Seriously Taxing the Rich Will Take ‘Guts’ — and More

Sam Pizzigati

Sam Pizzigati Editor, Too Much online magazine

Jan Schakowsky doesn’t need to apologize for anything. This veteran member of Congress from Illinois has a record second to none on issues that matter to working people. Over the course of her 20 years on Capitol Hill, Schakowsky has introduced much more than her share of innovative legislation, bills like her Patriot Corporations of America Act, a measure designed to give companies that pay their top execs only modestly more than their workers a better shot at winning government contracts.

But today, in a special Congressional Progressive Caucus Capitol Hill briefing on taxes, Schakowsky did some apologizing of sorts. Her previous attempts at making the U.S. tax code more progressive, she acknowledged, had called for a tax rate on America’s highest income bracket at no more than 49 percent.

Schakowsky called that 49 percent — a figure close to the top rate during most of the Reagan years and a dozen points over the current top rate — the highest rate she “had the guts” to propose. But then, she added, along came Alexandria Ocasio-Cortez and her call last month for a 70 percent top rate “for the richest among us.”

“And lo and behold,” smiled Schakowsky, referencing the favorable polling on that 70 percent proposal, “the American people think that’s a good idea.”

Schakowsky went on to pledge that she’ll be working with Ocasio-Cortez, her Congressional Progressive Caucus co-host for today’s tax briefing, to draft legislation that enshrines a new, considerably higher top rate in America’s tax code.

In a sense, the bold Ocasio-Cortez move to propose a 70 percent top rate — a rate totally unimaginable in polite political circles just weeks ago — has liberated Schakowsky to go as bold on taxing the rich as she has always wanted to go, and that couldn’t be better news. Today, at a time of intense income and wealth concentration, we need to be bold — on multiple tax fronts.

We need, as Rep. Ocasio-Cortez has proposed, to restore the top marginal tax rates that did so much in the middle of the 20th century to check grand fortune. But we can’t be content to just recreate that mid-century progressive tax structure. We need to do what egalitarians back then could not do. We need to make steep top rates politically sustainable over the long haul.

And how might we do that? At today’s Congressional Progressive Caucus briefing, Economic Policy Institute president Thea Lee highlighted one promising approach: We could start linking income tax rates for America’s richest to the minimum wage for America’s poorest.

If the tax code set the threshold for a new, much higher top tax rate as a multiple of the minimum wage, Lee explained, those at our economic summit would be more personally “invested in raising the minimum wage.” The higher the minimum wage, the less of their income subject to the top marginal tax rate. People at our economic bottom, for their part, would have a direct personal stake in keeping that linkage — and steeply progressive tax rates — in place.

Lee also noted another linkage proposal that analysts at the Institute for Policy Studies have been advocating: tying the U.S. corporate tax rate to the ratio between CEO and worker pay.

If the tax code fixed a higher corporate tax rate on companies with wide gaps between executive and worker compensation, the Economic Policy Institute’s Lee pointed out, corporate enterprises would have a powerful “incentive to raise their worker pay”and, in the process, help reduce our income gap before taxes.

Our tax rates, Ocasio-Cortez observed in her remarks at today’s Congressional Progressive Caucus briefing, can be a mighty tool to help us “mitigate inequality.” Yes, tax rates can certainly play that essential role — but only, her briefing strongly suggested, if we stay bold.

***

Reposted from Inequality.org

Sam Pizzigati edits Too Much, the online weekly on excess and inequality. He is an associate fellow at the Institute for Policy Studies in Washington, D.C. Last year, he played an active role on the team that generated The Nation magazine special issue on extreme inequality. That issue recently won the 2009 Hillman Prize for magazine journalism. Pizzigati’s latest book, Greed and Good: Understanding and Overcoming the Inequality that Limits Our Lives (Apex Press, 2004), won an “outstanding title” of the year ranking from the American Library Association’s Choice book review journal.

Posted In: Allied Approaches

Union Matters

The Big Drip

From the USW

From tumbledown bridges to decrepit roads and failing water systems, crumbling infrastructure undermines America’s safety and prosperity. In coming weeks, Union Matters will delve into this neglect and the urgent need for a rebuilding campaign that creates jobs, fuels economic growth and revitalizes communities. 

A rash of water main breaks in West Berkeley, Calif., and neighboring cities last month flooded streets and left at least 300 residents without water. Routine pressure adjustments in response to water demand likely caused more than a dozen pipes, some made of clay and more than 100 years old, to rupture.

West Berkeley’s brittle mains are not unique. Decades of neglect left aging pipes susceptible to breaks in communities across the U.S., wasting two trillion gallons of treated water each year as these systems near collapse.

Comprehensive upgrades to the nation’s crumbling water systems would stanch the flow and ensure all Americans have reliable access to clean water.

Nationwide, water main breaks increased 27 percent between 2012 and 2018, according to a Utah State University study.  

These breaks not only lead to service disruptions  but also flood out roads, topple trees and cause illness when drinking water becomes contaminated with bacteria.

The American Water Works Association estimated it will cost at least $1 trillion over the next 25 years to upgrade and expand water infrastructure.

Some local water utilities raised their rates to pay for system improvements, but that just hurts poor consumers who can’t pay the higher bills.

And while Congress allocates money for loans that utilities can use to fix portions of their deteriorating systems, that’s merely a drop in the bucket—a fraction of what agencies need for lasting improvements.

America can no longer afford a piecemeal approach to a systemic nationwide crisis. A major, sustained federal commitment to fixing aging pipes and treatment plants would create millions of construction-related jobs while ensuring all Americans have safe, affordable drinking water.

More ...

There is Dignity in All Work

There is Dignity in All Work