Patrick Semansky/AP Photo
President Joe Biden speaks about his proposed budget for fiscal year 2023 on March 28, 2022.
The billionaire tax included in President Biden's 2023 budget is a welcome brand of pitchfork-wielding, of the kind that President Obama disdained when he shamefully told an audience of bankers in 2009 that his administration was the only thing "standing between you and the pitchforks." If Obama-era Democrats had been more on the side of the pitchforks, that role would not have passed to Donald Trump.
Biden's billionaire tax would raise $360 billion over a decade by taxing those with annual incomes over $100 million—roughly the 20,000 wealthiest families in the country. That's the top one-hundredth of one percent of American households.
They can well afford to pay. During the first two years of the COVID pandemic, according to an analysis of wealth concentration by Americans for Tax Fairness (ATF) based on Forbes data, the wealth of America's billionaires increased by $1.7 trillion, or 57 percent, to a total of $4.6 trillion. This was a time when most other Americans were struggling.
The Biden plan would raise taxes on the richest in two ways. First, it would add a minimum tax rate of 20 percent, no matter how many tax dodges plutocrats and their accountants came up with to lower their tax liability. And for the first time, the tax code would levy taxes on capital gains even if the asset had not been cashed in.
According to some tax experts, this concept avoids possible constitutional objections to a wealth tax because it does not literally tax wealth. Rather, it taxes increments to wealth, otherwise known as income.
Biden is actually late to this party. Surtaxes on the very wealthy were previously proposed by Democrats as varied as senators Ron Wyden and Elizabeth Warren.
Wyden's version, like Biden's, would tax unrealized capital gains. Warren's version would actually tax wealth, at a rate of 2 percent on all fortunes over $50 million, and an additional 1 percent on all personal holdings over one billion. By taxing wealth directly, Warren's tax would raise a lot more money than Biden's—some $3 trillion over ten years.
The idea of a billionaire tax, according to ATF, has been endorsed by 105 national organizations, 219 economists and law professors, and more than 250 millionaires. And taxing the mega-rich is popular with voters generally. According to polling by the group Future Majority, support for Build Back Better increases dramatically when it is funded by a tax on billionaires.
Of course, none of these plans has much chance of becoming law anytime soon. The point is to inject them into national debate, as a key difference between what Biden and his Republican opposition stand for.
Presidential budgets are famously dead on arrival—Biden's more than most. Unlike FDR and LBJ, Biden does not have a large working majority in Congress. But that's all the more reason for him to signal the kind of progressive populist policies that he would enact if the voters would send more Democrats to Congress.
In this respect, Biden has a role model in Harry Truman, whose approval ratings in the spring of 1948 were well below where Biden's are today. Truman also faced a thoroughly obstructionist Congress.
Biden also needs to signal directly what he wants to do for regular people.
But instead of looking for ways to split the difference, Truman called Congress into a special session and sent up a package of bills to expand the New Deal that he knew Republicans would oppose—a higher minimum wage, more money for housing and education, increased Social Security and more funding for public power. Then he went on the road to make clear the difference between his vision and that of the Republicans.
"Don't vote for me," he liked to say, "Vote for yourselves." In the November, not only did Truman win an upset victory, but he also pulled House and Senate candidates with him and took back Congress.
Biden's billionaire tax is good as far as it goes, but there is more to progressive populism than taxing the filthy rich. Biden also needs to signal directly what he wants to do for regular people. As I've argued elsewhere, he has the executive power to cancel student debt and to order unconscionably priced drugs put into the public domain.
Wealth concentration is not the only form of economic concentration harming working Americans. Extreme corporate concentration leads to pricing power to gouge consumers. Biden could be speaking out more forcefully on that abuse as well, and proposing measures to break up monopolies as well as offering public alternatives.
To his great credit, Biden has proposed a very substantial increase in funding for the Federal Trade Commission and the Antitrust Division of the Justice Department, totaling $223 million. How about a major speech on the abuses that make this necessary?
The billionaire tax is also nested in a budget that is one-part progressive populism and one part bragging about cutting the deficit. We've seen that movie, and it bombed.
Cutting the deficit may be decent policy in some circumstances, but embracing the idea too ardently motivates austerity hawks and not ordinary voters. Reinforcing that litmus test comes back to bite you when deficits are needed to pay for public investments.
Not only are presidential budgets dead on arrival; they tend to be compromise documents whose clear signal gets submerged in the noise. Right now, any sort of progressive populist narrative is at risk of being drowned out by louder headlines about protracted war and resurgent COVID. If Biden wants to alter that narrative, he needs to be crystal clear about what he proposes to do to fight for ordinary Americans.
More pitchforks, please.
