opinion

Debate should explore transformed tax and spending landscape

As Democrats gather for the final presidential debate before the Iowa caucuses, among all the worrying daily news there’s a hopeful long-term development.

The candidates and their Democratic colleagues in Congress have finally and fully rejected trickle-down economics and budget austerity in favor of bold progressive tax and spending visions. This fundamental shift in economic and political philosophy, the kind that only happens a few times a century — think the New Deal and Reaganomics — should be celebrated.

It’s remarkable how much and how quickly fiscal policies have advanced in just four years. In 2016, Hillary Clinton’s proposed $1.4 trillion in tax increases on the wealthy to pay for about the same amount in much-needed public investments was considered aggressive.

Now, even moderates in the Democratic field such as Joe Biden, Pete Buttigieg and Michael Bennet have announced tax and spending plans double and triple that size. Meanwhile, Bernie Sanders and Elizabeth Warren are addressing the issue on a whole different scale.

That’s welcome news for working Americans. Forty years of Republican tax cuts for the rich and corporations and budget cuts for the rest of us — interrupted occasionally by Democratic administrations that slowed the process but never completely reversed course — have led to widening economic inequality, decaying public services and a dysfunctional democracy.

That trend hit a crescendo with the Trump-GOP tax law enacted two years ago. Pitched falsely as a boon to the middle class, the plan in its first year gave members of the top 1% average $50,000 tax cuts, 75 times more the bottom 80% received. Promised $4,000 family pay hikes failed to materialize; instead of investing as promised, corporations handed their huge tax cuts to shareholders; and despite claims that the law would pay for itself, the deficit has predictably soared, giving conservatives more excuse to slash spending on vital services.

Now Democrats are wisely proposing we do just the opposite. They would demand the super wealthy and big corporations pay their fair share of taxes, then use that revenue to help create an economy that works for all of us, not just those perched at the top.

Importantly, they understand the real way to reduce economic inequality and raise the revenue we need is to tax wealth and not just income. The wealth taxes offered by Senators Sanders and Warren, and the annual taxation of investment gains made by the very rich proposed by Sen. Ron Wyden, top Democrat on the Senate Finance Committee, and by candidates Bennet, Booker, Buttigieg, Castro and Warren, attack the same problem from different angles.

Of course, even in this new era of progressive taxation, structural reforms like that won’t come easily. Smaller, quicker fixes — like the Millionaires Surtax introduced recently in Congress and co-sponsored by Sen. Amy Klobuchar — can raise substantial revenue, narrow income inequality and build a foundation for bigger change.

Politicians are as usual behind their constituents on this issue. Polling consistently shows voters of all ideologies and parties want the rich and corporations to pay more taxes.

Yes, the national tax and spending debate has been transformed. Moderators at the upcoming Iowa debate would serve voters well by asking questions that probe the scope and meaning of that transformation.

Frank Clemente is executive director of Americans for Tax Fairness. He can be reached at fclemente@americansfortaxfairness.org.