit organizations, have labeled it a tax cut for the wealthy and some studies have shown companies are investing less in research and workers than GOP lawmakers predicted.

Only 8 percent of Democrats approve of the law, according to Gallup, compared to 76 percent of Republicans and 34 percent of Independents.

The polling underscores why raising taxes on the wealthy could help draw votes in the Democratic primaries. But the 2018 midterm elections proved that focusing too much on taxes could be risky.

Only 11 percent of voters said tax cuts were an important issue in the midterms, according to an NPR/PBS NewsHour/Marist poll. At the same time, about 60 percent of respondents said they preferred reversing the tax cuts to reducing government spending for Social Security, Medicare and Medicaid.

Now, 2020 White House hopefuls need to figure out how to thread that needle, Democratic strategists said.

“We’re not going to win on taxes. We need to win on a broader economic message,” said Celinda Lake, a Democratic pollster. Lake noted Americans trust Republicans about as much as Democrats when it comes to taxes.

But others argued that drilling down on the details will matter, especially explaining to voters how the tax hikes will be paid for — and what programs the tax revenue would fund.

“If [presidential candidates] are going to put out these ambitions spending proposals and investment plans then they have to say how they are going to pay for it,” said Frank Clemente, the executive director of Americans for Tax Fairness.

Support for Making Sen$e Provided By:

Support for Making Sen$e Provided By:

The Latest