Democrats can’t be the party of both the working and the millionaire classes
In this Nov. 3, 2021, file photo, a copy of HR 5376, the Build Back Better Act, is seen at the Capitol in Washington. Credit: J. Scott Applewhite / AP
by Jared Golden, who represents Maine’s 2nd Congressional District in the U.S. House of Representatives.
For years, Democrats have made promises to American voters: Elect us, and we will lower the cost of prescription drugs. Elect us, and we will expand access to affordable health care. Elect us, and we will strengthen labor laws to protect the rights of workers. Elect us, and we will deliver important, common-sense reform to make life better for people in the working middle class.
Last week, we found out that Democratic party leaders also have been making other promises, this time to the donor class: A $275 billion tax break for millionaires and the very wealthy over five years. This giveaway is engineered by lifting the cap on the state and local tax deduction.
The facts of this proposal aren’t subject to serious dispute. Just 1.2 percent of the tax cuts would go to the lowest 60 percent of earners: those making less than $96,000 a year. Their average tax cut: less than $7 a year. Meanwhile, millionaire households would receive tax cuts averaging $15,590 a year.
That much money going to rich people adds up quickly. In fact, it’s the largest single provision within the Build Back Better Act right now. State and local tax deduction proponents are sticking to a misleading claim that their proposal would be “paid for” by extending the cap beyond its current expiration date of 2025. This offset looks good on paper, but it is largely a shell game that masks the true cost of this scheme, an increase in the debt of more than half a trillion dollars over the next decade.
To add insult to injury, this provision applies retroactively, allowing wealthy people to rake in windfalls from the past year, while the programs in the Build Back Better Act that would help working middle class people — like capping out-of-pocket prescription drug costs for seniors — are delayed or expire after just a few years.
This should be an outrage to working middle class Americans. I know it enrages me. Fighting for the working middle class shouldn’t first require a payoff to the millionaire class. Cleaning up the environment shouldn’t start with a political bribe to the millionaire CEOs who get rich polluting it. We should be able to put money in the pockets of working families without stuffing cash in the pockets of millionaire campaign donors. I reject this tradeoff — it’s a sham and it’s just one more sad example of the corrosive force of money in politics.
There’s a lot to like in the Build Back Better Act. Think what could be done with these hundreds of billions of dollars if we decided not to shower it on the rich. The child tax credit expansion only runs for a single year under this bill. Let’s put the money toward a longer expansion. The bill isn’t fully paid for, as the president promised it would be. Let’s change that and commit to a bill that reduces the nation’s annual budget deficits. There are a thousand better ways to invest this money than to shell it out to millionaires.
The fact that this tax break has slipped through the seams into this legislation is proof of the corrupting influence of money in politics. The top beneficiaries of this provision are big contributors to political campaigns in states like New York and California. I’m not afraid to call this pay-to-play scheme out, and I voted against it. Unfortunately, last week, I was on my own.
The good news is that it’s not too late to fix this terrible deal. The state and local tax giveaway was never part of the president’s agenda — his agenda has been hijacked. The bill is now headed to the Senate, where it needs the support of every member of the Democratic caucus to pass. Fortunately, several senators have spoken out in strong opposition to this giveaway.
I support negotiations to limit state and local tax cap relief to middle class households, and will be talking with these senators and the White House to try to fix this extremely misguided policy. The child tax credit proposal already in the bill — which allows households making up to $150,000 a year to claim the full enhanced credit before phasing it out — could provide a good blueprint for how to better target the deduction. We could use that same criteria to ensure that only working middle class families are getting tax relief through the state and local tax deduction.
Democrats have to make a decision: are we the party of the working class or the party of the millionaire class? We can’t be both.