In Washington, good things happen only rarely. But even when they do, they must happen for the dumbest reasons.
In a nation like America where the middle 60% of earners hold less combined wealth than the top 1%, a wealth tax on the rich is a very good idea. And, against all odds, we are now on the precipice of maybe, just maybe, getting a wealth tax on billionaires signed into law. Have we come to this point because the democratically elected representatives of the citizens of America looked at some charts and said to themselves, “Damn — those billionaires really have too much of the wealth?” Not at all. We have come to this point for very dumb reasons. But we’ll take it.
Consider the bizarre chain of D.C. logic that has resulted in this policy finally coming close to fruition: After winning total control of the federal government, the Democratic Party decides to pass a big bill full of necessary social programs. That’s good. But it decides that all these programs must be “paid for” with new taxes. That is dumb, as we know, because the United States has a global reserve currency that it can print at will, within the bounds of inflation and the limits of our real economic resources. “Pay-fors” are essentially economic witchcraft. Nevertheless, many Democrats in Congress are strong believers in witchcraft, and they are still allowed to vote.
So the Democrats make up a whole suite of tax increases on corporations and investment zillionaires to pay for the big bill. Fine. Just a few years ago Donald Trump refunded a trillion dollars in tax cuts to his wealthy backers for absolutely no economic reason, so the tax dial has been turned too low for quite a while now. Then, a small subset of the same variety of Democrat who demands “pay fors” in the first place decides these tax increases are intolerable, because they would negatively impact our nation’s hardworking corporate lobbyists. And so we have now landed on the very real possibility of a tax directly targeted at the unrealized capital gains of billionaires — which is to say, a real live billionaire wealth tax — as a solution that will satisfy the witchcraft-worshiping “pay for” crowd without also pissing off the more powerful corporate lobbies. Most CEOs, after all, are worth only tens or hundreds of millions. Nobody really likes billionaires.
You may note that Democrats have now maneuvered themselves onto the brink of enacting a good policy for awful reasons. The proper way to approach this process from the beginning would have been to work from the twin premises that 1) Spending on major new social programs like child care and family leave and Medicare expansion are wise investments that will pay off many times over in future economic growth and, more importantly, quality of life, and B) Yes we should pass a suite of tax increases on the rich — not to “pay for” social programs, but because the staggering accumulation of wealth at the very top of the pyramid warps our democracy, distorts our politics, and poisons our society in ways that we are all living through right now. This reasoning would have gotten us to a healthier, happier place, with no detours. Instead, the Democrats (in fairness, a minority of the Democrats who are corrupt, incompetent, or both) have backed their way into a creakier, shabbier version of this outcome through sheer thickheadedness, like a drunk driver who blacks out and drives home on the wrong side of the road.
Still, we’ll take what we can get. If, in fact, the current version of the wealth tax does make it into the final bill, it will be something that should make progressives smile. It targets fewer than a thousand taxpayers — the richest of the rich — and it hits them with an assessment on the actual value of their wealth that should be hard to wiggle out of. This would be a time for some forthrightness from the left. While Republicans trot out the old “These things are so complicated!” and “It will hurt the job creators!” Democrats should strive to avoid their natural inclination to stammer and pull their collars and say “This is, uh, revenue producing! We’ll protect family farms!” Instead, they should stare right into the camera and say that they are taxing billionaires because billionaires have too much money.
The reason to tax billionaires is not to pay for social programs. The reason to tax billionaires is not to produce income for the federal government. The reason to tax billionaires is that billionaires should not exist. This is just a start. This is a message that the entire political spectrum not employed at right-wing think tanks can get behind.
There is nothing about the process that led to this outcome that is very admirable. But the outcome itself — along with the new agreement by 136 nations for a global minimum tax that is an important step towards cracking down on global tax evasion — means that the Biden administration has done just as much as a Warren or Sanders administration could have realistically done when it comes to taxing the rich. If we come out of Biden’s first two years with precedents established on both a wealth tax and a meaningful crackdown on overseas tax shelters, that is a real live win in the fight against economic inequality. That is something real to build on. That is more than I thought we would get. We can take a moment to feel good about that. Even if the reason was less “The rising embrace of democratic socialism,” and more “Coal companies hired better lobbyists than Elon Musk because he was too busy tweeting about Dogecoins.”
In a stupid world, stupid wins are okay.
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Hamilton Nolan is a labor writer for In These Times. He has spent the past decade writing about labor and politics for Gawker, Splinter, The Guardian, and elsewhere. More of his work is on Substack.
