The Washington Post - USA (2021-10-26)

A20 EZ M2 THE WASHINGTON POST.TUESDAY, OCTOBER 26 , 2021

BY ANNIE LINSKEY

In rally after rally, from Seattle
to Denver to Detroit, Sen. Eliza-
beth Warren had only to r aise two
fingers over her head and thou-
sands of supporters would chant:
“Two cents! Two cents! Two
cents!” — shorthand for Warren’s
idea that America’s richest fami-
lies should pay an annual “wealth
tax” of two cents on the dollar.
When Warren (D-Mass.)
dropped out of the presidential
campaign in March 2020 amid
criticism that her agenda was too
far left for the country, the idea
appeared destined for the dust-
bin of history.
Nevertheless, it persisted.
It’s not exactly what Warren
offered on the campaign trail, but
as negotiations over President
Biden’s legislative agenda have
led to a potential revenue short-
fall, Democratic leaders are tak-
ing another look at a w ealth tax.
They are weighing a levy targeted
at the country’s billionaires — a
concept similar to the one popu-
larized by candidate Warren.
Her allies are relishing the mo-
ment and finding some degree of
irony in the notion that the idea
resembling the centerpiece of her
platform might help seal the leg-
islative legacy of her onetime
rival Joe Biden.
“Biden’s agenda was about to
fall apart, but Warren had a plan
for that,” quipped Adam Jentle-
son, a former top congressional
aide who supported Warren’s
campaign, playing on one of her
campaign slogans. “People are
gravitating toward this idea be-
cause it is extremely good.”
Jentleson, who worked for
then-Senate Majority Leader
Harry M. Reid (D-Nev.), said it
was unusual for such a major idea
to arise in the final stages of a
negotiation. “I can’t remember an
idea this big, and that is this much
of a flash point, sliding in under
the wire at this late stage of a
negotiation,” he said.
It is not certain the idea will
survive the next few days — or
even hours — in the rush to
hammer out the final outlines of a
deal. But even if it falls by the
wayside, Democratic leaders’ in-
terest reflects a willingness in the
party to take on the wealthy that
is an echo of Warren’s message.
And some powerful Democrats
see a tax on the country’s richest
as a way out of their negotiating
stalemate.
“We probably will have a
wealth tax,” House Speaker Nan-
cy Pelosi (D-Calif.) said Sunday on
CNN’s “State of the Union.” The

Senate Finance Committee is pre- paring to release a plan early this week that could include the idea. Warren, who at one point was considered the front-runner for the 2020 Democratic nomina- tion, has kept a relatively low profile since dropping out of the race and returning to the Senate. Though many of her staffers have found key positions in the Biden administration, her influence on his policy agenda has been less evident. The senator has had difficulty, for example, convincing the president to forgive $50,000 per person in student loans. And though she published a book this year, she has largely stayed out of the news, pushing her agenda behind closed doors. In contrast, Sen. Bernie Sand- ers (I-Vt.) — who left the campaign trail shortly after Warren — has played a high-profile role during the Biden presidency, largely due to his perch as chair- man of the Senate Budget Com- mittee. But Warren’s notion of a wealth

tax was abruptly revived when Sen. Kyrsten Sinema (D-Ariz), a centrist, objected to raising corporate income tax rates to help pay for Biden’s expanded safety net, leaving Democrats with a revenue shortfall. A wealth tax seemed to fit the bill. Warren’s allies note that she is well-versed in pulling levers behind the scenes, and said they were not surprised that she had continued to embrace the wealth tax even after running on it and losing. Warren declined to be inter- viewed for this article. An aide to the senator, who spoke on the condition of anonymity because they were not authorized to speak publicly, em- phasized that the final shape of the plans is still unclear. But Warren spoke with Sinema in recent days about tax policy, a Warren spokeswoman said. The specific idea now under consideration is being termed a “Billionaire’s Income Tax.” Devel- oped by Sen. Ron Wyden (D-Ore.), who chairs the Senate Finance

Committee, it would tax financial gains on all tradable assets annu- ally, even if they have not been sold. Experts believe the tax would net anywhere from $250 billion to $500 billion the first year, when it would have its biggest impact. “In a package that’s supposed to be about giving everybody a shot to get ahead, it would be a big mistake, from both a policy and political perspective, not to ask billionaires to pay a fair share,” Wyden said in a statement. “The Billionaire’s Income Tax is about fairness and showing the Ameri- can people taxes aren’t manda- tory for them and optional for the wealthiest people in the country.” While there are differences be- tween this Billionaire’s Income Tax and the version that Warren ran on, both are rooted in the concept that the federal govern- ment should tax wealth and not just income, said Gabriel Zuc- man, an economics professor at the University of California at Berkeley, who along with his col-

league Emmanuel Saez, helped Warren write her wealth tax proposal during the campaign. “Right now the tax system is income-based, so you pay de- pending on your income,” Zuc- man said. “In both the Warren wealth tax and this billionaire tax, what matters is not your income — what matters is your wealth.” Both plans also depend on the idea that wealth is an indicator of a person’s ability to pay taxes, Zucman said. “Some people have a lot of income and relatively little wealth,” he said. “Others have a lot of wealth and relatively little in taxable income. And so that’s why it can make sense to have both an income tax and a wealth tax.” The current version is also targeted much more tightly than Warren’s proposal and would only affect about 700 Americans — or the wealthiest 0.0002 percent of the country. Warren’s wealth tax was designed to tax all fortunes over $50 million, and would have affected about 100,000 Americans.

Zucman said he was struck by the drama of the plan quickly falling out of favor when Warren dropped out, only to come back into vogue again. “In some sense, it’s super sur- prising and it’s an incredible twist,” Zucman said. “But when you look at the history of taxation in the U.S., you sometimes see some kind of dramatic U-turn or evolutions.” The coronavirus pandemic has exacerbated inequities, econo- mi sts sa y, with the rich emerging with more wealth while many of those with lower incomes either lost their jobs or faced daunting medical bills. And inequity has become more of a focus of much of the Democratic Party’s base. Still, the idea of a billionaire or wealth tax was not part of the initial package of revenue ideas when Biden and his allies first introduced the Build Back Better agenda. Rather, Democrats planned to raised the corporate income tax, which had been cut sharply to 21 percent under Presi- dent Donald Trump. But Sinema objected. A Senate Democratic aide, who spoke on the condition of anonymity because they were not authorized to speak publicly, said that so far no Democrat has objected to the idea of using the billionaire’s tax to fill the gap. On Friday, a s pokesman for Sinema, John LaBombard, did not con- firm or deny her support for the billionaire tax. The potential adoption of the idea is a clear twist in Democratic politics, given that Warren’s proposal was panned by her more ideologically moderate rivals during the party’s presidential pri- mary contest. During a presidential debate held almost exactly two years ago, Warren’s wealth tax was picked apart by her competitors, at a time where her political fortunes appeared to be on the rise and she was driving the conversation within the party. Former congressman Beto O’Rourke (D-Tex.) accused War- ren of being “punitive” to the very rich. Tech entrepreneur Andrew Yang said Warren’s idea has failed in other countries. And Biden suggested that War- ren would never be able to push her idea over the finish line. “We all have good ideas,” Biden said. “The question is, who is going to be able to get it done?” [email protected]

Tory Newm yer and Jeff Stein contributed to this report.

Democrats resurrect Warren’s wealth tax at a critical moment for Biden

JABIN BOTSFORD/THE WASHINGTON POST Sens. Elizabeth Warren (D-Mass.), left, and Ron Wyden (D-Ore.) speak to reporters on July 21. Warren’s wealth tax ide a, a key fixture of her presidential campaign, has been adapted into Wyden’s “Billionaire’s Income Tax” as Democrats face a p otential revenue shortfall.

BY SEAN SULLIVAN AND MARIANNA SOTOMAYOR

Democrats are scrambling in-
tensely behind-the-scenes to ad-
dress immigration in the frame-
work they are crafting to expand
the nation’s social safety net, ac-
cording to people with knowl-
edge of the situation, even as
President Biden and other party
leaders have said little publicly
about their strategy in recent
weeks.
The most pressing question
confronting Democrats is what to
do about millions of undocu-
mented immigrants seeking a
path to legalization. One option
under discussion is a plan to
provid e protected status that
stops short of a path to citizen-
ship. Another is to include a
proposal that would enable im-
migrants who arrived in the Unit-
ed States before 2010 to apply for
a green card.
The talks, which were de-
scribed by the people with knowl-
edge of the situation, some of
whom spoke on the condition of
anonymity because they were not
authorized to disclose sensitive
discussions, are said to remain
fluid, with no final resolution yet
reached.
But the emerging ideas shed
light on what has been one of the
most divisive issues of Biden’s
presidency — and a topic on
which Americans have given him
low marks. It has also been a
subject he has spoken about spar-
ingly in public settings in the
context of the negotiations.
In contrast, Biden and top
Democrats have more openly dis-
cussed other changes they are
making to slim down their
$3.5 trillion package, such as how
paid family leave and expanding
health-care benefits for seniors
are likely to be addressed.
While the president sent a
proposal to Capitol Hill at the

start of his tenure to open a path to citizenship for undocumented immigrants, and has voiced support for using the social spending bill to achieve that, he has yet to explain a clear path for achieving that objective, anger- ing many activists who have already started accusing him of falling short of his campaign promises. On Monday, Senate Majority Whip Richard J. Durbin (D-Ill.) said Democrats had made some progress on a proposal to give undocumented immigrants a protected status that would enable them to work legally, pay taxes and live without fear of deportation. He said the Congres- sional Budget Office gave the plan a preliminary score. An alternate idea that House Speaker Nancy Pelosi (D-Calif.) and her advisers have told Demo- cratic members and aides in recent days to keep pursuing, according to people with knowl- edge of the situation, is the one that would enable immigrants who arrived in the United States before 2010 to apply for a green card. Pelosi’s office declined to comment on Monday on internal deliberations. The provision, a fallback known as the “Registry” proposal, would apply to those with provi- sional immigration status, as well as undocumented immigrants, giving them a track to legalization that activists have demanded for years. Current law allows an undocumented immigrant who entered the United States before Jan. 1, 1972, to apply for legal status. The new strategy would update the date to clear the way for millions of longtime undocumented immigrants to gain permanent residency. But the plan faces a major roadblock: The Senate parlia- me ntarian told Democrats that

changing the registry date cannot be included under the budgetary maneuver known as reconciliation, according to a document obtained by The Washington Post on Sept. 29. Democrats are using reconciliation to bypass Republi- can opposition and pass their bill with a simple majority. The decision marked the sec- ond time that Senate Parliamen- tarian Elizabeth MacDonough had rejected Democrats’ efforts to include permanent legal residency in the bill, judging that its impact would extend well beyond its budgetary implications. Law- ful permanent residency, also known as a green card, is the precursor to U.S. citizenship.

There is division among Demo- crats on whether the parliamentarian’s word is final, with some pushing to override her rule. The White House has not publicly pushed for such a maneuver. “ In order to overrule a parliamentarian, it is not just waving a magic wand,” said White House press secretary Jen Psaki on Oct.

“It requires a majority of votes
in the Senate, and it requires the
vice president. So, I would say
that’s a legislative process. I
would point to Leader Schumer
and others to ask the question of
whether there is the opportunity
or the appetite to do that.”
White House officials said
Monday the president continues

to support a path to citizenship in the reconciliation bill but is defer- ring to Congress about how to best accomplish that. The White House declined to comment on specific strategies. Even if it might prove futile, the effort to insert an i mmigra- tion provision could appease de- mands made by Reps. Jesús “Chuy” García (D-Ill.), Adriano Espaillat (D-N.Y.) and Lou Correa (D-Calif.), who have publicly said they would vote against the reconciliation bill if immigration was not addressed. Biden, Pelosi and Senate Ma- jority Leader Charles E. Schumer (D-N.Y.) have been leading efforts to try to slim down a $3.5 trillion

special spending bill that has stalled over opposition from cen- trists in the party. Sen. Joe Manchin III (D-W.Va.), a key holdout, said Monday that he thinks Democrats can finalize the broad contours of the spending package this week. “As far as conceptually, we should,” Manchin said. A deal on the reconciliation plan would also unlock a com- panion proposal to invest in the nation’s roads. bridges and other public works. That plan has already passed the Senate with bi- partisan support, but liberals in the House, backed by Biden, have refused to let it move forward absent an agreement on the social safety net plan. Other House Democrats have also called for overriding the parliamentarian’s ruling against pro- posed pathways to citizenship, noting that her decision should be considered more like a recom- mendation than the final say. “If immigration were excluded from the Build Back Better bill, it would be devastating. It would cause a tremendous, tremendous uproar in the immigrant commu- nity,” García said in an interview last week. “This is a great moment for us to think about putting aside the ruling of the parliamentarian, demonstrating the type of bold- ness and courage that is required in the moment.” Democrats are exploring other ways to address immigration in the reconciliation bill, allotting roughly $100 billion to the matter in their blueprint. These include a program to “recapture” unused green cards to help clear the backlog of people waiting for them and change the fee struc- tures for them. [email protected] [email protected]

Maria Sacchetti contributed to this report.

Democrats scramble to include immigration provision in social spending bill

JABIN BOTSFORD/THE WASHINGTON POST House Speaker Nancy Pelosi (D-Calif.) and her advisers have encouraged Democrats to pursue a provision that would enable immigrants who arrived in the U.S. before 2010 to apply for a g reen card.

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The Washington Post - USA (2021-10-26)

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