Democrats propose tax hikes with 2020 on the horizon
As potential contenders for the 2020 election begin to formulate platforms, one trend is clear among progressive Democrats – they are not afraid to call for tax hikes on the nation’s wealthiest residents.
From those launching exploratory committees even down to the newly elected, like New York Democrat Alexandria Ocasio-Cortez, left-leaning members of the party are increasingly looking at raising rates as one way to both pay for programs and attack income inequality.
The strategy might be a good one. A recent Fox News Poll showed a majority – 51 percent – of respondents said they favored spending more on domestic programs over cutting taxes and reducing spending. Their preferred method of financing those projects is through taxing the wealthy. About 70 percent of voters favored raising taxes on those making more than $10 million each year.
Here’s a look at some of the tax policies that Democrats have proposed so far:
Cory Booker:
Democratic New Jersey Sen. Cory Booker, who officially launched his presidential bid last week, has proposed legislation that would address the wealth gap by creating a $1,000 “seed savings account” for every American at birth.
The funds would be put in an interest-bearing account, accessible when the child turns 18. Each year the child would receive up to an additional $2,000 depending on family income. The senator estimates that for a family of four with an income equal to $31,375, the account would generate about $35,081 by the time a child turns 18.
The funds would be usable on certain allowable expenses, like homeownership and education.
Booker said the measure would be paid for through “common sense reforms” to estate and inheritance taxes – including a restoration of the 2009 estate tax law.
Elizabeth Warren:
Massachusetts Democratic Sen. Elizabeth Warren proposed an “Ultra-Millionaire Tax.”
The wealth tax would apply to those with more than $50 million in assets – it would be equal to 2 percent, but would rise to 3 percent for those who have assets valued at more than $1 billion.
The tax would raise $2.75 trillion over the course of a decade and would only apply to less than 0.1 percent of the population – about 75,000 families.
Additionally, the Massachusetts Democrat could unveil measures to prevent the wealthy from evading the payment – including a penalty for those eligible for the tax who seek to renounce their citizenship.
Alexandria Ocasio-Cortez:
The youngest female lawmaker ever elected, New York Rep. Ocasio-Cortez, has already made waves during her first few weeks officially in office.
When it comes to taxes, Ocasio-Cortez suggested imposing a 70 percent income tax on the country’s highest-earning citizens to pay for a new green energy plan.
The self-described Democratic socialist suggested imposing the 70 percent rate on those with incomes in excess of $10 million during an interview on “60 Minutes” to pay for the so-called “Green New Deal” — which would be a massive investment in clean energy infrastructure, aiming to eliminate carbon emissions in a little more than a decade.
Kamala Harris
California Democrat Sen. Kamala Harris, who has officially declared her candidacy in 2020, unveiled a plan to partially replace President Trump’s tax law with legislation that would give qualifying middle- and lower-income households free cash.
The bill – called the LIFT Act – aimed to raise the incomes of working families through a refundable tax credit that would match up to $3,000 of earnings for single people and $6,000 for married couples.
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The credit would be available for all households earning under $100,000 per year and single filers earning under $50,000 annually. It is one of the closest bills to universal basic income that a 2020 contender has proposed.
Although Harris did not specify exactly how the proposal would be paid for, she did say it could replace parts of the Tax Cuts and Jobs Act – which lowered the income tax rates for most Americans, including the wealthy. The Tax Policy Center estimated the proposal would add about $2.8 trillion to the deficit within 10 years.