Joe Biden's Top Five State Of The Union Recipes For Eating The Rich!
Last night's State of the Union address was actually pretty fun, for the first time in a long while, even though House Republicans were behaving like a bunch of snotty middle-schoolers with a substitute teacher. They just didn't expect Joe to school them instead, even maneuvering them into giving a standing ovation to a pledge not to cut Social Security and Medicare. (Not that they won't try anyway, because they have no shame.)
LAST NIGHT! The State Of Our Union Is ... BLOGGED!
But also in all the Parliament-style back and forth, and the Funkadelic-style costuming, Biden had some serious policy ideas to discuss, because he would very much like to build on the economic successes of the first half of his first term, thank you very much. And this being sensible help-the-middle and working-class Joe, his proposals would largely tax the rich and deliver benefits to the 95 percent of the rest of us — if any of them can get through the Republican-controlled House that did all the yelling last night, which is a rather big if.
Tax Stock Buybacks!
As part of last summer's Inflation Reduction Act, Congress created, for the first time ever, a tax on stock buybacks — the practice of companies buying back big chunks of their stock so that the dividends for investors will be higher. As you'll recall, after Donald Trump's 2017 Big Fat Tax Cuts for Rich Fuckwads, a lot of corporations used the tax savings windfall to buy back stock rather than hire more workers, increase pay, or upgrade equipment, leading to very well-justified criticism that Republicans had given corporate America a lot of money to help it make even more money, and so much for the idea of trickle-down economics yet again .
Unfortunately, it's looking like the one percent tax on buybacks in the IRA hasn't done much to slow companies' fondness for the practice, so during the State of the Union, Biden called for the buyback tax to be "quadrupled." As CNBC notes,
While he didn’t provide details on a new tax proposal, a quadrupling could take the tax from 1% tax to 4%, and the White House could push for the tax to be gross rather than net of any shares issued for employee pay and [mergers and acquisitions].
Actually passing any such increase would be tricky, because Republican House, and as CNBC points out, the buyback tax last summer had to be pared back from two percent to one percent to get the vote of Sen. Kyrsten Sinema. Expect the call to increase the buyback tax to feature in 2024 campaigning even if it doesn't get any traction in the current Congress. Oh, and we bet Rep. Ruben Gallego will talk about Sinema's opposition to it in his bid to replace her.
As CNBC details, oil companies have been plowing much of their recent record profits into buying back stock, and tech companies that have been doing layoffs have nonetheless found some spare cash for buybacks — $40 billion last year, in the case of Meta (aka Facebook). Apple spent $90 billion on buybacks in fiscal 2022, too.
Billionaire Minimum Tax
“The tax system is not fair; it’s not fair,” Biden said. “The idea that in 2020, 55 of the largest corporations in America, of Fortune 500, made $40 billion in profits and paid $0 in federal taxes? $0? Folks, it’s simply not fair.”
Biden noted that Congress had already included a 15 percent minimum tax on corporations in the IRA, and took a little victory lap, pointing out that if we can make corporations pay a minimum tax, we can for heck's sake do the same on billionaires too, exclaiming that we still have plenty of room to make the system fairer: “15 percent! That’s less than a nurse pays!”
Again, more of a talking point for reelection as long as Republicans are running the House. Or maybe sneak it into a Pentagon funding bill and hope nobody notices? Name it "George Santos" and nobody'll look at the details.
Get Those Fees Out Of Our Junk
Biden also took a bit of a victory lap on last year's action by the Consumer Financial Protection Bureau (CFPB) to crack down on "junk fees," those annoying little extra costs that add unexpected expenses to what you thought was the price of an airline ticket, hotel room, or just doing business with a bank. Biden wants to do more to get rid of the damn things so businesses will price things transparently, without hidden malarkey.
“Look, junk fees may not matter for the very wealthy but they matter to most other folks in homes like the one I grew up in,” Biden said. “They add up to hundreds of dollars a month. They make it harder for you to pay your bills. [...]
“Airlines can’t treat your child like a piece of baggage. Americans are tired of that. They’re tired of being played for suckers."
To that end, CNBC points out, the CFPB has proposed new rules to ban excessive late fees on credit cards, and Biden called last night for Congress to pass a "Junk Fee Prevention Act" that would make eliminating junk fees a matter of law, not simply an agency policy that a future administration might reverse. See also this nice econonerdy Twitter thread on junk fees by Bharat Ramamurti, the deputy director of Biden's National Economic Council.
Won't Someone Think Of The Child Tax Credit?
Biden called again for Congress to bring back the expanded Child Tax Credit that had been part of the American Rescue Plan, and which sharply reduced child poverty in America before it expired in January 2022. 3.6 million children were lifted out of poverty, so for crying out loud, let's bring that back, please.
It's The Breathing Room, Stupid
While he was at it, Biden called for actions that would level the economic playing field for consumers and for workers, like stronger antitrust enforcement to ensure that companies compete fairly, and yes, he was looking at you, Ticketmaster. "Look, capitalism without competition is not capitalism, it’s extortion," Biden said, urging Congress to pass bipartisan bills to strengthen antitrust enforcement.
He also called out companies that force low-wage workers to sign noncompete agreements that limit their ability to find better work, like that craptastic noncompete agreement Jimmy Johns used to keep employees from getting jobs at any other fast food place anywhere near a Jimmy Johns location. On that one, Joe recently issued an executive order directing the Federal Trade Commission to come up with rules to ban or limit noncompete agreements
And while Congress is at it, how about taking another swing at capping the price of insulin at $35 a month for Americans on private insurance, please. Medicare enrollees got the price cap in the IRA, but Senate Republicans killed the part of the bill that would have extended it to everyone.
All of the items on Biden's wish list are aimed at one of the central principles of his economic agenda: promoting a fairer, more equal economy that's aimed at helping working families instead of the richest corporations and investors. Grow the economy from the middle out and give everyone a fair shot, so people can have, as Biden's dad always said, "some breathing room."
Will any of it pass Congress? Maybe some of the smaller bits could win a few GOP votes in all the chaos. And there's no doubt more that Biden can do with executive action, even if the GOP calls him a tyrant.
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