Biden’s plan to create jobs and tax the rich is a good deal bolder than it looks at first glance. Shutterstock photo.

FDR must be smiling

by Sam Pizzigati

President Joe Biden has made no secret of his admiration for Franklin D. Roosevelt. The president proudly displays a portrait of FDR in the Oval Office.

More significantly, he’s announced the most ambitious plan since FDR’s New Deal for enhancing the well-being of working Americans while trimming the fortunes of America’s super rich. The president has promised to fund his big plans for infrastructure, jobs, and education entirely with taxes on the top.

In fact, Biden’s new tax-the-rich plan is a good deal more Rooseveltian than the numbers, at first glance, might suggest.

In 1945, FDR’s last year in office, the nation’s most affluent faced a 94 percent tax on income over $200,000, a little more than $2.9 million in today’s dollars. The rates Biden has proposed come nowhere near those — they’d top out at just 39.6 percent of ordinary income over $400,000. That’s up only slightly from the current 37 percent.

But the gap between Biden’s plan and FDR shrinks big-time when we toss capital gains — the dollars the rich make buying and selling stocks and bonds, property, and other assets — into the picture.

In 1945, the nation’s deepest pockets paid a 25 percent tax on their capital gain windfalls. Today’s rate tops off at 20 percent. For households making over $1 million in annual income, the Biden plan would raise the top capital gains tax rate to 39.6 percent, the same top rate that applies to earnings from employment.

In other words, the Biden tax plan ends the most basic tax break for the ultra rich: the preferential treatment they get on the income from their wheeling and dealing. This would be a big deal. In 2019, 75 percent of the benefits from the capital gains tax break went to America’s top 1 percent.

Dividends currently get the same preferential treatment. Americans making over $10 million in 2018 took in over half of their total incomes — 54 percent — via capital gains and dividends. If Congress adopts the Biden tax plan, the basic federal tax on that 54 percent would just about double, from 20 to 39.6 percent.

The Biden plan also totally eliminates the federal tax code’s open invitation to dynastic family wealth: the “step up” loophole. Under this notorious giveaway, any fabulously wealthy American sitting on unrealized capital gains can pass those gains onto heirs tax-free. The Biden plan short-circuits the simplest route to dynastic fortune.

Under Biden’s tax plan, new dynastic fortunes would have a much harder time taking root. Already existing dynastic fortunes, on the other hand, would still be with us. Biden — like FDR in his day — has not yet warmed to the idea of a wealth tax.

Senator Elizabeth Warren led a recent hearing highlighting the enormous contribution that even a 2 percent annual tax on grand fortunes could make. Among the insightful witnesses at the hearing: the 61-year-old Abigail Disney, the granddaughter of Roy Disney, the co-founder of the Disney empire with his brother Walt.

“I can tell you from personal experience,” Abigail Disney told senators, “that too much money is a morally corrosive thing — it gnaws away at your character… It warps your idea of how much you matter, and rather than make you free, it turns you fearful of losing what you have.”

Franklin Roosevelt understood that debilitating dynamic well enough to propose, in 1942, a 100 percent tax on annual income over what today would be about $400,000. Biden hasn’t ventured anywhere close to that level of daring. But he’s certainly come much further than anyone could reasonably have expected.

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Nina Turner. Photo by Gage Skidmore.

Biden’s first 100 days show that we must have the courage to ask for more

by Nina Turner — Common Dreams

When we think back to the great achievements in American history, they are all tied together by the same story. Whether it was the creation of Medicare and Social Security or the success of the civil rights movement, the victories were won by the people and their elected representatives demanding both progress and justice, while rejecting the status quo.

Cleveland has a long tradition of being represented in Congress by Democrats who understand this lesson from history and do not just go along to get along. That is exactly the tradition we need right now.

Today, our city is at the center of America’s problem of poverty, inequality, deindustrialization, and racial inequity. That means we need to elect a congressperson who has both legislative experience working with Democratic leaders, and also the courage to push those leaders to do as much as possible to address the emergencies threatening our city, our nation, and our planet.

In President Biden’s first 100 days, progressives have pushed the administration further towards our position while recognizing that the job is far from over. The administration has taken important steps on a number of issues, from introducing a larger recovery bill to expanding the definition of infrastructure to include caregiving and the recent decision to raise the minimum wage for federal contractors to $15 an hour. These are significant steps in a positive direction for the country.

The strength of the progressive movement nationwide — and the grassroots’ courage to ask for more — has pushed this administration further than what many of us expected. But we cannot accept these moves as enough — they are only the beginning.

Having represented our community on the city council and in the state legislature, I have balanced the job of both negotiating with my fellow Democrats and pushing them to be bold — and I know how tough a task it is to make real progress. But I also know that while some may be comfortable with maintaining the status quo, that is not acceptable. This community needs a Democratic representative who will work arm-in-arm with the Biden administration and congressional leaders — and who will push them to deliver what we urgently need.

Cleveland is now the poorest large city in the country with nearly one-third of city residents living in poverty. Ohio’s 11th congressional district ranks in the top-ten nationally in child poverty, with nearly 60% of children living below 185% of the federal poverty line. Meanwhile, our region is continuing to lose jobs, as deindustrialization has decimated our local economy.

In light of that, we need a representative in Congress who has the courage to ask for more than just half measures — we need far-reaching initiatives like a federal jobs guarantee that will ensure all of our neighbors have the right to a good-paying union job.

Nearly 30 percent of workers nationwide, disproportionately Black and brown, make less than $15 an hour. Ohio’s minimum wage of $8.80 per hour is a starvation wage and is far too low for our people to reasonably survive while working full-time. We need a representative in Congress who has the courage to fight for a $15 minimum wage when members in our party are willing to accept less. Our neighbors deserve the dignity of a living wage.

Unionization rates, once sky-high in the industrial Midwest, have dropped significantly over the past few decades. Today only 13 percent of Ohio workers are represented by a union. While those in the pockets of big corporations are complicit in these companies’ extreme union-busting practices, we need a representative who will fight for workers’ rights to organize and improve working conditions. We must pass the PRO Act and deliver a real solution to big business efforts to limit worker power and line executives’ pockets.

During the pandemic, over 1 million Ohioans lost their employer-based health insurance, further demonstrating the ruthlessness of the American healthcare system. We need to push for universal healthcare, to ensure that no one is afraid of going bankrupt from seeing a doctor or changing jobs.

When it comes to civil rights and criminal justice, we need the same fighting spirit from our congressperson.

Republicans nationwide are proposing and passing deep cuts to voting rights, that will disproportionately impact Black and brown Americans who are already marginalized from the country’s voting system. Here in Ohio, reactionary Republicans have begun to lay the groundwork for a bill that would decimate voting laws. We must pass the For the People Act and the John R. Lewis Voting Rights Act to expand voting rights and provide oversight of states when they try to enact racist voting rules.

Black and brown people nationwide face a death sentence when they interact with police. It’s beyond time to move police away from responding to traffic stops, like the situation that led to a police officer killing Duante Wright. We must have a representative in Congress who will fight for these policies that will benefit our communities and divert funding from police to other social services proven to lower crime rates.

And finally, when it comes to our environment and the survival of future generations, we must recognize that climate change is an existential threat. Scientists say we only have a few years to stop irreparable damage to the planet — and our region is in particular danger of harm. That means we need a representative who is willing to fight for policies like a Green New Deal that will transform our economy and energy grids to save the planet.

It is easy to feel overwhelmed by all of these crises. But giving up or accepting an inadequate status quo cannot be an option. In this election, we have an opportunity to continue voting for transformational change and to elect a representative who will always fight the good fight for our community, even when it is hard. Progressives have planted the seeds that have made the first 100 days of this administration a positive step forward in delivering solutions for our many intersecting crises. And while it is important to acknowledge the accomplishments made, we must always have the courage to ask for more.

That is what I’ve done my entire life — and that is exactly what I will do in Washington.

Contact us by email at fund4thepanamanews@gmail.com

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