Graeme Sloan/Sipa USA via AP Images
Sen. Elizabeth Warren (D-MA) speaks during a press conference at the U.S. Capitol about a proposed ultra-millionaire tax for those with fortunes over $50 million, March 1, 2021.
The original of the epithet made famous by Ronald Reagan was an aphorism attributed to FDR’s aide Harry Hopkins: “Tax and tax, spend and spend, elect and elect.” And it worked—as long as regular people were getting the benefit of those revenues and rich people were paying the taxes.
For half a century, Democrats forgot this formula and were thoroughly intimidated by Reaganism, to the point of joining Republicans in cutting taxes on rich people and starving government’s capacity to benefit everyone else. By some miraculous alchemy, Joe Biden is channeling Harry Hopkins, and the result is popular.
Biden’s plan, to be formally unveiled next week, will hike the capital gains rate on the very rich, raise the top rate on the personal income tax, double down on tax enforcement of wealthy tax cheats, and add a minimum corporate tax rate that overrides loopholes. All of this will help pay for benefits that are also popular, like universal pre-kindergarten, child care, free community college, and better care of the elderly and better pay for caregivers.
Progressives like me are torn between celebrating Biden’s recovery of Rooseveltian consciousness, and pressing Biden to do even more, now that the virtue of tax-and-spend has been rediscovered.
For instance, the Biden package needs a tax on financial transfers, not just for the revenue but to take the profit out of predatory short-term trading. And wealth has become so grotesquely concentrated that we could also use a wealth tax, both for the revenue and for the deconcentration.
Even as Biden proposes to raise lots of new revenue, the limits of what’s being raised are pinching his imagination. Progressives in Congress want the Child Tax Credit to be made permanent. Biden’s proposal is to extend it by five years, since that costs less in terms of revenue needed to be raised.
But Democrats may not have a congressional majority in five years. Making the credit permanent now increases the chance that they will.
Tax-and-spend has political and fiscal momentum. This is the moment to maximize it.
