Some of Kamala Harris’s ultra-rich donors are aggrieved that she has endorsed a tax that would require people with over $100 million in income to pay 25% on their earnings. A key device in this proposal is to require the mega-rich to pay taxes on the increase in their capital gains whether or not they cashed in the asset. This tax would affect only about the 11,000 richest Americans.
That’s less than 0.05% of the U.S. population. But that tiny sliver holds about $8.5 trillion in wealth, as much as the bottom 84%.
Some of Harris’s donors have been kicking and screaming that this would be bad for entrepreneurship. This is preposterous. The golden years of America’s postwar growth occurred in an era when taxes on the rich were far higher than they are today.
The New York Times interviewed several unhappy donors. The Times quoted Aaron Levie, the chief executive of the cloud storage company Box, who has put $30,000 into Harris’s campaign and said he plans to give more. Levie told the Times that he and other Silicon Valley donors considered the tax proposal “quite punitive.”
“There’s optimism that this can’t possibly be real,” Levie added.
But the proposal is real, unless Harris caves in to donor pressure. The fact is that the Democrats will need a lot of new revenue to plug holes in the tax code once Congress revisits the Trump tax cuts, which expire next year.
The Democrats have pledged that no household with income of less than $400,000 will pay higher taxes. If Democrats succeed in restoring taxes on the rich to the rates that prevailed before the Trump tax cuts but do not raise taxes on anyone else, that would cost the government about $3 trillion over 10 years.
As our colleague David Dayen has written, Harris wants to restore the Child Tax Credit and enact a care agenda. She also wants to spend serious money on housing, which is desperately needed to restore some affordable rental housing and home ownership. The Child Tax Credit all by itself will cost up to $1.6 trillion over a decade.
The only way to pay for these and other national needs is by raising taxes on the very rich, who can well afford it. There was a time when some very wealthy people, such as Warren Buffett, were indignant that he was being taxed at a lower rate than his secretary. But today, Harris’s Silicon Valley billionaire donors are indignant that she would have the temerity to propose raising their taxes.
You have to wonder, what’s wrong with these people? How much money do you need? The fact is that most working families are scraping by on too little income, while the filthy rich have literally more money than they know what to do with.
One of the things that money buys is not just a preposterously lavish lifestyle but power. The billionaire donors to the Democratic Party have far too much of both. One thing a progressive Democratic administration can do, as Biden’s presidency has shown, is to help labor amass more economic and political power, both to help working people directly and to counter the power of capital.
Robert Kuttner is co-editor of The American Prospect (prospect.org) and professor at Brandeis University’s Heller School. Like him on facebook.com/RobertKuttner and/or follow him at twitter.com/rkuttner.
From The Progressive Populist, October 1, 2024
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