It looks to me as if the Democrats have taken their takeover of the House as a permission slip to go crazy. Ever more crazy policies seem to bubble up from the Democratic political class lately (and I’m not even counting Governor Northram’s call for infanticide in blackface); specifically their tax policies.
The Democrat’s new socialist it girl, Alexandria Ocasio-Cortez (Commie-NY), suggested on 60 Minutes a top tax rate of 70% on the “tippy-tops,” which in English apparently means incomes north of 10 million dollars a year. Not to be outdone, competing freshman Congresswoman Ilhan Omar (D-Somalia) recommended a 90% income tax rate. Advocating a 90% tax rate is probably the most normal sounding policy Omar has recommended. After marrying her brother in an immigration fraud scheme and advocating for leniency for convicted terrorists, a 90% tax rate seems almost quaint.
These of course are joke policies. Their purpose is to look compassionate, and stoke envy, without accomplishing much of anything. As an example, National Review took a look at Ocasio-Cortez’s 70% income tax results:
“Representative Ocasio-Cortez floated the idea of limiting the 70 percent tax bracket to incomes over $10 million. My analysis of IRS data shows this would raise only 0.25 percent of GDP — about $50 billion annually — in part because nearly half of the income earned by these 18,000 filers comes in the form of capital gains that would be left outside a 70 percent tax on salary income.
Even $50 billion is surely too high of an estimate, because the kind of people with incomes over $10 million also have teams of accountants and tax lawyers finding every conceivable tax loophole and overseas income shift. “
“…Super-wealthy families often keep their wealth in the form of investments and other assets that can be converted into taxable income on their own schedule. Jeff Bezos may be worth $160 billion, but in 2017 he reportedly paid himself an annual salary of just $81,840, with total compensation (including deductible expenses) of $1.6 million. Taxing 70 percent of all salary and wages above $10 million (or even $1 million) would not even touch the Amazon founder. “
So it’s not even a drop in the bucket to pay for her Medicare for All, Green New Deal, and all the other free goodies AOC ran on.
But then came Elizabeth Warren…
Warren, who announced her candidacy for President yesterday, has beaten them both with a wealth tax. Warren’s wealth tax would apply 2% to individuals with assets over 50 million dollars and 3% for those with assets over 1 billion. Warren’s wealth tax should raise “$2.75 trillion over a 10-year period from about 75,000 families, or less than 0.1 percent of U.S. households…”
Now we’re talking about real money.
Of course there is a reason that wealth taxes like this are not common in the industrialized world. The most obvious of course is that the most powerful people in a country don’t want them. In fact, there are only a handful of countries that do have some sort of version of the wealth tax. Given how donors control the agendas of both parties, it’s hard to imagine how an Elizabeth Warren candidacy goes anywhere, and if it does, how this policy is implemented. Of course, I’ve been surprised before, not the least by the rapid dip into insanity the Democratic Party has dived into. It’s very possible that by the time we get to the Democratic convention, the wealth tax will be part of the platform.
One can hope…
But what strategy should the GOP use to fight back at tax policies that we know are both crazy and destructive? I’ve given some thought to this and I’m not sure that the GOP establishment would ever go along with it, but that’s par for the course for a party leadership that’s turned defeat into a talking point.
Consider this: It’s the near future, and a Democrat controlled House has on the floor Warren’s wealth tax increase. The vote whips think the votes will be close. Now if you are the Democratic leadership, you want the vote to fail because the donors don’t want any of this but the Democratic leadership does want the issue to run on. They’ve assured the donors that they think the Republicans will kill it so not to worry; it’s a great issue for 2020. The House roll call begins…and the Republicans do not vote. They vote “present” or whatever it takes to not register a vote against the bill. So what happens? The bill passes.
Of course, with the Senate still firmly in GOP hands, this won’t matter, but it sends two wonderful messages to two different groups of political donors:
To the Democrat donors: You’ve had your cake and eaten it to for too long. You’ve virtue signaled with the Democrats, counting on the party leadership and the Republicans to do your dirty work for you, mainly, killing bills that really threaten your interests. Now the GOP has decided to stop protecting you
To the Republican donors: We’re either going to be in the majority, or we’re not going to waste our time trying to save you from yourselves. If you don’t see the threat of real unfettered Democratic control, we’ll show you. You can help stop it or pay the piper. PS, it’s cheaper to help stop it.
To be clear, I don’t see any chance of the GOP leadership actually trying this. They are just too stupid to even consider not only any out of the box thinking, but challenging their donors. But for the Republicans, the donors are a real problem, and their control over the party is leading it to Paul Ryan-esque doom. Unless another rogue billionaire who doesn’t need donors comes along, the post Trump era may snap back to its former donor driven agenda; a party with plenty of donors, but few voters.