While the feckless media villagers were all fixating on the optics of a meaningless photo-op on Monday, some real news actually occurred that they should have reported on. Think Progress reports, Top Democrats In Congress To Release Unapologetically Progressive Tax Plan:
In a sharp departure from party leaders’ proposals over the last few years, Rep. Chris Van Hollen (D-MD) today announced an action plan to create, in his words, “the kind of economy where the pie is growing and everyone is getting a better slice.”
Van Hollen, the senior Democrat on the House Budget Committee, plans to introduce a series of proposals to create or expand tax breaks for child care, apprenticeship programs, middle class working couples, those who save for retirement, and companies that raise worker wages, while at the same time scaling back the tax break corporations currently claim for CEO bonuses.
The plan would be funded by a tax on Wall Street — a tiny fraction of a percentage levied on trades in stocks, equities and derivatives. Long demanded by progressive groups and labor unions, this tax has been introduced many times before but failed to pass even when Democrats controlled both the House and Senate.
Van Hollen defended the proposal Monday as one that would both curb “irresponsible” trading and provide a source of revenue.
“If you look at the typical trades of a typical family, they would never feel this,” Van Hollen told reporters, noting that the UK, France, Singapore and Hong Kong already have similar policies.* “If I had $100,000 worth of stock and I turned over my entire portfolio in a year, it would cost $100 bucks. When people go to the ATM machine, they take out $100 bucks, and they pay three bucks. That’s three times the percentage we’re talking about.” The policy, he explained, would be named for those it would impact most: the ‘High Rollers Fee.’
[* The U.S. had a version of the securities transaction tax from 1914 until it was repealed in 1965. When instituted in 1914, the tax on stock transfers was imposed at a rate of 2 basis points (0.02 percent). Between 1932 and 1958, this tax was imposed at rates that varied between 4 basis points (0.04 percent) to 6 basis points (0.06 percent). In 1959, this tax rate returned to 4 basis points (0.04 percent), where it remained until it was repealed in 1965.]
While many in Congress have been celebrating — and taking credit for — recent economic reports of increased growth and declining unemployment, Van Hollen emphasized Monday that many have yet to benefit from this recovery. Average worker pay has remained stagnant and in some cases declined over the last several decades. Most recently, the jobs gained after the recession are generally lower-paying and less stable than those lost.
“It’s no wonder so many Americans feel like they’re on a treadmill or falling behind,” said Van Hollen. “Republican trickle down economic theory has crashed miserably in the real world.”
The first piece of the action plan to address this is the CEO-Employee Paycheck Fairness Act, which will ban CEOs from writing off more than a million dollars in bonuses on their taxes unless they can prove they are also raising worker wages and are not laying off employees.
“This bill is simple: no raise for workers, no corporate tax breaks for executive bonuses,” Van Hollen explained.
Another proposal, the Paycheck Bonus Tax Credit, would give all workers making under $100,000 a year a break of $1,000. A proposed “Saver’s Bonus” would also give $250 a year to every worker who saves at least $500 a year, while a companion plan would raise the cap on the amount families can deduct for what they spend caring for a child or an elderly parent.
At Monday’s speech, Van Hollen bristled at the characterization of his plan as a “wealth transfer,” and instead framed it as a way to correct the current tilt toward the nation’s rich and powerful.
“We have a tax code that reinforces the preference for wealth over work. It’s tilted today towards those who make money off of money,” he said. “There are provisions that are only in here only because powerful elites paid lobbyists and succeeded in getting themselves special breaks, like the tax advantages for corporate jets or hedge fund managers.”
Democrats are increasingly turning to the more progressive, more populist positions that they largely ran away from last fall — ad Democratic voters failed to turn out to vote for them as a result.
Van Hollen told reporters a more ambitious vision is needed to address the country’s “staggering” inequality.
“The average voter out there is feeling the squeeze,” he said. “A lot of the proposals Democrats put forward in the past will help address issue, but they don’t address it with the force necessary to move the line on flat wages. That’s why I’m proposing this new action plan, and I look forward to this debate going forward.”
The Democratic tax plan, of course, has no chance of passage in the current Tea-Publican controlled Congress. But progressive tax proposals will frame the debate on which the 2016 election will be fought over income inequality and corporate Plutocrats reaping all the financial rewards of the increased productivity of American workers, who deserve a pay raise.