All of a sudden, it is becoming politically viable, or even advantageous, to fight for some strategy designed to:
1) reduce wealth inequality or
2) Reduce income inequality, while
3) Generating additional revenue to reduce the Federal deficit in ways that will generate the capacity to support additional programs that the nation needs, including infrastructure and/or a universal health insurance program, and/or a minimum basic income that deals with job losses from technological change, including AI.
Indeed, I suspect very strongly that it will not be possible to win the Democratic presidential nomination WITHOUT championing a strategy for reducing the growing income and/or wealth disparities.
This is a spectacular political transition that didn’t exist to the same degree even a month ago, and I don’t think it’s going away-- i.e., it will be a significant part of the 2020 electoral campaign, no matter who becomes the Democratic presidential candidate, and it will spill over into Senatorial, House and local elections. In other words, it is a sea change that is very likely going to transform the entire framework of American politics.
Several important articles yesterday reinforced the momentum in that direction:
The first is an editorial—not an op-ed—in the Washington Post.
www.washingtonpost.com/...
BERNIE SANDERS’S ESTATE TAX PLAN WOULD REDUCE THE FEDERAL DEBT AND HELP EVEN THE PLAYING FIELD.
Mr. Sanders wants to roll back the GOP reform — and more. He would insist that estates worth more than $3.5 million pay at least 45 percent on money over that threshold, with higher tax brackets scaled to the size of the fortune in question. The rate would be 77 percent — the top rate from 1941 to 1976 — on estates worth more than $1 billion. Because such a plan would spur estate planners to seek legally creative ways to avoid inheritance taxes, Mr. Sanders would also close some loopholes currently used as tax avoidance vehicles. Mr. Sanders estimates that his plan would raise $315 billion over a decade.
That revenue is badly needed. Federal debt as a share of the economy has spiked. Rising generations face huge challenges paying for the health care and pensions of their retiring parents. Meanwhile, the very wealthiest Americans have done extremely well in recent decades, with a drift toward an ever-higher concentration of national wealth at the top. Weak inheritance taxes have contributed to this trend. Critics charge that the estate tax taxes income twice, first when it is earned and second when it is inherited. Yet it also serves as a backstop against avoidance of other types of taxation, in which the wealthy excel.
I doubt that the threshold will start as low as the Sanders plan, and I don’t believe that it should, personally. Nevertheless, the idea of more progressivity in the Federal tax code in some form is coming hard, I think.
The Times went there, too, in an op-ed by by David Leonhardt:
Opinion
WHAT’S REALLY RADICAL? NOT TAXING THE RICH
It’s time to reverse the extreme upward redistribution of the last 40 years.
Over the sweep of history, the main reason that societies have declined, as the scholars Daron Acemoglu and James Robinson have written, is domination “by a narrow elite that have organized society for their own benefit at the expense of the vast mass of people.” The name of Acemoglu’s and Robinson’s book on this phenomenon is, “Why Nations Fail.”
It’s worth keeping all of this in mind when you hear critics (or journalists) describe the economic proposals of the Democratic presidential candidates as “radical.” They’re not radical, for the most part. The proposals are instead efforts to undo some of the extreme economic changes of recent decades and to ensure that most Americans workers — not just a narrow elite — fully benefit from economic growth
The Times also had a news article on this focused on reinforcing Social Security:
www.nytimes.com/...
DEMOCRATS PUSH PLAN TO INCREASE SOCIAL SECURITY BENEFITS AND SOLVENCY
After years of Republican-led debate over how to pare back Social Security’s rising costs, Democrats are flipping the script with an ambitious plan to expand the New Deal-era social insurance program while making gradual changes to keep it solvent for the rest of the century.
The Social Security 2100 Act, which was introduced this past week in the House and the Senate, represents a sea change after decades dominated by concern that aging baby boomers would bankrupt the government as they begin drawing benefits from Social Security and other entitlement programs. It would be the first major expansion of Social Security since 1972 and the most significant change in the program since 1983, when Congress stepped in to avert a financial crisis by raising taxes and the eligibility age for Social Security.
The bill would provide an across-the-board benefit increase equivalent to about 2 percent of the average Social Security benefit. It would raise the annual cost-of-living adjustment to reflect the fact that older Americans tend to use more of some services like health care. And it would increase the minimum benefit to ensure that workers with many years of low earnings do not retire into poverty.
And, of course, there was this:
www.nbcnews.com/…
Senator Elizabeth Warren’s plan to impose a wealth tax on fortunes larger than $50 million enjoys net support across party lines, according to a new poll by a progressive analytics firm.
Data For Progress, a research group that’s been testing opinion on a variety of left-leaning policy proposals, commissioned an online survey of Warren’s plan through pollster YouGov Blue.
The survey of 1,282 registered voters asked “Would you (support or oppose/oppose or support) imposing a 2% tax on the assets of those with a net worth over $50 million and a 3% tax on the assets of those with a net worth over $1 billion?”
Sixty-one percent of respondents said they supported the proposal, with 46 percent “strongly” supporting it. Twenty-one percent opposed the idea, with 15 percent doing so “strongly.” The rest were unsure or neutral.
Notably, a plurality of Republicans supported Warren’s wealth tax by a 44-37 margin. Independents supported it by a 61-23 margin while Democrats went for it 76-6.
“We polled Warren’s exact proposal and it’s overwhelmingly popular, even among Republicans,” Data For Progress founder Sean McElwee said in an e-mail. “It’s time for centrists to embrace bipartisan solutions that can unite all Americans, and expropriating the wealth of billionaires is a great place to start.”
It’s not a nonpartisan source, so take it with a grain of salt, and keep an eye out for more polling from independent outlets.
That said, the results don’t appear to be wildly out of line with other recent surveys on taxing the rich, an idea that typically polls well.
Earlier this week, a poll by The Hill-HarrisX on a proposal by Rep. Alexandria Ocasio-Cortez, D-N.Y. to tax income over $10 million at a 70 percent rate found strong support across party lines as well. That survey found 59 percent of registered voters supported the proposal including a substantial portion of Republicans, who opposed it by just a 55-45 margin.
So, whether this is posited as a more progressive income tax, or taking back part of the ridiculously generous corporate tax cut, or a wealth tax or an estate tax, or support for a health or social security system, all of a sudden, it is becoming part of the political landscape in ways that actually have political support that goes beyond just Democrats. The momentum includes AOC and Kamala Harris as well, of course. This is a massive deal, and I don’t think it's going away. Ever again.