'Taxing the rich is an incredibly rare sweet spot: a policy change that meets the approval of the party’s centrist technocrats and the voters and enables other popular and morally compelling reforms,' writes JonathanChait
When the Biden administration rolled out proposals to increase taxes on corporations and wealthy stockholders, the targets of the increases laughed them off. “Corporate executives and lobbyists in Washington, New York and around the country say they are confident they can kill almost all of these tax hikes by pressuring moderate Democrats in the House and Senate,” reported Politico last month.
The front pages have been consumed with Biden’s struggles to keep his party together on infrastructure and democracy protection. But the quiet Congressional revolt against his tax hikes poses the most serious threat to his agenda. Why are Democrats so skittish about Biden’s proposal they’re willing to put his domestic legacy at risk? They — or the rich people lobbying them — cite a mix of political and policy reasons. “You are talking about tax hikes that could hit millions of small businesses across the country and taxes that could kill investment,” the U.S.
The Tax Policy Center has found no meaningful correlation between capital-gains tax rates and economic growth over the last half century. The Congressional Research Service has reached a similar conclusion. A recent paper by two Princetown economists suggests the revenue-maximizing rate for capital-gains income would be in the low forties, about the level Biden proposes.
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