Getting Serious about the Policy of Taxing the Rich

Washington      This whole thing about taxing the rich is getting serious.  There were more than 150 people in a wonk policy festival organized brilliantly by the Institute for Policy Studies and the Economic Policy Institute, two of the most respected research centers in Washington.  Talking about taxes in general is mind-numbing, head spinning, headache producing pain, and that’s just the talking, not actually paying taxes where many Americas conjure these feelings easily.  But, as one expert argued, we would need to raise $10 trillion in additional income to pay for the favorite programs around childcare, education loans, and more, without even adding up the price for Medicare For All, so that means that everything is on the tax laundry.

When Paul Krugman, the Nobel prize winning economist and New York Times columnist, starts off a meeting to set the sober and erudite tone, with Chicago’s Congresswoman Jan Schakowsky punching up the morning, Senator Chris Van Hollen from Maryland laying out a half dozen bills to make the crowd road, and Barbara Ehrenreich, author, activist, and humorist zinging the rich hard, you can imagine that the organizers, including the sponsor of the conference, Alan Davis of the WhyNot Initiative, were trying to send a message far and wide that even if this was going to a talk show, it’s intention was a call to action.

Senator Chris Van Hollen

Celinda Lake, the esteemed pollster and an old friend, was clear:  the public across the board supports taxing the rich because they want fairness, and they do so at much higher numbers than they polling on jobs and income.  Hear this you candidates and focus your remarks accordingly in the debates.

There were proposals on surtaxes, wealth, assets, and increases on marginal income tax rates for the those making more than $2 million.  There were calls to stop the rich from hiding their money offshore and from deferring taxes.  Cheating was called out and named whether about carried interest or step ups that left increase values untaxed for generations.  There were calls to get in the same hymn book and sing the same song, and there were advocates for “all of the above” when it comes to taxing the rich.  There were food and war metaphors.  We were going throw the kitchen sink at these money hoarding, tax cheats.

Celinda Lake

There were even some fireworks in the midst of all of this.  Erica Payne, director of something called Patriotic Millionaires, dropped some matches in the dry tax debates.  She called out Eli Broad, the Los Angeles billionaire and charter school champion, for claiming to advocate taxing the rich and then sneaking money to opponents of such policies in California and then writing an op ed in the Times still claiming “tax me.”  She called on the eighteen billionaires who had signed a letter to all the Democratic candidates asking them to tax the rich to put their money where their mouths were and pay for real work and a real campaign.

She was on fire, and that gave hope that maybe all of this talk and deep dive into tax policy might actually produce some real action.  The clues might have been during the last panel on what a campaign looks like, but I was running for a plane back to the real world, where all of us want the rich to pay their fair share, but don’t see the votes in a Congress made up of the rich and bought and paid for by the rich and their corporate buddies and lobbyists.

Barbara Ehrenreich

This is worth a fight and worth support, so let’s keep our eyes out for what happens next.  In the meantime, death and taxes are our only sure things, while only death seems certain for the very rich.

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Please enjoy You Don’t Know Me by Natalie Jean

Thanks to KABF.

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Real Estate Wealth Taxes as a Anti-Gentrification Tool

New Orleans   Recently I listened to an interview with a prominent local developer on WAMF in New Orleans as he was asked about gentrification.  He tried to walk the line between his self-interest and progressive values.  He was against displacement on one hand, but he opposed inclusionary zoning that would require developers to create affordable units in their properties.  He claimed it would sacrifice three units for every one that it created without mentioning that most of the three units built would be for high-end customers.  He opposed a tax on developments that would fund affordable housing or homeless programs.  He claimed the city and state had no money, so the real solution to gentrification had to be federal.

In some ways his argument was breathtaking in its chutzpah.  He was claiming to believe that gentrification was in some ways a pejorative term for a natural process, while opposing displacement, protecting his self-interest, and at the same time presenting himself as an advocate of a national remedy.  Unsaid was the fact that given our Developer-in-Chief president and the current situation in Congress and HUD, the chance of a federal remedy is much less than that odds Vegas would give a snowball in hell.

Chuck Collins, director of the Program on Inequality at the Institute for Policy Studies, in a commentary in YesMagazine made a much stronger, more realistic case for local action, saying:

Municipalities should move with due haste to enact high-end real estate transfer taxes, requirements for the disclosure of beneficial ownership, and regulations aimed at the disruptive impact absentee-owner-investors are having on our cities.

Collins doesn’t claim this will stop gentrification but makes the case that it will discourage “rapacious global capital” from exacerbating displacement and artificially increasing ownership and rental prices by discouraging the kind of offshore wealth capital “parking” that has been so destructive in Vancouver and London.  As an example, he cites the situation in San Francisco, another favor of “ultra-high net worth individuals” with over $30 million in assets, where voters passed a high-end real estate transfer tax on residential and commercial properties with $5 million price tags and higher.  According to Collins, the tax…

“…the tax expected to generate $44 million a year, which has been allocated to fund free tuition for residents at San Francisco Community College and help pay for the city’s tree maintenance program.”

That’s not the same as building affordable housing, but it’s moving in the right direction.  Furthermore, there’s no reason it could not leverage other funds to construct affordable housing or provide city-based rent subsidies.

We can’t wait for Washington.  We have to act now, and whether a real estate tax on $5 million or $1 million or whatever, if such a tax builds local equity by creating affordable housing or other programs that fight displacement, it’s worth a fight.

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