How poverty and inequality are motivating Democrats on tax policy

How poverty and inequality are motivating Democrats on tax policy


JUDY WOODRUFF: Tonight: the first in our new
series examining the policy positions of the ever-growing crop of 20 presidential contenders. Lisa Desjardins begins our coverage with a
look at the range of tax plans being pushed on the campaign trail. LISA DESJARDINS: Front and center on the 2020
Democratic campaign trail, widening economic divide. SEN. KAMALA HARRIS (D-CA), Presidential Candidate:
Reversing this administration’s giveaways to the top big corporations and the top 1
percent. (CHEERING AND APPLAUSE) LISA DESJARDINS: It is a twofold push. Candidates’ are outlining new plans to reduce
poverty and blasting the Republican tax cuts, especially the corporate cuts, as giveaways
to the rich. SEN. BERNIE SANDERS (I-VT), Presidential Candidate:
It is not moral, it is not acceptable, and it is not sustainable that the top one-10th
of 1 percent now owns almost as much wealth as the bottom 90 percent. LISA DESJARDINS: Vermont Senator Bernie Sanders,
newly announced as a presidential candidate, sparked this latest drive in his 2016 run. He wants to provide universal health care,
as well as free preschool and free tuition at public colleges. He’d raise money for that by raising estate
taxes on any inheritance over $3.5 million, with a top rate of 77 percent tax at $1 billion. SEN. ELIZABETH WARREN (D-MA), Presidential Candidate:
We can’t afford to just tinker around the edges, a tax credit here, a regulation there. Our fight is for big structural change. LISA DESJARDINS: Massachusetts Senator Elizabeth
Warren would transform the cost of child care. She’d make it free for low-income families
and cap it at much lower than current costs for most everyone else. Warren would pay for that with a first-of-its-kind
2 percent tax on overall wealth or net worth above $50 million. SEN. ELIZABETH WARREN: And an ultra-millionaire’s
tax to make sure that rich people start doing their part for the country that made them
rich. LISA DESJARDINS: There is more. SEN. KAMALA HARRIS: We will deliver the largest
working and middle-class tax cut in a generation. LISA DESJARDINS: California Senator Kamala
Harris proposes a more classic middle- and lower-class tax cut. Anyone making less than $50,000 a year, would
see a $3,000 tax credit. It’d be twice that for families. Her pay plan? Eliminate some current Republican tax cuts. One thing Harris, and another presidential
candidate also tackle housing and rent. SEN. CORY BOOKER (D-NJ), Presidential Candidate:
We need a lot of change from our tax laws, making them more fair, to ending things like
carried interest. LISA DESJARDINS: New Jersey senator Cory Booker’s
plan would give a tax credit to those whose income goes disproportionately to rent. He’d also provide a $1,000 savings bond to
each child every year until they turn 18. Booker would raise the current estate tax. JULIAN CASTRO (D), Presidential Candidate:
I can support folks at the top paying their fair share. LISA DESJARDINS: Julian Castro, the former
housing and urban development secretary under President Obama, has backed an idea by New
York Congresswoman Alexandria Ocasio-Cortez to return to pre-1980s individual tax rates,
with incomes over $10 million taxed at 60 to 70 percent. That tax is now capped at 37 percent. New York Senator Kirsten Gillibrand’s campaign
also says she’s interested in pursuing higher taxes on the rich. SEN. AMY KLOBUCHAR (D-MN), Presidential Candidate:
It is time, America! LISA DESJARDINS: Meanwhile, centrist Minnesota
Senator Amy Klobuchar takes a different approach. She would close what she sees as tax loopholes
for the rich, but otherwise believes her fellow Democrats are going too far. SEN. AMY KLOBUCHAR: I am not for free four-year
college for all, no. If I was a magic genie and could give that
to everyone and we could afford it, I would. LISA DESJARDINS: In a crowded field of Democratic
candidates, a rigorous and broad debate over wealth. For more, we turn to Philip Bump of The Washington
Post. And, Philip, let me just start right away
with, why do you think all of these plans are happening now? PHILIP BUMP, The Washington Post: Well, we’re
talking about a Democratic electorate which, over the course of the past two decades, and
even over the course of the last five years or so, has grown increasingly liberal. This is an electorate that that will be voting
in the Democratic primaries which wants to start bold talk on things like raising taxes
for the wealthiest Americans. This is a very different electorate than went
to the polls in 1992 and brought Bill Clinton to the White House, and who then sort of took
a middle-of-the-road strategy towards governance. This is not what Democrats now want to see. And the Democrats who have jumped into the
race already are very cognizant of that. LISA DESJARDINS: This is a broad spectrum
of ideas, all dealing with wealth, some with rentals and housing, some with child care,
others with education. How do you group these plans in a way to try
and conceptualize the important differences here? PHILIP BUMP: Well, I think there are a series
of plans which really put a focus on where the revenue is generated from, right? So we see things like Senator Bernie Sanders’
proposals around the estate tax. We see Senator Elizabeth Warren’s proposal
on taxing income. We see these various proposals that are focused
on where the revenue comes from. And we see a lot of proposals as well, including
some from Sanders and Warren, which focus on what the benefits would be, the result
from that revenue increase. We see people like Senator Kamala Harris who
put an emphasis on what the programs are first, and then talk a little bit about where some
of the additional revenue would come from after the fact. So there — it really is sort of a bidirectional
strategy. And I think that the thing that we’re not
used to seeing — we’re very used to see proposed programs. We’re very used to seeing proposed tax cuts
for the middle class, such as Harris’ before. What we’re less used to seeing in presidential
politics is really bold and aggressive talk about taxing the richest Americans at a higher
rate. That, I think, is unusual. And I think that’s new to this primary season
to some extent too. LISA DESJARDINS: Right. And what do we know about the appeal of that
to the American voter? PHILIP BUMP: I mean, Americans broadly would
like to see rich people pay more in taxes, right? I mean, this is something that Gallup has
been polling on for decades. And, consistently, people think the richest
Americans don’t pay their fair share of taxes. Now, the problem is, once you start actually
talking about what that means, once you actually start putting forward proposals about taxation,
it gets a lot murkier pretty quickly. So, for example, if you take Representative
Alexandria Ocasio-Cortez’s his proposal to — it was sort of a suggestion. I shouldn’t even really say a proposal, but
her suggestion that you tax people who have $10 million in income or more annually at
70 percent. That’s something that actually doesn’t poll
that well. While you can ask people, do you think people
who earn $10 million or more a year should see higher taxes, people — yes, broadly. A FOX News poll shows that that sort of taxation
is very popular. But a very specific proposal like because
Ocasio-Cortez’s doesn’t fare as well because people start considering the numbers. So, that said, I think it is the case that
some of these proposals that are being put forward that really do narrow pretty specifically
on the wealthiest Americans are going to be ones that the Democratic base can embrace. LISA DESJARDINS: Philip Bump, a big question
with just a little bit of time left. It’s been sort of a rule of American politics
for decades that you don’t propose a tax increase. Whether or not these candidates are successful
becoming president, is that rule potentially up for changing? Do we see sort of a sea change here in atmosphere? PHILIP BUMP: Yes, I mean, I think it may be,
in part because the Republicans, after years of talking about slashing taxes, were actually
able to do so in 2017. So Americans have seen that sort of proposal
go into effect in a way that is fairly novel in recent years. And they have seen what the effects of that
have been. We have seen, for example, revenue from corporations
drop pretty substantially between 2017 and 2018. Those are the sorts of things that Americans
can now look at and say, OK, these are — we know what that change looks like that may
make them more open to other changes in tax code. And, again, I can’t reinforce this enough. In the abstract, Americans really like the
idea of rich Americans paying more in taxes. It’s just whether or not a candidate can find
that sweet spot of a particular policy proposal that appeals both to Democrats in the primary
and Americans more generally during the general election. LISA DESJARDINS: In about a year or so, we
should find out. PHILIP BUMP: That’s exactly right. LISA DESJARDINS: Philip Bump, thank you very
much.

Author: Kennedi Daugherty

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