BIDEN OFFERS MAJOR TAX PLAN PAY-FORS TO INVEST IN HEALTH CARE, EDUCATION AND INFRASTRUCTURE

Cites Americans For Tax Fairness Revenue Options Report as Source

Democratic presidential candidate and former Vice President Joe Biden has released a package of progressive tax reforms that he says would raise $3.2 trillion over 10 years to invest in expanded health care coverage, a climate and infrastructure plan, and a higher education proposal.

Biden’s tax plan would raise rates on the wealthy and corporations and close loopholes they use to avoid paying their fair share, then use that money to invest in vital services working families need to get by and get ahead. Importantly, he would address the taxation of wealth through capital-gains tax reforms and curb offshore tax dodging by big corporations. Tackling both issues is crucial to creating an economy that works for all Americans, not just those at the top.

Biden would tax capital gains and dividends as ordinary income for taxpayers with more than $1 million in income, which he estimates would raise $800 billion. He would also end the scandal of profitable corporate titans like Amazon paying nothing in federal income taxes by setting a minimum tax on the nation’s largest corporations based on the profits they report to their investors. That reform would raise $400 billion.

In all, Biden says his tax plan would raise $3.2 trillion over 10 years and would pay for his $1.7 trillion climate and infrastructure plan, a $750 billion health care plan and a $750 billion higher education proposal.

Among other sources for his plan, Biden cites an Americans for Tax Fairness report released in April entitled Fair Taxes Now: Revenue Options for A Fair Tax System. It’s a comprehensive menu of 40 progressive tax reform options that would raise up to $10 trillion.

“Our country faces many critical unmet needs,” said Frank Clemente, executive director of Americans for Tax Fairness Action Fund. “Health care is too expensive and covers too few. Our roads and bridges are crumbling. Our education system is failing too many students and leaving them with massive debt. And the climate emergency is growing more alarming every day. On top of that, there is a huge gulf between the rich and everyone else.

“To address these needs, we need to create a Fair Share Tax System that raises trillions of dollars of new revenue,” he said. “That means asking those who can most afford it to contribute more. Joe Biden’s plan recognizes, like our report did, that there are many options to raise needed revenue by asking the wealthy and corporations to pay their fair share.”

Biden previously proposed raising the top individual tax rate to 39.6%, the level before passage of the Tax Cuts and Jobs Act (TCJA) in 2017, which would raise $90 billion. He also proposed increasing the top corporate tax rate to 28% from its current 21%, which would raise $730 billion. Other components of his new plan include:

• Closing the stepped-up basis loophole that allows wealthy families to avoid paying income taxes on capital gains when they inherit assets, which would raise $440 billion.
• Closing real-estate tax loopholes left open and created by the TCJA, which benefit wealthy investors like President Trump: $70 billion.
• Ending fossil fuel subsidies: $40 billion.

LATEST UPDATES MADE TO WEBSITE TRACKING TAX PLANS OF MAJOR PRESIDENTIAL CANDIDATES

New Proposals for Wealth Tax, Carbon Tax, Wall Street Sales Tax Would Remake U.S. Economy

The latest updates to the Americans for Tax Fairness Action Fund website that tracks progressive tax proposals by Democratic presidential candidates now includes innovative plans for carbon taxes, financial transaction taxes, new wealth taxes and more that were proposed in recent weeks by several candidates. A summary table of candidates’ positions on major issues is available here. A text-only google doc version of the website is available here.

The website contains summaries of each of the candidate’s tax proposals, along with estimates on how much money the reforms would raise and how the candidates would allocate the funds.

“The sheer number of new, progressive tax proposals by the Democratic candidates signals a tipping point in U.S. tax policy,” said Frank Clemente, executive director of Americans for Tax Fairness Action Fund. “The majority of Americans favor increased taxes on the wealthy and corporations to pay for critical needs, and now all the Democratic candidates are stepping up with major proposals to make the economy work for everyone. These tax proposals are a clear reaction to the $2 trillion cost of the Trump-GOP tax cuts that largely benefit the wealthy and big corporations and have emerged as a key issue in the Democratic Primary.  It’s a very significant development.”

The ATF Action Fund unveiled its tax tracking website in June when 23 candidates offered a variety of proposals to create a much fairer tax system and raise substantial new revenue to expand health care, confront climate change and address widening income inequality. The field of candidates has narrowed somewhat since, but new tax proposals keep coming, including:

• Carbon Taxes: Nine of 17 candidates on our website (see summary table) now support some form of a carbon tax, or “pollution fee,” as a comprehensive response to the threat of climate change. Additionally, several of the candidates propose using the proceeds for a rebate or dividend to Americans, and call for an end to federal subsidies for the oil and gas industries.
• Financial Transaction Tax (FTT): Nine of the candidates have also announced support for a tax on Wall Street trades as a way to raise revenue from the wealthy and to reduce destabilizing speculation and high-speed trading. Since half of Americans own no stock, an FTT would mainly affect wealthy investors. (Former Vice President Joe Biden is also reportedly considering an FTT proposal.)
• Payroll Taxes to Shore Up Social Security: Sen. Warren would levy a new 14.8% payroll tax on individuals who earn more than $250,000 a year to be split by workers and their employers (7.4% for each). Currently, the Social Security payroll tax of 12.4% only applies to income up to $132,900. Warren will also assess a 14.8% tax on investment income that would apply to married couples making more than $400,000 and singles making more than $250,000 — roughly the top 2%. All of this is designed to increase Social Security benefits for lower-income recipients and to extend the solvency of the trust fund for about 20 years. Sen. Sanders has a different proposal, which is co-sponsored by Senators. Booker and Harris. It would subject all earned income above $250,000 to the 12.4% payroll tax, which would extend the solvency of the Social Security Trust Fund for 52 years and increase some benefits.
• Capital Gains Tax: Sen. Corey Booker has joined other candidates in proposing to tax capital gains – profits from the sale of stocks and other investments – at the same rate as ordinary wages. He suggests adopting a “mark-to-market” framework for taxing investments so that as “tradable” investment portfolios (e.g., stocks, bonds, mutual funds) of the wealthy increase in value they will pay taxes each year the way workers pay taxes on wages.
• Wealth Tax: Sen. Bernie Sanders has proposed a wealth tax to fund affordable housing, childcare and Medicare for All that goes further than one proposed by Sen. Elizabeth Warren. His plan proposes an annual 1% tax on the wealth of households with a net worth above $32 million (about 180,000 households), which is approximately the richest 0.1%. It would increase from there with rates topping out at 8% on net worth over $10 billion.

“Win or lose, these candidates have presented clear alternatives to the Trump-GOP tax cuts that will resonate far beyond the campaign,” Clemente said. “The public knows that it’s time to restore fairness to the economy and raise needed revenue, and these candidates are showing just how it can be done.”

The ATF Action Fund website of Presidential Candidate Tax Plans is HERE.

For a text-only Google doc version go HERE.

A summary table of all the plans can be found HERE.

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

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

ATF ACTION FUND APPLAUDS TAX REFORM PLAN BY PRESIDENTIAL CANDIDATE SETH MOULTON

Comprehensive Proposal is ‘Solid, Progressive Alternative’ to GOP Tax Cuts for Wealthy

WASHINGTON, D.C. – Americans for Tax Fairness Action Fund (ATFAF) today praised a major progressive tax reform proposal by Democratic presidential candidate Rep. Seth Moulton (D-MA) as a “solid, progressive alternative” to the Trump-GOP tax cuts, which mostly benefited the wealthy and big corporations. Moulton estimates his plan would raise $2.8 trillion over 10 years—largely by requiring the wealthy and corporations to pay a fairer share of taxes—whereas the Trump-GOP tax cuts cost $1.9 trillion.

Frank Clemente, executive director of ATFAF, said Moulton is the first candidate to offer a detailed plan to repeal key parts of the Tax Cuts and Jobs Act of 2017 (TCJA) benefiting the well-off, corporations and businesses. Instead, he proposes reforms that would reward work over wealth, raise trillions in needed revenue for critical services and create a fairer tax system. He said Moulton’s plan corresponds to many reform options included in a report by Americans for Tax Fairness, a sister organization to AFTAF: Tax Fairness Now: Revenue Options for a Fair Tax System released in April.

“Rep. Moulton deserves credit for acting to remedy the unfairness of the Trump-GOP tax scam that has handed huge tax cuts to the wealthy and big corporations,” Clemente said. “His plan would begin to create a fairer tax code that is now rigged in favor of the wealthy and powerful. It would demand more from the most fortunate, close loopholes and begin to create an economy that works for everyone – not just the privileged few.”

Included in Moulton’s plan are proposals to:

• Increase the Corporate Tax Rate to 25%. The TCJA decreased the corporate tax rate from 35% to 21%. Increasing it slightly to 25% would raise more than $350 billion over 10 years. ATFAF believes the corporate tax rate should be higher still and that the tax rate on offshore profits, which is about half the 21% rate, should be increased to match the domestic rate.
• Equate the Rates. By eliminating the difference between the tax rate on long term capital gains and ordinary income, Moulton takes a major step towards taxing income from investments at the same rate as income from wages and salaries. Investment income largely flows to the richest 1%.

• End Tax Shelters. The plan would “move the corporate tax rate to a per-country minimum on worldwide income.” This is an important step to limit profit shifting to tax havens and other low-tax countries by large corporations.

• Reform the Estate Tax. The plan returns the threshold at which estate taxes are assessed to the 2009 levels of $3.5 million for an individual and $7 million for couples. This level would affect fewer than 2 out of every 1,000 estates. Also, importantly the plan eliminates step-up in basis that allows taxpayers to avoid paying any taxes on the growth in value of assets such as stocks if they are passed on to heirs of estates before they are sold.

• End the Pass-through Deduction. The TCJA created a new loophole that allows owners of most pass-through businesses to exclude 20% of their business income from taxation—effectively lowering the top tax rate to as low as 29.6%, from 37%. Sold by President Trump and the GOP as a small business tax cut, three-fifths of the value of this tax break will go to the richest 1% of business owners by 2024, such as real estate moguls like Trump.
• Close Tax Loopholes. Included are the carried interest and real estate loopholes that allow the wealthy to pay a lower tax rate than many working families.
• Step up Tax Enforcement. The plan would spend an extra $2 billion a year to beef up the IRS audit staff to target tax avoidance by wealthier taxpayers.

Moulton did not say how he would spend the nearly $3 trillion in new revenue he estimates his plan would raise but suggested it could provide greater health care coverage for more Americans, increase education funding, address climate change or other pressing needs.

Clemente emphasized that ATFAF is not endorsing the Moulton plan or any candidate in the 2020 race.  “But I hope other candidates who have not yet proposed major progressive tax reforms will take notice of Moulton’s sensible proposal and offer their own ambitious plans,” he said. “Polls consistently show that most Americans view the Trump-GOP tax cuts unfavorably, because they have not seen much of a tax cut and they correctly believe that the law largely favored the rich and corporations. Voters are ready for change and more than that they are ready for a tax system that’s fair to everyone, not the one we have that mostly benefits the wealthy and big corporations.”

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

TALKING TAXES: NEW WEBSITE TRACKS TAX PLANS OF DEMOCRATIC PRESIDENTIAL CANDIDATES

Candidates Back Nearly 100 Proposals for Progressive Tax Reform

and Explain How They Would Invest the Added Revenue

WASHINGTON, D.C. – As the first Democratic presidential debates get underway this week, Americans for Tax Fairness Action Fund today launched a website detailing the tax plans or proposals of each candidate. Wealth taxes, higher capital gains taxes, stronger estate taxes, higher corporate tax rates, financial transaction and carbon taxes, and EITC and Child Tax Credit expansions are among the reforms detailed on the website, broken down by candidate and type of tax.

A one-page summary of the candidates’ major positions is available here.

In many cases the tax proposal is accompanied by an explanation of how the candidate intends to use the additional revenue, such as for improved healthcare, education, infrastructure and environmental protection.

“It’s surprising that this early in the 2020 race tax policy is emerging as a key issue and a defining one for Democrats,” said Frank Clemente, executive director of Americans for Tax Fairness Action Fund. “The utter failure of the Trump-GOP tax cuts to live up to the promises of more jobs and higher wages has given the candidates an opening to propose major tax increases as part of their campaign platforms. Virtually all candidates are saying they want to repeal or significantly roll back the Trump-GOP tax cuts.”

The website offers formal tax proposals where they exist, but also more general statements on tax policy. Major themes that are apparent from the plethora of proposals:

• All the candidates want to create a much fairer tax system by making the rich and corporations pay their fair share.
• Many candidates have paired raising significant revenue with financing ambitious investment initiatives.
• Repealing or rolling back the Trump-GOP tax cuts for the wealthy and corporations is a priority for virtually all candidates.
• Eight candidates have identified taxing wealth more like work as a priority by reforming the way investment income is taxed, such as equalizing the top tax rates paid on capital gains and wages and salaries, which are currently 20% and 37% respectively.
• Six candidates want to strengthen the estate tax, which was severely weakened by the Trump-GOP tax cuts and now affects about 0.2% of all estates because it applies to estates valued at $11 million for an individual and $22 million for a couple.
• Ten candidates want to raise corporate tax rates.
• 12 candidates support some form of a carbon tax and five support a Financial Transaction Tax.
• Eight support a major expansion of the Earned Income Tax Credit and the Child Tax Credit (CTC), 11 support a separate CTC-expansion bill, and 11 support a 0.2% payroll tax to pay for paid leave for the birth of a child, illness or to take care of a relative.

Clemente offered three reasons presidential hopefuls are going bold on taxes this election.

“One is the failure of the Trump-GOP tax cuts – the Tax Cuts and Jobs Act (TCJA) – to live up to its promises to raise wages, create jobs and increase business investment,” he said. “Voters were never keen on the tax cut law, and polls continue to show that they believe (correctly) that it mostly favored the wealthy and big corporations and did little for them.

“Second, candidates are much more aware that voters strongly favor taxing the wealthy and corporations, as indicated by our polling compilation. Most voters don’t believe in the magic—and fake—elixir of trickle-down tax cuts.

“Third, voters are demanding much greater investment in public services—from affordable healthcare and childcare to improved housing and education; from rebuilding infrastructure to addressing climate change—and they want to know how candidates will pay for it all.

“These factors have combined to create an environment in which candidates—far from having to shy away from the tax issue as in past years—will actually be rewarded for proposing major tax increases on the wealthy and corporations and using the money to pay for vital public investments.”

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 further tax and investment proposals in the future.

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