DE BLASIO PROPOSES MAJOR TAX PLAN TO ADDRESS INCOME INEQUALITY, RESTORE FAIRNESS

NYC Mayor Joins Democratic Candidates Pushing Back Against Trump-GOP Tax Cuts for Wealthy

 Addressing the growing problem of income inequality in America, Democratic presidential candidate Mayor Bill de Blasio yesterday proposed a major plan to overhaul the nation’s tax system that requires a lot more from the wealthy and corporations.

While nearly all the Democratic candidates have proposed various tax and revenue increases to pay for critical needs (as catalogued on the ATF Action Fund website), de Blasio’s plan goes further by targeting a broad array of loopholes and inequities in the tax code that give preferential treatment to the wealthy and big corporations.

Although it’s unclear how much revenue de Blasio’s plan would raise, it cites estimates showing it could raise about $10 trillion over 10 years.

“Mayor de Blasio’s progressive tax-reform plan is a recognition not only that the Trump-GOP tax cuts for the wealthy are unfair and aren’t working, but also that raising taxes on the wealthy and big corporations is good for the economy,” said Frank Clemente, executive director of Americans for Tax Fairness Action Fund. “We have numerous critical needs, from infrastructure to education, to health care and climate change. It will cost trillions of dollars to address these needs, which will actually strengthen the economy and put more people to work. But the only way to do that is to raise substantial revenue by replacing the rigged system we have now with fair and progressive taxes.”

Clemente emphasized that ATF Action Fund does not endorse political candidates. “But it’s encouraging to see candidates like de Blasio and others move the issues of tax fairness and income inequality to the forefront of the 2020 campaign for president where it belongs,” he said.

Included in de Blasio’s tax plan are proposals to:

• Tax Extreme Wealth: Impose a 1% tax on households with wealth between $10 million and $25 million, a 2% tax on assets between $25 million and $100 million, and a 3% tax on assets in excess of $100 million.
• Tax Wealth Like Work: De Blasio’s plan would tax capital gains (income derived from the sale of stocks, bonds and other investments) the same as ordinary income – wages and salaries for wealthier taxpayers. Currently, capital gains are taxed at a much lower rate than workers’ paychecks – 20% (or 23.8% for a married couple making more than $250,000 a year) vs. 37%, the top tax rate on wages and salaries.
• Increase the Top Marginal Tax Rate and Create Two New Brackets for the Very Wealthy: The plan would increase the top marginal tax rate to 40%, from the current 37%, for individuals with income up to $1 million, and add two new tax brackets and tax rates – a 50% rate on income between $1-$2 million and a 60% rate on income above $2 million. The latter rate would effectively be 70% after adding in state and local taxes.
• Restore the Corporate Tax Rate to 35%: De Blasio’s plan would restore the corporate tax rate to 35%, which was reduced to 21% under the Trump-GOP tax cuts, and reinstate a “strong” “Alternative Minimum Tax” to prevent profitable corporations from avoiding a tax liability. He would also equalize the tax rate between domestic and foreign profits to reduce incentives for corporations to shift profits offshore and outsource jobs.
• Financial Transaction Tax: De Blasio would establish a Wall Street sales tax of 0.2% on stock, bond and derivatives trades, which would also help curb market volatility.

Some elements of de Blasio’s plan are similar to proposals by Senators Elizabeth Warren, Bernie Sanders and Rep. Seth Moulton (D-MA), who released a tax plan that he estimates would raise nearly $3 trillion.

Some of de Blasio’s tax proposals reflect options included in a report by Americans for Tax Fairness titled Tax Fairness Now: Revenue Options for a Fair Tax System released in April.

“Democrats are making tax fairness and income inequality key issues in the 2020 campaign,” said Clemente. “That will give voters a stark choice between President Trump and Republicans, who support tax giveaways to the wealthy and big corporations, and the public, which polls show support a tax system that’s fair to everyone, not just the wealthy and powerful.”

 

Contact:
Dennis Bailey
Director of Communications
Americans for Tax Fairness Action Fund
202.733.3444
dbailey@americansfortaxfairness.org

PRESIDENTIAL CANDIDATES UPDATE TAX PLANS, PROPOSE A VARIETY OF TAX INCREASES ON WEALTHY & CORPORATIONS

ATF Action Fund Website Tracks the Latest Initiatives to Raise Trillions in Revenue

Democratic presidential candidates continue to propose new progressive tax reform plans and refine previous ones to raise trillions in revenue to address critical needs including healthcare, the high cost of prescription drugs, wealth inequality and climate change.

The ATFAF website that tracks the tax plans of 22 Democratic candidates now includes more proposals for higher individual and corporate tax rates, carbon taxes, a “war tax,” a pharmaceutical tax and more. A summary table of all candidates’ positions is here.

“It’s encouraging to not only see how candidates intend to address urgent needs facing this country, but also how they intend to pay for their proposals, mostly by raising taxes on the wealthy and big corporations that benefited so greatly from the Trump-GOP tax cuts,” said Frank Clemente, executive director of Americans for Tax Fairness Action Fund. “It shows that all the candidates are committed to a fairer, more equitable tax system that right now is rigged in favor of the rich and powerful.”

The latest additions to the ATFAF website include:

• Joe Biden has proposed reversing the TCJA tax cuts for the wealthy by restoring the 39.6% top marginal tax rate, up from 37%, raising the corporate tax rate to 28%, and equalizing the top tax rates on investment income and wages and salaries. He aims to help more families afford healthcare by expanding tax credits that help them buy health insurance under the Affordable Care Act (ACA) and suggests using the revenue saved from eliminating the stepped-up basis loophole to pay for free community college for between six and nine million students.
• A significant progressive tax reform proposal from Rep. Seth Moulton that would raise $2.8 trillion (his estimate) by repealing key parts of the Trump-GOP tax law favoring the wealthy and corporations and making other changes.
• A higher 28% corporate tax rate from Beto O’Rourke, as part of his goal to “roll back the worst elements of the Trump tax cuts,” equalizing the top tax rates on investments and wages and salaries, and a “war tax” that would levy a progressive annual tax on the adjusted gross income (AGI) of households without military members or veterans at the start of every “newly authorized war.”
• A proposal by New York Mayor Bill De Blasio for a 70% marginal tax rate on wealthy individuals.
• Proposals by candidate John Delaney for a 100% excise tax on the difference between the average price charged by a pharmaceutical company for a drug sold in the U.S. and the price of that drug in other countries, a “Robot Tax” on job-displacing capital investments, and a higher capital gains tax rate on high earners.
• 11 candidates want to tax wealth like work, with all but 1 of the 11 saying they want to equalize the top tax rate paid on capital gains to match that on wages and salaries, which are 20% and 37% respectively.
• 11 candidates support some form of a carbon tax.
• Six candidates want to strengthen the estate tax, by returning the threshold at which estates pay tax to the 2009 levels of $3.5 million for an individual and $7 million for a couple. This compares to the much higher thresholds under the Trump-GOP tax cuts – $11.4 million for an individual and nearly $23 million for a couple.
• Six candidates support a Financial Transaction Tax.

“It’s exciting to see that so many candidates want to take on the outrageous wealth divide in America, which is devastating to African American and Latino families, by equalizing the tax rates on investment income and wages and salaries,” said Clemente. “This appears to be priority one for the candidates.”

The ATF Action Fund presidential tax plan website presents the information voters need to evaluate each candidate’s tax and spending proposals and compare them to those of others. The website will be regularly updated as campaigns release new tax and investment proposals.

Americans for Tax Fairness Action Fund is a fiscally sponsored project of the Sixteen Thirty Fund, a section 501(c)(4) non-profit organization. ATFAF is related to but should not be confused with Americans for Tax Fairness, which is a project of the New Venture Fund—a section 501(c)(3) non-profit organization.

Contact:
Dennis Bailey
Director of Communications
Americans for Tax Fairness
dbailey@americansfortaxfairness.org
202.733.3444