Inevitably, 2020 Democrats, seeking the White House or a seat in the Senate or Congress, will campaign for some expensive programs, because we must address needs that Republican policies have long starved for funding and otherwise crippled. There really is no choice. America’s lack of programs like Medicare for All, debt free college and sensible climate response, along with the failure to keep up with national infrastructure construction and improvement, has our nation standing on the slippery edge of an accelerating slide away from First World status. Republican policies have dug a $5 — $10 Trillion hole that even the Defense Department budget couldn’t fill
Sensible people understand these needs. Sadly, that leaves out the GOP. So, all Republicans will oppose any proposal to fund new spending programs on grounds that we can’t afford it. Sadly, too many Democrats will see it the same way. Nevertheless, America must have these kind of programs and be willing to raise the revenue required to implement the ideas. We must do these things against a background of the currently exploding deficits, under Trump and the GOP, caused by limitless defense spending and aggressively regressive federal taxes.
But in 2020, those polices ironically enable Democrats to support higher taxes and new spending as affordable and good government. Democrats can win by promising to tax fairly and spend wisely, at the expense of greedy money hoarders.
Democratic Party history tells of how Walter Mondale, more or less, doomed his Presidential candidacy against Reagan in 1984 with his promise to honestly tell the American people of the unavoidable need to increase taxes. St. Ronald of Reagan, whose voodoo tax cuts had caused a revenue crisis, was reelected anyway, and taxes went up, just as Mondale predicted, in 1986. But a generation of Democrats became gun shy about supporting any increase in taxes, while a generation of Republicans became Grover Norquist.
But lots of things have changed since 1984. Today’s Democrats can can talk of raising taxes in terms once not possible. The new factor is explosive growth in wealth and income inequality.
In the 1970s, my tax law professor, in lectures about the politics of taxation, taught that any increase in federal income taxes, if of significant size, necessarily would fall heavily upon middle and working class people, typically resulting in widespread popular opposition to any such proposal.
He explained his point using what bank robber, Slick Willie Sutton, allegedly said when asked why he robbed banks: It’s where the money is. Back then, the rich didn’t hoard almost all the wealth and preempt almost all the income. It was a time when CEO’s drew pay dozens, not hundreds of times the size of the workers in the shop.
Of course, America always produced Fords, Astors, Rockefellers, Carnegies and other economic titans. Still, until fairly recently, a much larger share of the economy remained in the hands of the more numerous, but less wealthy, who collected most of the paychecks, owned most of the tract homes, and paid most of the income taxes. In the 1970s, and even later when Walter Mondale fell on the sword of higher taxes in 1984, income inequality and wealth inequality had not yet created vast, untaxed caches of American income and wealth.
Today, however, Deutsche Bank reports that stock market highs are helping to mask the extraordinary growth of wealth inequality in the U.S.
The top 0.1% of U.S. households own as many assets as the bottom 90%, according to the report. Deutsche Bank attributes the country’s economic inequality to multiple factors: technological change, trade and financial globalization, labor market institutions, tax policies, and education.
Meanwhile, income inequality has reached historic disparities.
The top 1 percent of families took home an average of 26.3 times as much income as the bottom 99 percent in 2015, according to a new paper released by the Economic Policy Institute, a non-profit, nonpartisan think tank in Washington, D.C. This has increased since 2013, showing that income inequality has risen in nearly every state.
The Trump/GOP Tax Cut, now in its second year of implementation, throws wealth and income inequality into overdrive. This affords the 2020 Democratic candidates an unprecedented opportunity to reverse past framing on taxes and fight for new federal revenue. We can now raise significant revenue without laying a hand on working and middle class taxpayers. Democrats can effectively frame tax increases as Them vs. Us, with a very clear message about who They are, who We are, why They must pay and what They must pay for.
This wouldn’t be quite so true, of course, if the rich ever did the things with their tax cuts that they always promise they will do, things like new factories and equipment, business expansion, job creation. But the rich don’t do that. Most of them spend as much as they can on themselves, then hoard the rest. They hoard most of the income for themselves, too.
They are money hoarders, misers, skinflints, cheapskates, greedy. Culturally, we have long known their faces. They are Ebenezer Scrooge, Scrooge McDuck, and C. Montgomery Burns rolled into a small group of Americans whose day to day lives will never feel the difference, if America decides to implement fairer taxes from now on.
Some Democrats seem to have sensed these new conditions for debating higher taxes. Prominent Democrats are openly discussing wealth taxation, higher top marginal income tax rates, Wall Street transaction taxes and a variety of other reforms that could reinvigorate necessary federal spending while holding the line or even reducing taxes on people of more modest circumstances. Democrats could do well to unify around the idea that, in 2020, when it comes to the 1%, no tax is off the table. The money hoarders are starving America of the means to build a modern nation that 21st Century Americans have earned with unprecedented national productivity.
The only way to really get after America’s serious long term structural problems is to do it all — wealth tax, higher marginal income taxes on super-earners, investment transaction taxes and more inclusive estate taxes can raise record setting new revenues while hardly touching the 99%. Tax the Money Hoarders. Save America.