If *Joe Scarborough* Thinks Dem Plan Doesn't Tax Rich Enough, That Plan Could Use Some Fixin'
Bring in Mojo Nixon!
The House Ways and Means Committee has turned in its homework for its part of the Build Back Better budget plan, with a plan to increase personal and business taxes, as well as a number of other tax increases, that would rustle up about $2.1 trillion toward Joe Biden's agenda for rethinking the social safety net and moving America away from fossil fuels. That's far short of the $3.5 trillion that had been announced earlier this summer as the spending target, and as the New York Times explains, the Ways and Means plan wusses out by dropping several measures the White House wants, which would have raised taxes on the super-wealthy:
[The] proposal , while substantial in scope, stopped well short of changes needed to dent the vast fortunes of tycoons like Jeff Bezos and Elon Musk, or to thoroughly close the most egregious loopholes exploited by high-flying captains of finance. It aimed to go after the merely rich more than the fabulously rich.
There are things to like in the Ways and Means proposal, like the increase on the top marginal income tax rates for individuals to 39.6 percent, the rate prior to Donald Trump's Big Fat Tax Cuts for Rich Fuckwads. It raises the corporate tax rate to 26.5 percent, less than the 28 percent Biden wanted, but more than the 25 percent Joe Manchin wanted (and all of 'em lower than the 35 percent rate prior to 2017).
The plan also raises the capital gains rate to 25 percent, from the current 20 percent, which is an improvement, but nothing like the tax equalizer Biden called for . Since the obscenely rich make their money off investments, not paychecks, Biden had called for people making over a million dollars a year to pay a capital gains rate of 39.6 percent, just like the top marginal income tax rate. And again, since the super-wealthy don't get their money as paychecks, even raising the income tax rate leaves their real income mostly untaxed.
Happily, the bill is just getting started, and Senate Dems, as well as progressives in the House, may well take a less chickenshit approach to taxing the wealthiest Americans, who already avoid paying anything like the tax rates the rest of us do.
Most gallingly, the Ways and Means proposal doesn't close one of the more infuriating tax loopholes used by rich fuckwads, the "step up in basis" thingy, which allows rich people to pass on investments to their heirs without the heirs paying the full amount of capital gains tax on the assets' increase in value. Please don't hyperventilate; here's a nice clear overview from Bloomberg News :
The step-up rule allows investors to pass on assets to heirs virtually tax-free, raising the taxable value of a property to its fair market value at the time it is inherited. A beneficiary who inherits a house worth $1 million purchased for $100,000 two decades earlier would have no capital gains. If she later sells for $1.5 million, she only pays tax on $500,000.
Former Democratic Sen. Heidi Heitkamp's lobbying effort appears to have worked: Ways and Means chopped closing that loophole out of its tax plan, but as we say, it could yet be restored as the bill takes further shape. This is one to yell at your representatives and senators about, kids.
Ways and Means Chair Richard Neal (D-Massachussetts), the Times reports, supposedly chose not to more aggressively tax the super rich out of a concern for "moderates" who might be put off by anything that sounded like a "wealth tax," which didn't cut it with MSNBC host Joe Scarborough — yes, that Joe Scarborough — who offered a pretty good rant about it this morning.
Scarborough said he didn't get all this placating of alleged "moderates":
What, do they want Amazon and Jeff Bezos to keep paying zero dollars [in taxes]? Is that a moderate concern, or is that a lobbyist's concern?
Gee, who could ever guess, former Sen. Heitkamp?
Scarborough called out the greatest Republican fakeout since the Reagan years: the idea that the rich deserve to have the economy arranged to make them richer, or maybe they'll be too sad to create jobs for the rest of us. Hooey, said Scarborough, rejecting the talking point that only evil socialists might support any "scheme that redistributes wealth," when in reality, the class war has been going on since the '80s:
Well let me tell you something. In the world we've lived in for the past 40 years there's been the largest income redistribution scam in American history. And it's been the middle class that's been looted while trillions keep flowing into the bank accounts of billionaires.
Now, we could nitpick and point out that it's really the stock portfolios and hedge funds and exotic financial instruments of billionaires, not their passbook savings accounts, but the basic point is sound.
Scarborough went on to point out that those crying loudest about "income redistribution" whenever anyone suggests increasing taxes are "the people who've scammed you," along with their armies of lobbyists and tax lawyers and pet members of Congress.
If Democrats really want to make America "a fairer place, if you want to get us back to where we were before where there wasn't such massive divergence between the super-wealthy and the rest of Americans," Scarborough fumed, "you're going to have to re-write your tax plan."
Let's hope so! We'd also like to give a round of applause to Rep. Katie Porter (D-California), who last week had her own math lesson for moderates like Sen. Joe Manchin, who worry too much about the wealthy and hardly at all about working Americans:
I think it's dead-on fiscally irresponsible for Senator Manchin to refuse to raise revenue and at the same time out of the other side of his mouth — maybe the side of his mouth that he uses to talk to his corporate donors — complain that we can't pay for the things that American families desperately need.
It remains to be seen whether Joe Scarborough will stay with the progressives on the barricades, or whether he'll get grumpy about people booing Donald Trump or something that's just as terrible as the wealth inequality in this great nation. Has he said anything yet about AOC's mean dress?
[ NBC News / NYT / MSNBC on YouTube]
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Actually the first $80,000 in capital gains is totally tax free.
If we were a politically serious country we’d elect people who aren’t millionaires.And not re-elect people who became millionaires while they were in office.