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

Federal Minimum Wage Reaches Disappointing Milestone

By Kathleen Mackey
USW Intern

A disgraceful milestone occurred last Sunday, June 16.

That date officially marked the longest period that the United States has gone without increasing federal the minimum wage.

That means Congress has denied raises for a decade to 1.8 million American workers, that is, those workers who earn $7.25 an hour or less. These 1.8 million Americans have watched in frustration as Congress not only denied them wages increases, but used their tax dollars to raise Congressional pay. They continued to watch in disappointment as the Trump administration failed to keep its promise that the 2017 tax cut law would increase every worker’s pay by $4,000 per year.

More than 12 years ago, in May 2007, Congress passed legislation to raise the minimum wage to $7.25 per hour. It took effect two years later. Congress has failed to act since then, so it has, in effect, now imposed a decade-long wage freeze on the nation’s lowest income workers.

To combat this unjust situation, minimum wage workers could rally and call their lawmakers to demand action, but they’re typically working more than one job just to get by, so few have the energy or patience.

The Economic Policy Institute points out in a recent report on the federal minimum wage that as the cost of living rose over the past 10 years, Congress’ inaction cut the take-home pay of working families.  

At the current dismal rate, full-time workers receiving minimum wage earn $15,080 a year. It was virtually impossible to scrape by on $15,080 a decade ago, let alone support a family. But with the cost of living having risen 18% over that time, the situation now is far worse for the working poor. The current federal minimum wage is not a living wage. And no full-time worker should live in poverty.

While ignoring the needs of low-income workers, members of Congress, who taxpayers pay at least $174,000 a year, are scheduled to receive an automatic $4,500 cost-of-living raise this year. Congress increased its own pay from $169,300 to $174,000 in 2009, in the middle of the Great Recession when low income people across the country were out of work and losing their homes. While Congress has frozen its own pay since then, that’s little consolation to minimum wage workers who take home less than a tenth of Congressional salaries.

More ...

A Friendly Reminder

A Friendly Reminder