Democrats vie for ti­tle of high­est tax raiser

‘Fair share’ for some goes up to 90 per­cent

The Washington Times Daily - - FRONT PAGE - BY GABRIELLA MUÑOZ

Democrats eye­ing bids for the White House also are com­pet­ing to see who is will­ing to go the high­est in rais­ing taxes.

Rep. Alexan­dria Oca­sio-Cortez, a New York lib­eral who is too young con­sti­tu­tion­ally to be­come pres­i­dent, nev­er­the­less set a bench­mark when she sug­gested in a “60 Min­utes” in­ter­view Sun­day that rates for the wealthy could top out at up to 70 per­cent.

Ju­lian Cas­tro, an Obama ad­min­is­tra­tion Cab­i­net of­fi­cial who has an­nounced a test­ing-the-wa­ters pres­i­den­tial com­mit­tee, quickly jumped on the band­wagon by telling ABC News that it’s time the wealthy be tapped for their “fair share.”

“There was a time in this coun­try where the top marginal tax rate was over 90 per­cent,” Mr. Cas­tro said in prais­ing Ms. Oca­sio-Cortez’s vi­sion. “Even dur­ing Rea­gan’s era in the 1980s, it was around 50 per­cent.”

Sen. El­iz­a­beth War­ren, a Mas­sachusetts

Demo­crat, who also has formed a pres­i­den­tial ex­ploratory com­mit­tee, hasn’t com­mit­ted to a high-wa­ter mark, but she too spoke ap­prov­ingly of ma­jor rate hikes.

“Look, there was a time in a very pros­per­ous Amer­ica — an Amer­ica that was grow­ing a mid­dle class, an Amer­ica in which work­ing fam­i­lies were do­ing bet­ter gen­er­a­tion after gen­er­a­tion after gen­er­a­tion — where the top marginal rate was well above 50 per­cent,” Ms. War­ren said on CNBC in July. “Ninety per­cent sounds pretty shock­ingly high. But what I’m try­ing to get at is this is not about ne­go­ti­at­ing over spe­cific num­bers.”

For a Demo­cratic Party pre­par­ing to face off against Pres­i­dent Trump, whose ma­jor leg­isla­tive ac­com­plish­ment was a $1.5 tril­lion tax cut, the con­trast is cam­paign-ready.

“Re­peal­ing the tril­lion-dol­lar-plus Trump give­away to the su­per­rich and gi­ant cor­po­ra­tions is be­com­ing the new floor for what Democrats will be push­ing for on taxes,” said Adam Green, a co-founder of the Pro­gres­sive Change Cam­paign Com­mit­tee.

Lib­eral ac­tivists are ea­ger to see what the gov­ern­ment might be able to do with the rev­enue they ex­pect to be raised and pre­dict fur­ther build­ing of the so­cial safety net.

“Oca­sio-Cortez is re­viv­ing a tra­di­tion in the Demo­cratic Party of be­ing the party of the New Deal and Great So­ci­ety,” Waleed Shahid, the com­mu­ni­ca­tion di­rec­tor for Jus­tice Democrats, told The Wash­ing­ton Times.

Mr. Cas­tro em­braced Ms. Oca­sio­Cortez’s idea, but other po­ten­tial Demo­cratic pres­i­den­tial can­di­dates said only that taxes need to be in­creased.

“I’m ea­ger to have a dis­cus­sion about it,” Sen. Ka­mala D. Har­ris of Cal­i­for­nia told The Wash­ing­ton Times.

Rep. Eric Swal­well, an­other law­maker from the Golden State, also de­clined to take a spe­cific stand, though he said re­vok­ing Mr. Trump’s tax moves should be part of any ac­tion.

“I think we saw what un­fair meant [in the] last tax bill. And the vot­ers did, too. That’s why they threw out the party that passed that,” he said.

Oth­ers ig­nored in­quiries about taxes. Sen. Cory A. Booker of New Jersey de­clined to talk about it, say­ing he is fo­cus­ing on the par­tial gov­ern­ment shut­down.

Un­der the New Deal, the top tax rate surged from about 25 per­cent to 94 per­cent dur­ing World War II. The rate re­mained in the 80 per­cent and 90 per­cent range un­til the Kennedy and John­son tax cuts and dropped to 70 per­cent through the Carter ad­min­is­tra­tion.

Pres­i­dent Rea­gan over­saw a cut to 50 per­cent and then 28 per­cent. Pres­i­dent Ge­orge H.W. Bush signed an in­crease to 31 per­cent. Pres­i­dent Clin­ton took it to nearly 40 per­cent, Pres­i­dent Ge­orge W. Bush cut it to 35 per­cent, and Pres­i­dent Obama re­turned the level to the Clin­ton era, with an add-on for Oba­macare.

The tax over­haul Mr. Trump signed in 2017 cuts that top marginal rate to 37 per­cent. That kicks in for in­di­vid­u­als mak­ing $500,000.

Mr. Green pre­dicted that Democrats will be will­ing to roll back top rates at least to 50 per­cent.

Ryan Green­wood, di­rec­tor of Move­ment Pol­i­tics for Peo­ple’s Ac­tion, said his group fully en­dorses Ms. Oca­sio-Cortez’s plan to go as high as 70 per­cent.

Ms. Oca­sio-Cortez said her top rate would kick in for those with an­nual earn­ings of $10 mil­lion or more.

Er­ica York, an an­a­lyst with the Tax Foun­da­tion, said the in­creases wouldn’t be likely to pro­duce a wind­fall for the gov­ern­ment.

She said peo­ple with that much in earn­ings are gen­er­ally re­port­ing more in­vest­ment in­come than wages, and in­vest­ments are gen­er­ally taxed at dif­fer­ent rates. She also pre­dicted that a 70 per­cent top rate would push wealthy tax­pay­ers to find other ways to shel­ter their in­comes.

Ms. York said law­mak­ers in­stead could start with smaller changes, such as cap­ping item­ized de­duc­tions, to start in­creas­ing rev­enue.

“With­out a to­tally new type of tax, it would be re­ally dif­fi­cult to get the rev­enue nec­es­sary,” she said.

Some Democrats have urged such a plan, dubbed the “Buf­fett Rule,” after bil­lion­aire in­vestor War­ren Buf­fett. Mr. Buf­fett says he shouldn’t be pay­ing a lower rate on his in­vest­ment in­come than his sec­re­tary pays on her wages.

A Se­nate bill en­shrin­ing the Buf­fett Rule would im­pose a manda­tory ef­fec­tive min­i­mum tax rate of 30 per­cent on any­one with in­come over $2 mil­lion and a lower manda­tory rate on those mak­ing $1 mil­lion.

Among Democrats eye­ing a pres­i­den­tial run, Sens. Jeff Merkley of Ore­gon, Amy Klobuchar of Min­nesota, Ms. War­ren and Mr. Booker co-spon­sored the leg­is­la­tion in the last Congress.

Not sign­ing on was Sen. Bernard Sanders, a Ver­mont in­de­pen­dent who was the run­ner-up in the 2016 Demo­cratic pres­i­den­tial con­test when he cham­pi­oned a 50 per­cent top marginal tax rate.

AS­SO­CI­ATED PRESS

Rep. Alexan­dria Oca­sio-Cortez, New York Demo­crat, set a bench­mark when she sug­gested in a TV in­ter­view that rates for the wealthy could top out at 70 per­cent.

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