Stop me if you’ve heard this one before: Elected officials are calling faith leaders and social workers to Capitol Hill to talk about how the U.S. might begin helping the poor.
It’s true: House Budget Committee Chairman John Yarmuth (D-KY) is bringing leaders from the Poor People’s Campaign to testify about what’s gone wrong in America, and how it might be righted. Revs. William Barber II and Liz Theoharis will sit alongside a half-dozen other likeminded invitees to lay out their ideas about how the devastating effect of years of compounding income inequality can be reversed — if only lawmakers want to do it.
There’s a lot at stake, and it doesn’t get any easier in an election year that will drive the intra-party ideological battles of the Democratic party into focus, And underlying it all will be the latest edition of what these left-populist leaders call the Moral Budget. The newest edition of that idea, released Monday through the Institute for Policy Studies and the Poor People’s Campaign, strikes a dramatically louder and more aggressive tone than its predecessors.
Barber and his allies say they have figured out how to raise nearly $9 trillion toward the public interest, all without cutting a penny from programs that benefit the poor and the striving. By their telling, the Moral Budget is a paradigm-breaking document, especially in a Washington that’s been strangled by budget caps and government shutdown fights.
The core of the $9 trillion revenue plan – which itself is but one component of the Moral Budget – comes in the form of changes to how individuals and families pay taxes in America. But the Moral Budget lives a double life: It’s both a map of a potential rosier future as well as a keen and subtle documentation of how America came to this point of strife and division. Seeking solutions to America’s current crisis within its passages and footnotes, the Moral Budget elucidates how the United States came to elevate the reactionary, spleen-based politics that put President Donald Trump in the White House.
Though the packaging may be new, and the conversation this time may be informed by a particularly Trumpian societal conflagration, the various elements of the Moral Budget arise from a history that includes the recent past as well as dating back to the fateful 1960s organizing drive from which Barber and Theoharis’s present work takes its name.
A proposed 5.5% surtax on incomes above $1M is from the 2011 American Jobs Act — one of the earliest attempts to grapple with the brewing populist rage of the Great Recession, crafted and pushed by the Obama/Reid leadership bloc in an era that almost seems quaint less than a decade later. Republicans blockaded the bill, led by then-Senate Minority Leader Mitch McConnell (R-KY) and then-Speaker John Boehner (R-OH).
Boehner’s and McConnell’s fortunes and public profiles have greatly diverged since. Boehner now golfs and lobbies for marijuana legalization. McConnell, meanwhile, has cottoned to the Trump era with rare aplomb, entirely unfazed by Trump’s trademarked politics of racial resentment. He spent a floor speech Tuesday decrying the very idea that anyone living today should care about trying to repair the national wound of slavery, thanks to the election of a black president he went to extreme lengths to thwart at every turn.
A 70% top marginal income tax rate for individuals is nicked, lovingly, from Rep. Alexandria Ocasio Cortez’s, who would tax the ten-million-and-first dollar earned by individuals at a level reminiscent of America’s years of economic expansion. Though the freshman Representative took flak for this proposal, her popularity and the economics profession’s habitual attraction to thought experiments quickly put analytic meat on her conversational bone.
The Moral Budget’s projection of a $353 billion ten-year projection from this measure is pulled from one of several estimates of a 70% top rate issued in January by economists from the Wharton School. The same report notes that with different, more complicated assumptions about how America’s hyper-rich would maneuver to avoid the obvious intent of such a tax law, projected revenue could drop to just about half the level the Moral Budget asserts.
It’s an open question, and an important one, but in its presence alongside the 8-year-old notions plucked from the Reid-Obama jobs package that provoked such baldfaced obstructionism from the pre-Trump GOP, the AOC-inspired figure hints at part of the thematic point being made in the Poor People’s Campaign. The ideas needed to break the one-percenter stranglehold on American life are conceivable. The status quo can be broken.
Taxing capital and labor income identically, across generations – Two of the Moral Budget’s heftiest revenue raisers come from another early-2019 source document, this time a roadmap for progressive tax policy issued by the Institute on Taxation and Economic Policy. Nearly $2.3 trillion of the ten-year haul derives from that February proposal’s two weightiest components.
The first would put capital gains taxation on a level with labor-income taxation, ending the permanent favorable treatment of those wealthy enough to sit back and watch their money make money for them. The country could harvest $1.5 trillion over a decade just by ending the preferential treatment of rich people’s lifestyles that’s been treated in unquestioning, quasi-religious fashion by generations of U.S. policymakers.
As with the more skeptical source document the budget uses to gauge an AOC-style top rate, the ITEP projection is careful to note the importance of overlapping reforms to capital taxation here. Pull too few of the strings they suggest, the report’s authors warn, and you leave the richest an escape path to continue hiding their money in new ways.
The Moral Budget incorporates this warning, layering on a second suggestion from ITEP’s wide-ranging palette. By ending the similarly dogmatic U.S. practice of allowing very rich kids to not pay the back taxes their plutocrat parents avoided by never liquidating on-paper wealth during their own lifetimes, the public would see a further $780 billion ten-year money shower.
Make Aristocrats Pay Again – The right’s political crusade against making rich kids pay taxes on huge inheritances from their parents has been a sweeping success over the past 20 years. Republicans, who managed to label such piper-paying “the death tax,” convinced ordinary Americans that it was a grave concern to them when it in fact only ever affected those looking to hand down multi-million-dollar fortunes. This ideological coup got its ultimate consummation in the Trump tax bill two years ago, with the threshold for paying any estate tax hiked to $11 million per person, or $22 million for a married couple. Revising this threshold back to the $3.5/$7 million level where it formerly stood would pull in another $400 billion over ten years.
Here, too, the Poor People’s Campaign is straddling political generations. Yes, the Mark Zandi analysis it cites for estimates of how much could be raised by restoring the tax on American aristocracy to its former, modest glory is less than a year old. But the fight over the “death tax” goes back to the ‘90s and beyond. The bald-faced lie that its earlier iteration hammered modest, hardscrabble farming families rather than hedge fund plutocrats and seventh-generation scions of the Robber Baron era? That’s a tall tale from the Karl Rove-George W. Bush years, cribbed it from the generation of right-wing think tank analysis that preceded that administration — which was largely underwritten by those who angled to benefit from a tax break for plutocrats back before those folks just bought elections wholesale thanks to Citizens United.
Warren’t You Glad I Didn’t Say Banana – The Moral Budget’s single biggest line-item on reversing plutocratic conquest of American society comes straight out of Sen. Elizabeth Warren’s (D-MA) first major presidential campaign policy proposal. The faith leaders’ plan hoovers up Warren’s surtax on the largest fortunes – 2 cents on every dollar if you’re worth more than $50 million, and another penny per buck for all you literal billionaires out there – in wholesale fashion.
Just like that, there’s another $2.7 trillion over your first 10 years. And that’s just using the most cynical projections from a quick-and-dirty analysis Warren commissioned from leading inequality researchers Gabriel Zucman and Emmanuel Saez. The letter the two furnished her in support of that $2.7 trillion estimate notes that they assumed a level of tax evasion and avoidance by the wealthiest American families that is “on the conservative side,” for fear of overpromising.
Like other elements, this plank in the platform finds its origins in conversations from the distant past. Saez, Zucman, and their colleague Thomas Piketty put the radical chasm between the haves and have-nots into the spotlight starting soon after the global financial crisis. The speed with which rich people and megabanks bounced back to their pre-crisis levels of wealth and income, as working people the world over drowned in debt and unemployment, helped galvanize popular attention to that wonky work. Policymaking elites exacerbated matters by imposing austerity on the have-nots during this same period.
This is important history to understand because this is how the United States ended up with Trump in the White House, alongside senior advisers who’ve turned his venal narcissistic ambition into actual political success. It’s how smaller European countries got even more openly ethnonationalistic leaders. It’s how center-right Tories in the U.K. blundered into Brexit. It’s how neo-fascist parties achieved election success unseen in half a century in Greece, Germany, and France. It’s how the comparatively young but geopolitically crucial democracies of Brazil and Spain followed suit to varying degrees. The history of elite fiscal policy misjudgments have left a parade of horribles with which to come to grips.
Perhaps the image of Revs. Barber and Theoharris being cuffed by grim-faced security forces at protests have become an unremarkable sight in these crisis years. Perhaps the inclusive, left-leaning worker’s populism that drove the Fight for $15 into the national spotlight and created the groundswell of Moral Mondays that eventually led to the present Poor People’s Campaign has become callused over too.
But when the preachers and the politicians meet Wednesday morning to talk about this Moral Budget, they’ll be drawing on all of this history, insisting that none of it had to play out this way because the keys to a just and inclusive society have been within our grasp this whole time, and remain so — if only those in power would bother to notice them. They’ll get another chance.