Real Rich people and Giant companies in America do NOT pay taxes ….
THAT isn’t gonna change much anytime soon….
he Hill, a newspaper covering Congress, reports that business lobbyists are pleased that they have watered down President Biden’s proposed tax increases on corporations and wealthy individuals. One source, identified as “a lobbyist with ties to Senate Democrats,” tells The Hill, “The business community has made progress with certain Democrats on legitimate policy concerns with some of these proposals and their implications on the economy and international competitiveness.”
What are those policy concerns that have successfully swayed moderate Democrats? The article does not specify. We have the lobbyist’s assurance that they are “legitimate.” Though this may come as a shock, there is no actual requirement that lobbyists only advance legitimate policy concerns. They are perfectly free to advocate completely self-interested policy concerns as well. Indeed, this unsavory practice has been known to happen from time to time.
What’s more, if the business lobbyists did happen to be pushing bad policy arguments simply because those arguments benefited the people who pay them, they probably wouldn’t admit this to a newspaper. Instead, they would likely claim in public that their policy concerns are beneficent, even if they are, in fact, utterly venal.
I don’t mean to pick on The Hill, a paper that has supplied coverage of the Biden agenda that is in many ways superior to that found in bigger publications. Media catering to Capitol Hill insiders, like The Hill, have at least paid close attention to a significant development that has gained only fleeting notice in broader venues: Moderate Democrats have slashed President Biden’s progressive tax agenda.
Biden campaigned on a proposal to increase taxes on the wealthy by roughly $3.5 trillion over a decade. Nobody in Washington currently believes he will sign a tax hike anywhere close to that magnitude. The current predictions floating around — Politico’s tax newsletter is one publication that has used this estimate — peg the total at around a trillion, give or take.
The most striking thing about the decision by moderate Democrats to scale back Biden’s plan by some three-quarters is that we have no idea what the rationale is.
According to The Hill, the lobbyists have argued that Biden’s plan “would slow the U.S. recovery from the coronavirus recession.” It’s not clear what basis they have for this conclusion. If mainstream economists believe Biden’s tax hikes would imperil the recovery, they aren’t saying so publicly. (As economists like Larry Summers did when they loudly warned that Biden’s rescue plan would overheat the economy.)
When the conservative American Enterprise Institute ran the numbers on Biden’s full tax-increase proposal, it found a negligible effect on economic growth: reducing GDP 0.16 percent over the next decade, increasing GDP by 0.19 percent in the following decade, and reducing it by 0.18 percent over the longer run. All those numbers are so tiny they are rounding errors, tantamount to zero….
Since budget rules require any permanent costs be paid for, and Biden doesn’t want to increase taxes on households earning less than $400,000 a year, the size of his domestic policy legacy will be determined by how much new taxes on the rich he can get through Congress. His proposal is perfectly ample to finance a historic legacy. A handful of moderate Democrats are starving that legacy very, very quietly. If they had good reasons for their position, you would probably know what they were.
Update: Axios’ Hans Nichols reports that the Congressional Democratic bill is likely to jettison several Biden proposals. Rates on corporate income and capital gains will rise, but less than Biden proposes. “An increase in estate taxes now looks unlikely… Raising the capital gains rate is facing the most internal opposition, and it could end up staying at its current 23.8%.”….