Warren’s proposals could fund entire reform packages

 Bill Knight column for 8-19, 20 or 21, 2021

 

 From Canton and Kewanee to Chicago and Shawaneetown, Illinoisans could use a hand, but not long after the Senate recently passed the $1.2 trillion Infrastructure Investment and Jobs Act, plus a budget resolution paving the way for a $3.5 trillion budget-reconciliation bill, some lawmakers started squawking about the price tag – despite the momentous benefits the measures would provide.

However, Sen. Elizabeth Warren (D-Mass.) last week reminded Congress that she has three proposals that would to raise more than enough money to pay for the initiatives by making corporations and the wealthy pay their fair share in taxes.

The bipartisan infrastructure measure would underwrite work on roads, bridges, airports, public transit, lead-pipe replacement and more; the reconciliation bill would fund key domestic social programs such as extending the child tax credits, expanding Medicare, making community colleges tuition-free, lowering prescription drugs, and launching clean-energy incentives.

 If Congress and the president were to adapt Warren’s wealth tax, create her tax on real corporate profits, and approve her Internal Revenue Service funding to catch rich tax cheats, some $5 trillion in revenue would be raised.

“Though not every Democrat agrees with every one of my ideas, Biden campaigned aggressively on a suite of progressive tax policies, and voters embraced these changes at the ballot box,” Warren wrote in the Washington Post. “No matter how loudly Washington lobbyists bleat otherwise, progressive tax policies are wildly popular. Americans understand that our tax system has been rigged to reward the rich and powerful at the expense of everyone else. So, let’s fix it.”

First, as she previously proposed, a 2% tax on the wealth of the top 0.05% (that’s 5/100 of 1%) of the nation’s wealthiest households would generate about $3 trillion over the next decade “without raising taxes on 99.95 percent of Americans,” she said. “It’s supported by 68% of the country, including a majority of Republicans.”

Next, Warren’s Real Corporate Profits Tax Act, which she introduced last week, could raise $700 billion over the next decade. It would create a 7% tax on income over $100 million that corporations report to their shareholders as “book profits,” not the profits they report on their tax forms. This could collect more revenue and help ensure that corporations actually pay what should be owed.

“These companies boosted their stock prices and increased CEO pay by telling their shareholders they raked in hundreds of millions of dollars in profits, while simultaneously telling the Internal Revenue Service that they don’t owe any taxes,” Warren said. “Only about 1,300 public companies would pay the tax.”

Her third idea is one Biden has supported: increasing IRS funding so the agency can more effectively find wealthy individual and corporate tax cheats. Pointing out that Congress drastically cut IRS funding in recent decades – resulting in the agency losing 20% of its enforcement budget and a third of its enforcement workers – Warren this spring introduced a bill creating yearly IRS funding of $31.5 billion, some 2.5 times higher than its 2021 budget, compared to Biden’s proposed $8 billion annual increase,. That could raise as much as $1.75 trillion, Warren said.

“It’s no surprise that audit rates for taxpayers making more than $10 million have plummeted,” she wrote. “This should enrage every American who plays by the rules. Over 70% of Americans support giving the IRS more resources to make sure the wealthy and corporations aren’t evading taxes. Let’s enforce the law.”

Elsewhere, a recent analysis released by the Fight Inequality Alliance, the Institute for Policy Studies, Oxfam International, and the Patriotic Millionaires group said if the world levied a 99% tax on only the profits billionaires made from COVID-19 – when “billionaire wealth surged by $1.8 trillion from the early days of the pandemic through last month,” Warren said – it could raise enough money to pay for a free vaccine for everyone on Earth — and have enough left over to provide $20,000 in cash to hundreds of millions of unemployed workers.

That’s may be an unrealistic notion, but it shows how much billionaires’ wealth grew while the rest of the world suffered during the pandemic and the extreme wealth of the richest people, which could be tapped for the common good.