For Immediate Release
Thursday, October 28, 2021
Contact: Sam Quigley
“Democrats Take First (Very Small) Step in Tax Justice Journey of 1,000 Miles”
Patriotic Millionaires Applaud (Tiny) Step in the Right Direction on Federal Tax Code/Unrigging the Economy
With Senators Manchin and Sinema still non-committal, PM Group encourages Progressive Caucus to “hold the line,” refuse to vote on infrastructure bill until BBB is passed
Washington, DC – This morning, the Biden administration released a framework for its Build Back Better Agenda that includes modest new taxes on some wealthy individuals, important reforms to the corporate tax code, and enhanced IRS enforcement to limit tax cheating by America’s richest citizens.
In response, Patriotic Millionaire Chair Morris Pearl, a former Blackrock executive, said,
“While the federal tax code will continue to drive economic inequality by taxing income from wealth significantly less than income from working, today, for the first time in decades, one political party decided it was time to change direction. That is a great and important first step. The Biden framework will collect billions of dollars from hugely profitable corporations and individuals and use those resources to invest in our children, our seniors, and our nation.”
Erica Payne, president and founder of the Patriotic Millionaires, said,
“It’s a tiny, tiny, tiny, tiny, step, but it’s a step. And the fact is if Republicans were still in charge they’d sell the Constitution before they would even consider raising taxes on their donors. So we’ll take the win and then immediately get to work on all the things they didn’t get done in this bill.
And to be clear, Progressives in the House must continue to hold the line. They must not pass the infrastructure bill until BBB is also passed.”
Stephen Prince, Vice-Chair of the Patriotic Millionaires, said,
“For decades, the richest people in America have been able to legally avoid their responsibilities. Today, Democrats led by President Biden took a critical first step in reversing that trajectory. We have to start sometime – and that time is now – to return our nation to one that benefits ALL Americans, not just we wealthy.”
Here’s the good stuff:
- On the corporate side: Democrats demonstrated a reasonable commitment to reform. The structure of the corporate tax code is more important than the rate. It will be much harder for corporations to avoid taxes, and this plan is in line with the ongoing push for global tax reform.
- On the enforcement front: New IRS funding will make it much harder for multimillionaires and billionaires to steal from the country and hard-working Americans.
- On the personal side: The surtax on multi-millionaire income demonstrates that Democratic lawmakers understand the marginal utility of money. While they refused to equalize rates on ordinary income and capital gains over $1 million as the President asked, they at least moved the rates a bit closer together for the very top earners. We will continue to push for all income over $1 million – including inheritance income – to be treated equally in the tax code.
Here’s what’s left to be done:
- Implement a Billionaires Income Tax. Billionaires should not be able to pick and choose when to pay taxes, and the ability to defer payment on unrealized gains has allowed the richest people in the country to avoid paying almost any taxes. Those gains should be taxed annually, just like working people have to pay taxes on their income every year.
- Equalize tax rates on all income over $1 million, including capital gains and inheritance income. No one who is making their money off of passive investments or by waiting for someone to die should be paying a lower tax rate than someone who actually works for a living.
- Eliminate the stepped-up basis. Wealthy families should not be able to completely avoid paying capital gains taxes on billions of dollars in assets upon transfer.
- Limit the 1031 Exchange. Wealthy real estate developers (like a certain former President) should not be able to build real estate empires by flipping properties and continually and indefinitely deferring capital gains taxes.
- Implement several additional tax brackets over $1 million. Raise marginal rates on incomes over $1 million, $5 million, $10 million, and so on.