Paul L. Caron

Tuesday, June 2, 2020

Democrats Stick With Tax-Rise Policies As They Make Plans For 2021 Majority

Wall Street Journal, Democrats Stick With Tax-Rise Policies as They Make Plans for 2021 Majority:

The coronavirus pandemic shook the U.S. economy. It hasn’t shaken Democrats’ fervor for trillions of dollars in tax increases, and significant income redistribution is still likely as soon as 2021 if Joe Biden wins the White House and Democrats control Congress.

Democratic lawmakers and policy aides worry little that planned tax increases on corporations and high-income households would hinder the economic recovery. If anything, they argue that economic disparities evident during the pandemic make these tax increases more necessary. ...

Mr. Biden’s tax proposals are modest compared with those of his former rivals for the Democratic presidential nomination. Unlike Bernie Sanders and Elizabeth Warren, he hasn’t endorsed imposing annual wealth taxes.

Still, his proposals would undo major pieces of the 2017 tax law and raise taxes beyond what President Obama and 2016 nominee Hillary Clinton sought, generating $4 trillion over a decade. Republicans oppose those tax increases and will campaign against them, warning that they would slow growth and discourage investment. ...

Democrats say they learned a crucial lesson from the previous recession, which ended in 2009 while Mr. Biden was vice president. They say lawmakers moved too quickly to rein in budget deficits, unnecessarily slowing spending and the recovery. ...

Republicans say tax increases would be harmful and that reopening the economy is the best way to control the federal debt.

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