Democrats hope to seize populist momentum in 2020 with an economic agenda in their wheelhouse: Raising taxes on the wealthy.
With new polling showing support for taxes on high earners and the relative unpopularity of the 2017 GOP tax overhaul, candidates for the Democratic presidential nomination are competing with each other on this populist issue.
Sen. Elizabeth Warren, D-Mass., has proposed a new wealth tax of 2 percent on households with total assets above $50 million, with a surtax on households worth above $1 billion. Sen. Kamala Harris, D-Calif., has called for repealing the Trump tax cuts for those making over $100,000 per year and creating a new tax on banks with assets over $50 billion in order to pay for refundable tax credits to lower- and middle-class workers.
Sen. Bernie Sanders, I-Vt. — not a declared candidate — has proposed raising the estate tax to 77 percent for billionaires and boosting it from its existing levels for smaller estates.
Meanwhile, overnight celebrity freshman Rep. Alexandria Ocasio-Cortez, D-N.Y., has touted a 70 percent tax on income above $10 million per year. Ocasio-Cortez is too young to run for president, but her endorsement of much higher marginal tax rates is likely to help move the Democratic field to the left.
Recent polls suggest that the electorate could be receptive to these proposals. A Fox News poll conducted in late January found that 70 percent of registered voters favor increasing taxes on those making more than $10 million per year — the income threshold advocated by Ocasio-Cortez, a self-described socialist. An early February poll from Politico/Morning Consult found 61 percent of registered voters favor Warren’s proposed wealth tax.
“We’ve crossed a threshold in the way that Americans think about taxing the wealthy because voters across the political spectrum are feeling greater financial pressure in the global economy, and they’re realizing how vulnerable working and middle-class people can be due to no fault of their own,” said Andrew Bates, communications director for the Democratic political action committee American Bridge. “That neuters the traditional Republican arguments against it.”
Republicans aren’t convinced the political ground has shifted beneath them, with some ridiculing the idea.
“‘Oh, the rules have changed, previous elections don’t matter anymore’ … That’s exactly what Democrats told themselves in 1992, 1993, 1994, 2010,” scoffed anti-tax advocate Grover Norquist.
“That’s a typical Democratic position on that issue, and I don’t think it has any more traction than it had before,” said Sen. Mike Crapo, R-Idaho, with a laugh.
Sen. Tim Scott, R-S.C., who serves with Crapo on the Senate Finance Committee that writes tax law, welcomed a debate on taxing the rich.
“There’s no doubt that the Left wants to drag the center to the Left, and that’s what you’re seeing here,” said the South Carolina Republican. “My response to that is that when you start taxing the wealthy, what you’re actually taxing are the jobs that would be created from that wealth.”
Scott saw the argument as one that Republicans would easily win in 2020, arguing that even the major tax hikes on the wealthy that Warren and Ocasio-Cortez propose would not raise enough to pay for the new healthcare and green energy programs that progressive activists desire. “I look forward to that one,” he said.
Not every Democrat eyeing a presidential run has fully embraced the rhetoric of populist wealth redistribution. Sen. Sherrod Brown, D-Ohio, who recently won re-election in a state that Trump won in 2016, declined to discuss raising taxes on the wealthy.
“I’m not talking about those issues,” Brown said. Instead, he touted his proposals to expand child tax credits and create a new credit for corporations that keep jobs in the U.S. with minimum hourly wages of $15 plus benefits. “My interest, more than what we do on tax rates, is what we do for the middle class in putting more in their pockets,” he elaborated.
Added Brown: “That’s the way to govern, and that’s the way to run.”
