President-elect Joe BidenJoe BidenRand Paul calls for Fauci's firing over 'lack of judgment' Dems look to keep tax on billionaires in spending bill Six big off-year elections you might be missing MORE won over 78 million votes, more than any presidential candidate has ever received, while unabashedly vowing to raise taxes on the wealthiest individuals and on corporations. Progressive tax reform should be among his early and top priorities.
This brutal year amplifies how much we need competent, well-funded public institutions. Cuts to health insurance and pandemic prevention left the nation particularly vulnerable to COVID-19. Inequality and weak worker protections meant that many working families could safeguard neither their health nor their bank accounts as the pandemic and recession took hold. And retreat from some environmental protections meant we risked accelerating climate change, even as natural disasters such as colossal fires in California, Colorado and Oregon and Gulf Coast hurricanes intensified.
The nation’s lack of adequate preparation for these crises is a result of years of disinvestment. The Biden administration will have a chance to turn that around.
First things first. The COVID-19 health crisis appears to be out of control, with infections rising to terrifying levels and some hospitals at near capacity. In the short term, we must listen to medical recommendations to slow the spread. In the long term, we need to raise taxes on the wealthy to boost government revenue and better fund health care, vaccine research and distribution, pandemic preparation and preventative care.
Revenue generated with higher taxes on the wealthy also could help fund better policies for workers, including paid leave and other protections. Essential workers are especially susceptible to getting sick and dying from the virus, in part because a lack of these protections pushes them to work even if they feel sick or unsafe on the job.
The tax code could directly improve lives by expanding and reforming our Child Tax Credit (CTC), which, in its current form, ignores the poorest children. Biden backs a better CTC, which has always gotten bipartisan support, and a temporary expansion is included in an economic relief bill proposed by House Democrats. Passing that would begin to reduce poverty, help kids, and show voters that the parties can work together.
Inequality saps economic resilience, but the tax code does less to reduce inequality than it used to, even as income and wealth have become much more concentrated. President TrumpDonald TrumpSix big off-year elections you might be missing Twitter suspends GOP Rep. Banks for misgendering trans health official Meghan McCain to Trump: 'Thanks for the publicity' MORE’s Tax Cuts and Jobs Act passed in 2017 slashed taxes by an average of nearly $50,000 a year for the highest-income 1 percent, and created a slew of complicated tax breaks for the rich and corporations. Even before Trump’s White House, the tax code favored wealth over work. Congress should repeal the provisions that tax capital gains and stock dividends at lower rates than income from work.
Congress also should consider taxing wealth directly with a tax on the net worth of the top 0.1 percent of households. Some fret that the Supreme Court would block a wealth tax — let’s pass one and let them try. At the very least, Congress can reform how we tax the transfer of wealth by strengthening the estate tax. Currently, an heir can inherit up to $23.2 million tax-free.
Corporations are not contributing as they should to our public needs. Trump’s tax reform cut corporate tax rates and taxes overseas profits at a lower rate than profits earned here. Partly as a result, 91 profitable Fortune 500 companies paid no federal income taxes in 2018. Biden and Vice President-elect Kamala HarrisKamala HarrisObama looks to give new momentum to McAuliffe Kamala Harris engages with heckler during New York speech Biden's safe-space CNN town hall attracts small audience, as poll numbers plummet MORE said this was an outrage on the campaign trail, and they were spot on.
Climate change can’t be reversed, but a carbon tax would encourage energy efficiency and generate revenue for any number of aims, including boosting family income with significant cash rebates, or helping pave the way for good jobs in transit, wind, solar and conservation. In the long run, this will help reduce the tragic consequences of climate change.
Biden rightly campaigned to end policies that put the wealthy and corporations before ordinary people. Now he should follow through. Let’s tax earnings from capital gains the same way that we tax wages and salaries. Equalize taxes on corporate profits earned domestically and overseas. Close loopholes. Fund the IRS to improve enforcement, something that pays for itself many times over. Tax extreme wealth and restore a reasonable estate tax. And tax carbon emissions, using the proceeds to bolster financial security and ease the transition to good, green jobs and a less-polluting economy.
When Biden and Harris take office in 2021, policymakers should begin with a bold vision and work with those who disagree to get viable proposals that solve our collective problems. That starts with a tax policy that works for all Americans.