If you, like me, enjoy the idea of taxing the rich and redistributing their wealth to workers, some Democrats are coming up with pretty damn good ideas these days.
First, Rep. Alexandria Ocasio-Cortez proposed raising the top marginal tax rate to 70 percent—a suggestion that made conservatives apoplectic but was both popular and in line with decades of historical precedent. Following AOC’s lead was Sen. Elizabeth Warren, the first major Democratic candidate to announce she was running for president. She proposed a 2 percent wealth tax on Americans who have more than $50 million in assets and 3 percent on those with more than $1 billion, along with measures to prevent tax avoidance. And now, Vermont Sen. Bernie Sanders—who’s mulling a second run for the presidency in 2020—has put forth a plan to bring back the estate tax in a huge way.
As the Washington Post first reported, the Sanders plan, aptly titled “For the 99.8 Percent Act,” would drastically expand the tax paid by the heirs of extremely wealthy people when they die. Currently, the top estate tax rate is 40 percent; Sanders’ plan would place the top rate back at 77 percent (which is what it was through much of the New Deal era), cap exemptions at $3.5 million, and create new brackets, such as a 55 percent tax on estates worth more than $50 million.
For reference: As recently as 2001, the exemption limit was $675,000, and the top rate was 55 percent. Sanders, like Ocasio-Cortez, isn’t proposing anything new or radical, just a return to the way things were before the neoliberal order took hold in the Reagan era. Sanders’ press release about the bill said it would raise $2.2 trillion from America’s 588 billionaires once they die, including $315 billion over the next decade.
“It is literally beyond belief that the Republican leadership wants to provide hundreds of billions of dollars in tax breaks to the top 0.2 percent of our population,” Sanders told the Post. “Our bill does what the American people want us to be doing and that is to demand that the very wealthiest families in this country start paying their fair share of taxes.” The Post also noted that Sanders’ plan has the support of French economist Thomas Piketty.
President Donald Trump—whose kids will undoubtedly benefit from our current policies once the old man finally croaks on the toilet—and congressional Republicans attempted to kill the federal estate tax for good in the 2017 tax reform plan, but instead settled for doubling the exemption that each person could give their heirs without being taxed to a whopping $11.2 million. The GOP hasn’t given up, though: Earlier this week, Senate Republicans announced another bill to repeal the estate tax altogether.
Due to the fact that Congress is divided now, none of these ideas on either side have much chance of passing in the next couple of years. But Sanders’ bill is an important step for a possible presidential campaign and for the Democrats as a whole, as it helps to make the argument for why people should vote for the party in 2020 and also lends a hand to answering the concern trolling which only seems to come up when someone proposes an expansion of the safety net, such as “How do you pay for it?”
The great thing about the AOC, Warren, and Sanders tax proposals is that none are in conflict with each other, meaning you can do all of them at the same time and raise much-needed funding for things like a Green New Deal and Medicare for All. You could even, to borrow a phrase, call it “comprehensive tax reform.”