- Biden economic adviser Heather Boushey wrote in the NYT that the US government has rewarded wealth over work.
- She says the Biden administration is seeking to change this, an implicit break with decades of policy.
- Biden’s proposals to increase taxes on the wealthy and corporations are in peril in Congress.
Heather Boushey, a member of President Joe Biden’s Council of Economic Advisers, sounded off in a New York Times opinion essay on who the government should work for — and who it’s left behind in recent decades.
“Millions of Americans don’t trust the government or its ability to improve their lives, and it’s not hard to see why,” Boushey writes. Instead, she says, politicians from both sides of the aisle have done everything from allowing monopolies to grow to slashing taxes for the wealthiest Americans.
It’s an argument in favor of Democrats’ sweeping reconciliation bill that would unwind some Trump-era tax cuts and funnel money towards social services and lower and middle-income Americans. That bill is currently in jeopardy as progressives and moderates seem unable to agree on shifting from the system Boushey decries to the one she wants.
Boushey writes that it is “now abundantly clear that the problem lies with a government that rewards wealth over work, that serves big corporate interests over working families.” Such a statement from a presidential economic adviser would have been unthinkable in the Obama administration, let alone the Trump one, but the identification of the widening chasm between wealth and work has gone mainstream in recent years, led by groundbreaking work from economists such as Thomas Piketty. Boushey is further confirming Biden’s radical shift on wealth and inequality.
Biden’s White House has been focused on taxes and inequality
Biden’s economic team has repeatedly used the press to hammer home the importance of Democrats’ proposed tax hikes to offset infrastructure as a move to address inequality and close tax gaps.
“The president has put forth a robust tax agenda that rewards work, not wealth, one that will ensure companies pay their fair share and encourage them to keep jobs in America,” Boushey writes.
Last week, White House economists released their own analysis of how much the wealthiest Americans pay in taxes. They found the 400 wealthiest families in America pay about 8.2% in income taxes annually; significantly, they included assets like stocks as part of those incomes.
Under House Democrats’ proposed tax plan, capital gains — the profits from selling assets like stocks — would be taxed at 25% instead of 20%. The wealthiest Americans often derive more of their income from assets, while many Americans rely on wages for income. That means that while lower-earning Americans pay higher income taxes on their wages, wealthy Americans are often taxed at the preferential rate for capital gains. Democrats also want to impose a 3% “surtax” on people earning over $5 million, although that still wouldn’t be an outright wealth tax, since it targets income and not assets.
Democrats also want to hike the corporate rate to 26.5% for companies that earn over $5 million. Both the corporate rate and capital gains increases are lower than Biden’s original proposals.
—President Biden (@POTUS)
Boushey writes that Biden’s “vision for the economy” has resulted in the two bills currently going through Congress: a bipartisan infrastructure bill and Democrats’ party-line reconciliation bill. However, both are currently in jeopardy.
Progressives have repeatedly warned that the two bills must move forward together. But moderates have been reluctant to commit to moving the massive reconciliation bill forward, and Pelosi has moved to decouple them. Now, progressives are making noises about torpedoing the bipartisan bill in retaliation.
“Congress has a choice to make,” Boushey writes. “Does it want to grow our economy by investing in the middle class and the public sector, and fundamentally recalibrating the relationship between government and the people it represents, or continue giving billions in tax handouts to the wealthiest Americans and multinational corporations?”