User Fees Would Force Biden’s Hand
If Republicans controlled Congress, it’s extremely unlikely they’d raise user fees or impose new ones to pay for an infrastructure plan. The federal gasoline tax, which is supposed to cover the costs of the national highway system, is a classic user fee because people who buy gas—drivers—pay into the fund that maintains the roads they drive on. But the gas tax has been stuck at 18.4 center per gallon since 1993, and it’s now too low to cover all the costs it’s supposed to. President Trump supposedly wanted a big infrastructure plan, and his fellow Republicans controlled Congress during the first two years of his presidency. Yet they never mounted a serious infrastructure plan, let alone new user fees to pay for it.
So why do Republicans favor user fees now? Because they would force Biden to break a core campaign promise, damaging him politically. Biden pledged not to raise taxes on households earning less than $400,000 per year, and any user fee applied broadly to the public would violate that pledge. User fees are actually a sensible and proven way to pay for big projects, yet Biden, for better or worse, has effectively ruled them out as a funding source for his ambitious plans.
Americas Top 10 Richest Families
Republicans Cut Taxes For Rich People And Corporations In 2017 Biden Wants To Reverse Course
The full details of what Biden’s tax proposal will look like are still a little fuzzy. According to , which recently reported on the president’s planned tax hikes, much of what he is likely to put forth is in line with what he campaigned on.
On the campaign trail, Biden proposed increasing the corporate tax rate from 21 percent to 28 percent as well as increasing the income tax rate on families making more than $400,000. He proposed changing capital gains taxes — meaning how taxes are applied when someone sells an asset, like a stock — for people making more than $1 million, so that they would be taxed the same as income.
Also on capital gains, Biden proposed overhauling how they are taxed on a “stepped-up” basis after people die. It’s a little wonky, but say you’re Facebook CEO Mark Zuckerberg and a lot of your money is tied up in Facebook stock — your wealth goes up over the years, but as long as you don’t sell the stock, you don’t pay taxes on it. After you die, say $1 billion of the stock gains go to your kids, and they might turn around and sell it later for $1.1 billion. But they would only be taxed for $0.1 billion — the difference between the cost when they got it and when they sold it — not the full $1.1 billion. Biden’s plan would change that.
Ahead of the 2020 election, the Tax Policy Center Biden’s plan would raise $2.1 trillion over a decade. As notes, his White House proposal could be smaller.
The Biden Tax Proposal Is Still In Its Early Days
Biden’s follow-up recovery plan is still taking shape, as are plans to accompany it with taxes. The White House wants to be deliberate in how it goes forward — not just in addressing the immediate issues, but also in making strategic decisions about what’s on the horizon.
“What Biden’s trying to do is to make some long-term structural changes for this economy and the investments that we need to be competitive with China and to really bet on American workers and to pay for some of that,” Bianchi said.
But there are obstacles. For one thing, the US economy is hardly firing on all cylinders: The US economy is still hamstrung by the Covid-19 pandemic, and millions of jobs still aren’t back. There is increasing optimism that between the stimulus package and vaccines, the economy is about to bounce back fast, but that doesn’t make the politics of the issue a walk in the park.
“We’re still in the midst of a recession, and it would be pretty easy to make the argument that this isn’t a great time to be talking about tax increases,” said Leonard Burman, co-founder of the Tax Policy Center and a Syracuse University economist. “If the economy comes roaring back, then it would be the appropriate time to be talking about tax increases.”
Policymakers could have some levers here — perhaps phasing in tax increases, or making sure they’re not put in place until unemployment hits a certain level — but it’s still a tricky situation. After all, 2022 is an election year.
Comparing Republican And Democratic Deficit Policies
In order to make a fair comparison between Democratic and Republican deficit policies, one has to account for the economic conditions that each president encounters in office. It’s possible for one party to be unlucky and have more terms in recession periods, which would make it appear as though that party is more spendthrift.
There are statistical methods allow one to estimate the effect of the party in the presidency on changes in deficits, accounting for other variables that also have an impact on deficits. Such an analysis can be found .
The first step is to get an understanding of which variables are associated with deficits on their own. The chart below shows a sample of those results. The red bars show variables that are associated with increased deficits and the blue shows those that are associated with reduced deficits.
Unsurprisingly, economic growth tends to reduce deficits, as growth improves tax collection and reduces the need for additional government spending. What is surprising is that even at a high level, Democratic presidents are associated with decreased deficits, with a correlation of -32% . This is a greater impact on deficits than the typical increase in the top marginal tax rate.
Overall, the model explains nearly three quarters of the variation in annual changes to budget deficits. The chart below shows changes in deficits predicted by the model, versus what actually happened.
Us Lobby Groups Write Battle Plan To Beat Biden Tax Hikes
U.S. President Joe Biden delivers remarks at the White House at a celebration of Independence Day in Washington, U.S., July 4, 2021. REUTERS/Evelyn Hockstein/File Photo
WASHINGTON, July 6 – U.S. business lobbying groups cheered a bipartisan $1.2 trillion infrastructure deal, but are gearing up to fight the corporate tax hikes looming in a separate but linked spending bill that Democrats aim to pass without Republican votes.
The U.S. Chamber of Commerce, the National Association of Manufacturers, the National Retail Federation and other deep-pocketed lobby groups plan to use the same argument they employed in 2017 to secure huge tax cuts from Republicans: higher corporate taxes equal fewer jobs.
“We don’t know what’s in that package,” Rachelle Bernstein, chief tax counsel for the retail group, said of the Democrats'”reconciliation” bill expected to contain new social spending and tax hikes.
“But we don’t think it is good to use a corporate tax increase to finance spending,” said Bernstein, whose group has spent $1.5 million on lobbying in the first quarter of 2021, according to watchdog OpenSecrets.org.
The Biden administration’s pitch for reducing U.S. economic inequality and competing more effectively with China relies on using tax hikes on corporations and wealthy Americans to pay for some $4 trillion in new spending on transportation, communications, research, renewable energy, childcare, housing, education and healthcare.
LOBBYING FOCUS ON SINEMA, MANCHIN
Jpmorgan: Biden Can’t Deliver
Others take a more pessimistic view about Biden’s ability to muster enough support for higher levies.
“We do not believe that US politics will hurt US stocks in absolute terms, as it is unlikely that Biden will be able to deliver on some potentially market-unfriendly proposals on taxation / Tech regulation,” JPMorgan’s equity strategy team told clients Monday.
“In relative terms though, investor sentiment might be impeded as there is a headline newsflow risk with respect to some of these policies,” they added.
To Bush-era Treasury official Fratto, the strained negotiations between Republicans and Democrats over how to pay for infrastructure are almost nonsensical given how cheap it is to borrow.
“Borrowing has been cheap for a long time. It is exceedingly cheap now, and it’s not clear that that is going to change,” he said. “When you don’t have that pressure of the ever-increasing cost of your debt, the pay-for arguments get to be really hard.”
Between the Federal Reserve’s easy monetary policies and robust demand for U.S. debt around the world, interest rates on American bonds have fallen for much of the past decade. The rate on the 10-year Treasury note, which traded north of 6% in 2000, was last seen around 1.3% after wallowing under 1% for much of 2020.
But Fratto isn’t the only one who sees untapped potential in the market for sovereign debt.
— CNBC’s Michael Bloom contributed reporting.
Biden Says The Wealthy Should Pay Their Fair Share In Taxes
The White House is trying to build on the public popularity of Biden’s plans to raise the corporate tax rate to 28 percent and the top tax rate to 39.6 percent. A Quinnipiac University poll conducted last month found that support for Biden’s $2 trillion infrastructure and jobs plan grows by 9 points if it is attached to a corporate tax increase. By 2-to-1 ratios, respondents said they support higher taxes on corporations and on people earning more than $400,000 a year.
Some Democrats want to lean in to the tax fight, seeing it as an opportunity to exploit the dissonance between the GOP’s working-class message and its policy alignment with wealthy Americans — an extension of their campaign against the 2017 tax law Republicans passed on party-line votes.
For Democrats, the longevity of the tax increases — and potentially the economic programs they’re designed to finance — could hinge on making the higher taxes so popular that Republicans would fear a backlash if they cut them in the future.
“At a time of again massive income and wealth inequality, it is appropriate that the rich start paying their fair share,” said Sen. Bernie Sanders, I-Vt. “That can raise the revenue that we need to fund programs that working families desperately need.”
Democrats Are Having The Wrong Debate About Taxes
If you really want Medicare for All and a Green New Deal, you need to think differently about how to pay for them.
To judge by the 2020 campaign, you’d think that if there’s one thing the Republicans and Democrats disagree about, it’s taxes:Elizabeth Warren’s signature issue is a wealth tax, Bernie Sanders wants to increase the estate tax, Joe Biden is targeting a tax loophole for wealthy heirs and others want to raise corporate taxes, capital gains taxes or marginal tax rates. Tonight’s Democratic debate is likely to feature candidates haggling over the best way to increase taxes on the rich. Meanwhile, Donald Trump’s main policy achievement has been precisely the opposite:a tax cut for the wealthy, which many Democrats want to repeal.
But over the past four decades, a series of Republican and Democratic administrations have together produced what adds up to one continuous American tax policy.When Republicans come into office they cut taxes for everyone, although more for the wealthy, and when Democrats come into office they raise taxes on the wealthy and sometimes cut taxes for everyone else. Overall, this long-term American tax policy is to continuously cut taxes on the middle class and the poor, while intermittently asking rich people for more money.
Does this situation actually cause any harm? Why shouldn’t taxes keep going down for the bottom 80 percent, and fluctuate for the top 20 percent?
Which Party Is The Party Of The 1 Percent
First, both parties receive substantial support. Much of it comes from registered voters who make $100K+ annually. However, Democrats actually come out ahead when it comes to fundraising for campaigns. In many cases, Democrats have been able to raise twice as much in private political contributions. But what about outside of politicians? Does that mean Democrats are the wealthier party? Which American families are wealthier? Republicans or Democrats?
Honestly, it is probably Republicans. When it comes down to it, the richest families in America tend to donate to Republican candidates. Forbes reported out of the 50 richest families in the United States, 28 donate to Republican candidates. Another seven donate to Democrats. Additionally, 15 of the richest families in the U.S. donate to both parties.
Bernie Sanders Accuses Gop Of Attempting To ‘increase Taxes On Working Families’
Senator Bernie Sanders, a progressive independent from Vermont, accused Republican colleagues of attempting to “increase taxes on working families,” as they continue to negotiate with and President Joe Biden over the administration’s proposed American Jobs Plan.
Biden and Democrats have been holding talks with Republican lawmakers over a series of infrastructure proposals included in the president’s American Jobs Plan. Although Biden’s initial plan was estimated to cost more than $2 trillion, have suggested they’d be willing to compromise and pass something costing $600 to $800 billion. However, it appears that both sides remain far apart when it comes to how to cover the cost of the infrastructure legislation.
“Unbelievable but true: The same Republicans who voted for trillions in tax breaks for the top 1% and large corporations, now want to increase taxes on working families through user fees, more toll roads and higher gas taxes while cutting Social Security, Medicare and Medicaid,” Sanders, who caucuses with Democrats and serves as the chair of the Budget Committee, tweeted on Saturday.
Unbelievable but true: The same Republicans who voted for trillions in tax breaks for the top 1% and large corporations, now want to increase taxes on working families through user fees, more toll roads and higher gas taxes while cutting Social Security, Medicare and Medicaid.
— Bernie Sanders May 15, 2021
Narrow Margins Shifting Politics Shape Partys Choices As It Considers Raising Taxes On Corporations And On Those With High Incomes
WASHINGTON—Democrats face a daunting task: turning years of talking about raising taxes on corporations and high-income Americans into legislation that can get through razor-thin congressional majorities and onto President Biden’s desk.
As top Democrats design a roughly , and a second, broader antipoverty package in coming months, they need to resolve differences over the amount of spending, how much must be paid for, and which of Mr. Biden’s proposed tax increases should advance. After meeting with senior administration officials on Thursday, the tax committee chairmen in Congress said lawmakers would make those decisions over the next several weeks.
“We’re going to build the plan, figure out what people want, what they’re willing to pay for, but also not to be deterred,” House Ways and Means Chairman Richard Neal , said in an interview Friday. “There’s this moment, when we’re talking about Great Society achievements and we’re talking about New Deal achievements. This is it.”
Democrats raised taxes each of the last two times they controlled the government—in 1993 and 2010—after bruising political battles that drew objections from moderates inside the party.
The Trump Tax Reform Conspicuously Targeted High
New York Governor Andrew Cuomo has always been more reluctant than other Empire State Democrats to soak the rich—just last summer he warned that raising taxes on the state’s billionaires would mean they’d “.” But last week he agreed to a budget deal that boosts state income tax rates on millionaires and would leave New York City’s richest paying the highest combined state and local income tax rate in the nation—14.8% on income above $25 million. New York hadn’t held that dubious title since 2012, when California voters hit millionaires with a 13.3% rate.
Cynics might suggest that Cuomo caved now because he’s been politically weakened by allegations he sexually harassed subordinates and misled the public about the number of Covid-19 deaths among nursing home residents. But the Governor himself offered another explanation for his change of heart: taxes for the richest New Yorkers will actually go down. Huh?
While attention has focused on Biden’s plan to raise federal taxes on and earning more than $400,000, another tax war has been raging around the country—and is itself affecting Washington maneuvering. According to data collected by the Urban Institute, between April and December of 2020, a majority of states collected less tax revenue than in the year before, even as the pandemic put increased demands on their budgets. The five hardest hit states—Alaska, Hawaii, North Dakota, Nevada and Florida—are heavily dependent on tax revenue from either oil or tourism.
Here’s How The Deficit Performed Under Republican And Democratic Presidents From Reagan To Trump
This article was updated Aug. 2 to include a graph with the annual federal deficit in constant dollars.
A viral post portrays Democrats, not Republicans, as the party of fiscal responsibility, with numbers about the deficit under recent presidents to make the case.
Alex Cole, a political news editor at the website Newsitics, . Within a few hours, several Facebook users of the tweet, which claims that Republican presidents have been more responsible for contributing to the deficit over the past four decades.
Those posts racked up several hundred likes and shares. We also found , where it has been upvoted more than 53,000 times.
“Morons: ‘Democrats cause deficits,’” the original tweet reads.
Reagan took the deficit from 70 billion to 175 billion. Bush 41 took it to 300 billion. Clinton got it to zero. Bush 43 took it from 0 to 1.2 trillion.Obama halved it to 600 billion. Trump’s got it back to a trillion.Morons: “Democrats cause deficits.”
— Alex Cole July 23, 2019
Screenshots of the tweet on Facebook were flagged as part of the company’s efforts to combat false news and misinformation on its News Feed.
At PolitiFact, on how Republicans and Democrats often try to pin the federal deficit on each other — muddying the facts in the process. So we wanted to see if this Facebook post is true.
Some people confuse the federal deficit with the debt — but they’re two separate concepts.
The federal debt is the running total of the accumulated deficits.
How Dems Learned To Stop Worrying And Embrace Tax Hikes
Democrats believe raising taxes is no longer a noxious political proposition, thanks to shifting attitudes about soaking the rich.
05/17/2021 04:30 AM EDT
President Joe Biden and congressional Democrats are taking a big gamble: that raising taxes can be popular.
As discussions heat up about how to pay for trillions in new spending on infrastructure, Biden and his party want to hike taxes on the wealthiest Americans and on companies that have evaded federal taxes for years. Poll after poll shows those proposals are broadly popular with voters, particularly amid a deadly pandemic that’s exacerbated the nation’s already stark economic divisions.
While Democrats acknowledge that touting a tax hike — even if it’s just for top earners — carries risk, they see a dramatic shift in the politics of taxing the rich that they’re ready to use to their benefit.
The public has “seen billionaires get richer, corporations get richer during the pandemic, while they’re suffering,” said Rep. Pramila Jayapal , chair of the Congressional Progressive Caucus. “So I think that’s what we have to continue to lean into.”
“Open borders, higher taxes, deficit spending. … If we’re not careful, we’re giving them all the narratives to campaign against us,” said swing-district Rep. Henry Cuellar . Even so, he backed the overall approach to taxation: “I agree that everybody needs to pay their fair share.”
Rep. Henry Cuellar . | Alex Brandon/AP Photo
- Filed Under:
Views Of Stricter Environmental Laws Climate Change
On environmental issues, 65% of adults say that stricter environmental laws and regulations are worth the cost, compared with 33% who say they cost too many jobs and hurt the economy.
A large majority of Democrats and Democratic leaners say stricter environmental laws are worth the cost, including 92% of liberal Democrats and 79% of conservative and moderate Democrats.
Republicans and Republican leaners are more likely to say stricter environmental laws cost jobs and hurt the economy than that they are worth the cost . However, there is a wide divide in views among Republicans by ideology. Two-thirds of conservative Republicans say stricter environmental laws hurt the economy. Views among moderate and liberal Republicans are nearly the reverse: 60% say stricter environmental laws are worth the cost.
Majorities across age groups and levels of educational attainment say stricter environmental laws are worth the cost. Adults younger than 30 and those with a postgraduate degree are among the most likely to say this.
As other surveys have found, there also continue to be wide partisan differences in opinions about climate change. Among the public overall, 52% say the Earth is getting warmer mostly because of human activity, while 17% say it is getting warmer mostly due to natural patterns in the environment. About two-in-ten say there is no solid evidence that the Earth is getting warmer, and 9% say they are not sure.
Idea To Raise Revenue From High
WASHINGTON—President Biden’s push to sharply raise taxes on capital gains for high-income households to help pay for his antipoverty program faces skepticism from some fellow Democrats, who say they are concerned higher rates could slow economic growth.
As part of a $1.8 trillion package released Wednesday, Mr. Biden is proposing a series of tax increases on wealthy Americans. He wants to raise the top income-tax rate to 39.6% from 37%, while also raising the capital-gains rate to 43.4% from 23.8% for households making more than $1 million. The plan would also change how capital gains are taxed at death and provide more funding to the Internal Revenue Service to collect more taxes owed.
“For me, it is what you’re doing, the totality of the package, and how does it affect the ability of growth to continue to take place. That’s how I’m judging it. Right now it seems like a rather high rate to me,” said Sen. Bob Menendez , a member of the Senate Finance Committee, of the proposed capital-gains rate. New Jersey has one of the highest median household incomes in the U.S.
As they did with separate corporate-tax increases Mr. Biden proposed earlier this year, Republicans have lined up against the capital-gains changes, arguing that they would hurt the economy while it is still recovering from Covid-19.
The Income Tax Arrives
19011902190419061907 1908 190919101913A hand from Washington will be stretched out and placed upon every man’s business; the eye of the Federal inspector will be in every man’s counting house . . . The law will of necessity have inquisitorial features, it will provide penalties, it will create complicated machinery. Under it men will be hailed into courts distant from their homes. Heavy fines imposed by distant and unfamiliar tribunals will constantly menace the tax payer. An army of Federal inspectors, spies and detectives will descend upon the state . . . Who of us who have had knowledge of the doings of the Federal officials in the Internal Revenue service can be blind to what will follow? I do not hesitate to say that the adoption of this amendment will be such a surrender to imperialism that has not been since the Northern states in their blindness forced the fourteenth and fifteenth amendments upon the entire sisterhood of the Commonwealth.1914-19151916 19171918-1919Audio clip: McAdoo on the need for tax reduction, probably 1919. 1920 Audio clip: George White, on Republican tax promises 1921 Andrew Mellon19241926against 19281929-1932whether