Castro targets richest of rich with tax plans
WASHINGTON — Julián Castro offered an economic plan Thursday in his pursuit of the Democrats’ 2020 presidential nomination, proposing to end the GOP-drawn income tax system passed in 2017 and restore an inherited wealth tax that strikes at the concentration of economic and political power held by the richest Americans.
Castro’s left-leaning set of policy proposals includes a “wealth inequality tax” on the richest one-tenth of 1 percent. His plan hikes capital gains taxes, reduces taxes on low-income and middleincome families via tax credits and raises the minimum wage to $15 — a plan currently stalled in the Senate.
The economic package also calls for federal grants to states and local entities ensuring that families would pay no more than 7 percent of their income for child care.
“We know today that in our country there are a lot of families that are working hard but not getting ahead the way they would like to, the way they ought to be or the way that they used to be in years past,” Castro said, speaking on a conference call from Iowa.
“Today, far too many families, even if they’re working full-time jobs, they’re hardly able to afford the rent that continues to rise or to provide for health care costs or to save up for a decent retirement,” he said. “At the same time, we have growing concerns about the fact that too many families can’t afford child care or pre-K to assure that the next generation can do better than the last.”
Castro’s economic plan includes initiatives from earlier policy papers, such as grants to established prekindergarten education — which he championed as San Antonio mayor — and a renter’s tax credit aimed at the shortage of available, affordable housing.
The “People First Economic Plan for Working Families” is Castro’s latest in a series of detailed policy proposals that in many cases exceed the scope of what rivals in the Democratic contest have offered. Castro told reporters that his plans both for the inheritance tax and what he calls the wealth inequality tax “break new ground” in the race.
Thus far, Castro’s policy offerings have not transferred to success in the polls that is critical for Democrats hoping to survive the national party’s winnowing process in time for the next round of debates, scheduled for Houston Sept. 12-13.
Castro has met one of the criteria — 130,000 unique donors — but lacks completion of the second, at least 2 percent in four qualifying polls.
“We have until Aug. 28 and we’re working hard to make sure we get that fourth poll to qualify the Houston debate, and I believe that we will do that,” Castro said, responding to a question. “We’ve been out there traveling around a lot to the early states and being bold in our plans, not only in this economic plan but with a number of other issues, so I’m confident I’m going to be there.”
On Wednesday, Castro sought to raise his profile by running a hard-edged television ad on a Fox channel near where President Donald Trump is vacationing in New Jersey that blames the president for the mass killing in El Paso this month.
“Americans were killed because you stoked the fire of racists,” Castro says to the camera.
Asked about response to the ad, Castro said: “I hope he saw it. I don’t know for sure whether he did or not. Mostly, people have said that what I said in that ad needs to be said — that words have consequences. He needs to realize that, and he needs to fulfill the role of a president, which is trying to heal the country instead of rip the wounds open again and again.”
Speaking of his economic plan, Castro said that for 99 percent of Americans, taxes would go down or remain the same.
“However, for those at the very top, we would expect them to pay more,” he said.
Changes a decade ago minimized the impact of estate taxes. According to the nonpartisan Tax Policy Center, fewer than 2,000 of the wealthiest people pay estate tax annually because of large exemptions. The tax is assessed only on estates of $11.4 million, or $22.8 million for married couples.
Castro proposes replacing the separate estate and gift taxes with a unified inheritance gift tax. Under his plan, the first $2 million would be not be taxed, but inherited wealth beyond would be subject to federal income and payroll taxes.
Castro repeatedly sounds the theme of inequality in his plan, spelled out in the online platform Medium.
“The wealthy few have set up the rules to work for themselves, while working families who labor for a living are left behind. Our economy has changed with technology and automation, but our policies have not kept pace to empower working families with a fighting chance for a better future,” he writes.
“Why, in the richest nation on Earth, should we tax work more than wealth?” he asks.
Castro’s plan aims at people with roughly $40 million or more in assets by assessing capital gains tax annually on investment income regardless of whether investments are sold.
His proposed increase in the capital gains tax to correspond to peoples’ income tax brackets also strikes at the wealthy. The capital gains tax — the levy on the difference between the sale price and purchase price of capital asset — at present is 0, 15 percent or 20 percent; the income tax rate for the wealthiest is 37 percent.
Castro’s plan would combine the popular Earned Income Tax Credit and Child Tax Credit into a new Working Families Tax Credit, which would include a boost in the tax savings for children from $2,000 to $3,000 for each child.
Castro has said while spelling out costly policy proposals in recent months that he would pay for them by repealing the new income tax system engineered by a Republican-held Congress in December 2017.
“There are a very, very few aspects of the Trump tax bill that people have pointed out may be worth considering,” he said.
Castro today planned to discuss his proposal on Thursday evening at a gathering of the Working Families Party in Dallas in a bid for the minor party’s endorsement. The Working Families Party, established in New York two decades ago by labor unions and community groups, endorses progressive candidates from both major political parties and occasionally runs candidates itself.