CNBC - Biden tells donors he will end most of Trump's tax cuts 'and a lot of you may not like that'

[TiltsAreUnderrated]

I am cautiously pessimistic about this. I understand there's a reason to keep some of the tax cuts (e.g. for lower earners and for stimulus reasons assuming a recession is ongoing or a constant risk), but rolling back only half of the corporate tax cut (35% -> 21% -> 28%) suggests the deepeneing of wealth inequality is going to be allowed to continue in the main.

[TiltsAreUnderrated]

He should repeal all the tax cuts passed since 2001.  

I disagree, but this thread has a few red avatars getting hyped up over Biden conceding he won't even attempt to completely reverse the economic record of this administration.

There's much more room for positivity in what he's saying about capital gains loopholes than "I will reverse the bulk [but thanks to the TCJA, you'll still be better off than under Obama]." Taken alone, that would imply managed decline rather than incremental progress.

[TiltsAreUnderrated]

I am cautiously pessimistic about this. I understand there's a reason to keep some of the tax cuts (e.g. for lower earners and for stimulus reasons assuming a recession is ongoing or a constant risk), but rolling back only half of the corporate tax cut (35% -> 21% -> 28%) suggests the deepeneing of wealth inequality is going to be allowed to continue in the main.

Corporate tax cuts are good, actually.

Up to a point, lowering them provides the stimulus necessary for businesses to thrive more (which may well be exacerbated for some time during and after the coronavirus crisis).

Outside of the potential for stimulus, the US is well past that point and much of the apparent benefit of lowering the rate only exists because corporate tax rates have been progressively lowered around the world for the last few decades in line with globalisation. Lowering it in the US will exacerbate the race to the bottom elsewhere, further incentivising companies to move their operations abroad.

This is what the US has to show for its efforts. It's way worse in lots of other countries, most of which don't tax companies which operate within their borders but are registered abroad.

International agreement must be sought on corporation tax reform or this will continue and every country will be pressured to lower its corporation tax rate further and further (an alternative is "tech company" gimmick taxes being implemented abroad; the US is currently lobbying against a proposal over here to do this). In the meantime, the US could show world leadership by lagging behind in the race to help the largest transnational corporations and perhaps even consider the Destination-Based Cash Flow Tax Congressional Republicans considered in exchange for a tax cut when they were feeling populist (the Koch brothers shot this proposal down and that's grounds for serious consideration by the Democrats).

It's the top-bracket income tax rate that needs to not only be returned to 2016 levels but raised.

Agreed, but the deficit the next government is going to face will be so huge as to encourage a very high rate if it looks to income tax rises alone. It should instead try to tax wealth in some way (personally, I prefer LVT) and shift the emphasis towards taxation of economic power rather than taxation of economic activity.

[TiltsAreUnderrated]

Keep in mind, Taxing the rich more will simply make them want to leave the country.

It's a good thing income is taxed abroad, then.

[TiltsAreUnderrated]

This is exactly what he was saying in those "infamous" comments when he said "nothing will fundamentally change." The full context was "I'm gonna tax the hell out of you, but nothing will fundamentally change in your lifestyle because you're so rich you'll hardly even notice it, so get over it."

Doesn't stop Bernie or Busters from taking it out of context and pretending he was actually saying that he would be a tool for the wealthy elites.

Not quite:

"By the way, you know, remember I got in trouble with some of the people on my team, on the Democratic side, because I said, 'You know what I've found is rich people are just as patriotic as poor people.' Not a joke. I mean, we may not want to demonise anybody who has made money. The truth of the matter is, you all, you all know, you all know in your gut what has to be done. We can disagree in the margins but the truth of the matter is it's all within our wheelhouse and nobody has to be punished. No one's standard of living would change, nothing will fundamentally change. Because when we have income inequality as large as we have in the United States today, it brews and ferments political discord and basic revolution. Not a joke. Not a joke. I'm not [inaudible] revolution. But not a joke. It allows demagogues to step in and say 'The reason where we are is because of the other, the other.' You're not the other. I need you very badly. I hope if I win this nomination, I won't let you down. I promise you. I have a bad reputation, I always say what I mean. The problem is I sometimes say all that I mean."

I happen to think Biden's improved since then and don't entirely disagree with the above, but at this point, he should not be telling these donors he needs them very badly. They aren't going to stop lobbying against his reforms just because he appreciates or depends on them; ideally, they should be afraid that if they obstructed his economic agenda, he'd facilitate their opponents rather than merely acknowledging their existence.

As for the demagoguery of left-populism, I also agree it's not ideal, but it is now a useful tool in a very flawed democracy. The kind of thinking Biden espoused in the above runs contrary to Obama's very effective painting of Romney as an elitist.

[TiltsAreUnderrated]

Keep in mind, Taxing the rich more will simply make them want to leave the country.

It's a good thing income is taxed abroad, then.

I didn't know income was taxed abroad. That's fine then.

Only above around $100k and it's easier to find tax avoidance loopholes in a world with a globalised economy but an insufficient regulatory framework to match. However, it is one of the reasons that "They'll move abroad," carries a lot less weight in the US.

[TiltsAreUnderrated]

I must say Joe is trying very hard to make me enthusiastic about him.

He's taking a page out of the (Canadian) Liberal Party playbook: Campaign from the left, govern from the center.

Also known as taking a page from the man who had Biden as VP.
Sounds reasonable, no?

Less reasonable than sticking to one's campaign promises. Doing otherwise can damage faith in democracy and arguably was a big part of what brought the US to the Trump point.

Governing as an incrementalist is reasonable. Governing as Obama did would would not be - Obama was not merely moderate in his aims, but moderate in what he was prepared to do to see them realised (understandable at the time due to a theory which had not yet been debunked - that voters, eventually, would punish Congressional Republicans for obstructionism). If Biden isn't prepared to play hardball and use executive power as a check on gridlock, and if he isn't prepared to stand up to the worst of the lobbyists, he risks falling into nastier version of most of the pitfalls of the Obama presidency.

[TiltsAreUnderrated]

This is exactly what he was saying in those "infamous" comments when he said "nothing will fundamentally change." The full context was "I'm gonna tax the hell out of you, but nothing will fundamentally change in your lifestyle because you're so rich you'll hardly even notice it, so get over it."

Doesn't stop Bernie or Busters from taking it out of context and pretending he was actually saying that he would be a tool for the wealthy elites.

Not quite:

"By the way, you know, remember I got in trouble with some of the people on my team, on the Democratic side, because I said, 'You know what I've found is rich people are just as patriotic as poor people.' Not a joke. I mean, we may not want to demonise anybody who has made money. The truth of the matter is, you all, you all know, you all know in your gut what has to be done. We can disagree in the margins but the truth of the matter is it's all within our wheelhouse and nobody has to be punished. No one's standard of living would change, nothing will fundamentally change. Because when we have income inequality as large as we have in the United States today, it brews and ferments political discord and basic revolution. Not a joke. Not a joke. I'm not [inaudible] revolution. But not a joke. It allows demagogues to step in and say 'The reason where we are is because of the other, the other.' You're not the other. I need you very badly. I hope if I win this nomination, I won't let you down. I promise you. I have a bad reputation, I always say what I mean. The problem is I sometimes say all that I mean."

I happen to think Biden's improved since then and don't entirely disagree with the above, but at this point, he should not be telling these donors he needs them very badly. They aren't going to stop lobbying against his reforms just because he appreciates or depends on them; ideally, they should be afraid that if they obstructed his economic agenda, he'd facilitate their opponents rather than merely acknowledging their existence.

As for the demagoguery of left-populism, I also agree it's not ideal, but it is now a useful tool in a very flawed democracy. The kind of thinking Biden espoused in the above runs contrary to Obama's very effective painting of Romney as an elitist.

REACTIONARY BIDEN STOPPING THE REVOLUTION

I'm not arguing for revolution. I'm saying that the sort of stance he's taking above will leave him in a weaker than ideal position to enact reforms that will inevitably be resisted. Reformists should seek to give maximal interest to their opponents in getting the reforms they want passed, and the potential for hostility can be one of these.

[TiltsAreUnderrated]

I am cautiously pessimistic about this. I understand there's a reason to keep some of the tax cuts (e.g. for lower earners and for stimulus reasons assuming a recession is ongoing or a constant risk), but rolling back only half of the corporate tax cut (35% -> 21% -> 28%) suggests the deepeneing of wealth inequality is going to be allowed to continue in the main.

There’s something deeply ironic about a British leftist lecturing America for a proposed “low” 28% corporate tax rate.

Of course ours is too low, but the USA can afford to have a much higher one than the rest of the world without lowering its tax take because it takes revenue even if a company is registered abroad. This isn't true for the UK and the lower the US rate goes, the lower the rest of the world has to without significant reforms like destination-based taxation.