If Joe Biden is America's Robin Hood, this is his merry band
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[April 26, 2021]
By Trevor Hunnicutt
WASHINGTON (Reuters) - Bolstered by popular
support, U.S. President Joe Biden plans to take from the rich to give to
the poor, aided by advisers keen to address economic disparities and
stop companies from avoiding paying taxes.
Biden on the campaign trail in 2019 first signaled that he hoped to hike
taxes on investment gains paid by the wealthy as a way to fund social
programs, in that case healthcare.
The then-candidate relied on research from economists with roots in
academia and at think tanks. As president, he brought these advocates of
progressive taxation, or a system where tax rates increase as income
goes up, into the White House.
Now, their ideas are moving financial markets. Stocks briefly fell when
word emerged that Biden planned to raise capital gains taxes to fund $1
trillion in childcare, early childhood education and paid worker leave.
The president is expected to release details next week. (Full Story)
Despite alarm on Wall Street, there is strong public support for Biden's
proposal. Sixty-two percent of Americans believe upper-income people pay
less than their fair share in taxes, according to Gallup. That figure is
69% for corporations.
While Biden studiously distanced himself from some of the most
progressive policies put forth by fellow Democrats on the campaign
trail, an agenda of redressing inequity underpins his proposals on taxes
and infrastructure.
If Biden is playing Robin Hood, who is in his merry band of policy
architects crafting the capital gains tax initiative?
THINK TANKS
The Biden campaign's first taxation push was based in part on work done
by the Institute on Taxation and Economic Policy (ITEP), a 40-year-old
think tank that tracks which companies pay no federal taxes. It argued
that taxing income from invested wealth at a lower rate than taxing
income from work contributes to inequality. Biden's team also drew on
similar research by the group Americans for Tax Fairness.
The campaign used ITEP's research to calculate its own estimate of how
much taxing capital gains as income for people making more than $1
million would raise. It was significant - about $800 billion over a
decade.
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President Joe Biden and Vice President Kamala Harris walk on stage
for a virtual Climate Summit with world leaders in the East Room at
the White House in Washington, U.S., April 22, 2021. REUTERS/Tom
Brenner
At the time, Biden's Democratic presidential
opponents were proposing even bolder steps, such as outright taxes
on wealth held by individuals.
Mark Mazur, whom Biden named the Treasury Department's deputy
assistant secretary for tax policy in January, also has played a key
role in drafting the administration's proposals.
Mazur was the director of the Urban-Brookings Tax Policy Center, a
think tank founded by tax specialists in the Ronald Reagan, George
H. W. Bush and Bill Clinton administrations.
PROFESSORS AND ECONOMISTS
One influence on Biden's tax plans was David Kamin, now serving as
deputy director of the White House National Economic Council.
Kamin and another former aide under President Barack Obama, Lily
Batchelder, authored a 2019 paper as professors at the New York
University School of Law that said a wealth tax merited serious
consideration to address inequality.
"The U.S. economy exhibits high inequality and low economic mobility
across generations relative to other high-income countries,” they
wrote in “Taxing the Rich: Issues and Options."
The United States "will need to raise more revenues in order to
reduce these disparities, finance much-needed new services and
investments, and address the nation’s long-term fiscal needs."
Other progressive economists also hold key roles in the
administration, including Heather Boushey, a member of the White
House Council of Economic Advisers who co-founded the Washington
Center for Equitable Growth, and Ben Harris, a top aide to Biden who
helped draft the 2019 campaign positions and is now assistant
secretary for economic policy at Treasury.
(Writing by Andrea Shalal; Editing by Heather Timmons and Cynthia
Osterman)
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