That says a lot about the opposing visions of the two parties. One still fights for the little man in practical, concrete terms, while the other proposes one rash plan after another with no regard for the needs of the average American.
Biden’s US bailout extended the child tax credit by one year and made it permanently fully refundable, meaning parents receive the money no matter how much they owe in taxes. Biden kept his promises not to tax anyone making less than $400,000 a year and to make companies pay more. . Much to the chagrin of tax evaders (and their sympathetic Republican politicians), the law also boosted Internal Revenue Service funding to crack down on tax evaders.
None of these were radical code changes. More far-reaching plans to raise the individual top marginal tax rate, raise the corporate tax rate, equalize the tax treatment of capital gains and ordinary income for those earning more than $400,000, and to abolish the step-by-step estate tax base are never over .
The principle underlying all these measures, which would be relatively minor adjustments that would not affect the vast majority of Americans, was simple: the wealthy got by very well and should pay more taxes; working and middle-class taxpayers should not.
“Over the past 40 years, the rich have gotten richer, and too many companies have lost their sense of responsibility to their employees, their communities and the country,” Biden said in a September 2021 speech. “CEOs used to earn about 20 times the average worker in the business they ran. Today they earn more than 350 times what the average employee in their company earns.” He added: “Since the pandemic began, billionaires have seen their wealth increase by $1.8 trillion. That is, everyone who was a billionaire before the pandemic started, the total accumulated wealth above the billions they already had has increased by $1.8 trillion.
This grotesque widening of income inequality disturbs most Americans, who consistently tell pollsters that the rich should pay more.
GOP politicians and their wealthy donors see things differently. The first tax measure proposed by the MAGA House was to try to take money back for the IRS to hunt down tax evaders.
“The debate should focus on one precise and alarming number: the IRS has 2,284 less competent auditors to handle the sophisticated returns of wealthy taxpayers than in 1954,” wrote Chuck Marr of the Center on Budget and Policy Priorities. “The decade-long House Republican-led budget cuts have created dysfunction at the IRS, where relatively few millionaires are now audited.”
But allowing tax evaders to avoid paying what they legally owe is not the sum total of GOP thinking about taxes. “As part of his deal to become speaker of the House,” Semafor reported, “Kevin McCarthy reportedly promised his party’s conservative hardliners a vote on legislation that would scrap the entire U.S. tax code and replace it with a giant national sales tax.”
A massive 30 percent sales tax would be grossly regressive, bringing it to the same working- and middle-class families that Republicans ostensibly fear paying more at the gas station and grocery store because of inflation.
You know the idea is rotten when Grover Norquist, the head of Americans for Tax Reform, disapproved of the move. He told Semafor, “This is a political gift to Biden and the Democrats.” Even Norquist knows that because the poor and middle class spend a much higher percentage of their income on necessities like food and clothing, the consequences would be devastating.
Unsurprisingly, the Democrats seized the opportunity to destroy the plan. Senator Elizabeth Warren (D-Mass.) tweeted:
Wait a minute: House Republicans want a 30% national sales tax on everything from groceries to gas? They want to raise taxes for working-class and middle-class families while lowering them for millionaires and billionaires?
TRYING to show them exactly how unattainable they are?
—Elizabeth Warren (@ewarren) January 19, 2023
Biden also hammered Republicans: “National sales tax, that’s a great idea. It would increase taxes on the middle class by taxing thousands of everyday items, from groceries to gas, while cutting taxes on the wealthiest Americans.”
The GOP plan boils down to this: Let wealthy tax evaders get away with not paying what they owe while redoing the entire tax system so that the overwhelming burden falls on those less able to pay. Genius! Well, if you’re a Democrat running in 2024.
The plan is unlikely to even get a vote. But it is indicative of the utter lack of seriousness that pervades the GOP. They toss out one stupid idea after another, hoping to satisfy some of their bases or donors, with no care in the world for the needs of their constituents, nor for the real challenges we face.