Bill de Blasio wants to “tax the hell” out of rich people.
During the Democratic debates on Wednesday evening, many of the candidates onstage plugged their campaign websites — or, in former Vice President Joe Biden’s case, made a bungled attempt to give out a text message number. But not de Blasio, who sent viewers to a different website, TaxTheHell.com, instead.
He even previewed it in his opening statement, saying, “When I’m president, we will even up the score and we will tax the hell out of the wealthy to make this a fairer country and to make sure it’s a country that puts working people first.”
The New York City mayor, who launched his campaign in May, launched a sweeping policy plan: taxes.
On Wednesday evening, the day of the debate, the de Blasio campaign laid out a series of tax proposals, including a wealth tax, an income tax, an inheritance tax, a corporate tax, a CEO pay ratio tax, a Wall Street tax, and more. Basically, his “Fair Share Tax plan” is a grab bag of progressive tax policy proposals all wrapped into one.
Kyle Pomerleau, chief economist at the Tax Foundation, said de Blasio’s approach here is reminiscent of another New Yorker in his presidential primary in 2016: Donald Trump. “He is grabbing ideas from everyone else and just making them … bigger,” Pomerleau said in an email. “It’s kind of like when Trump released his tax cut plan, which looked very much like [Jeb] Bush’s, but it was twice as large!”
Is all of this going to become law? No. Let’s be honest, Bill de Blasio also is not going to be president. But the proposal is a political statement — de Blasio, who has postured himself as an unabashed progressive throughout his political career, is coming for the wealthy. And he’s doing so as the mayor of one of the richest cities in the world.
De Blasio’s tax plan is basically everything but the kitchen sink
The mayor’s tax proposal seems to really try to hit everything and is broadly aimed at reducing inequality and establishing what many progressives would consider a fairer tax system.
De Blasio claims he would “address the staggering levels of income inequality through two gigantic reforms,” including taxing capital gains as ordinary income and raising the top marginal income tax rate significantly. He would add two new tax brackets at the very top, so that those with household income between $1 million and $2 million would be taxed at 50 percent and those with more than $2 million in income would be taxed at a 60 percent rate.
“For many New Yorkers, taking into account the high rates of state and local tax they endure, and the inability to deduct those taxes for federal purposes, the effective ‘all-in’ tax rate would be about 74 percent,” said Robert Willens, a New York tax analyst and former managing director at Lehman Brothers. That’s likely not-so-coincidentally in line with the rate Rep. Alexandria Ocasio-Cortez (D-NY) has floated.
Other proposals include:
- Restoring the corporate tax rate to 35 percent
- Taxing corporations for companies that pay their CEOs over 100 times more than their median employees
- Implementing an aggressive inheritance tax for those who inherit over $1 million
As mentioned, some of de Blasio’s other ideas seem to be extra-large versions of proposals already out there.
For example, de Blasio is proposing a 0.2 percent tax on Wall Street trades. That’s double the tax rate proposed by Sen. Brian Schatz (D-HI) in a financial transactions tax bill he laid out earlier this year.
Sen. Elizabeth Warren (D-MA) has proposed a wealth tax in which Americans with fortunes of more than $50 million would be taxed at a 2 percent rate and those with more than $1 billion would be taxed at 3 percent. Under de Blasio’s bill, the wealth tax would kick in at $10 billion and a 1 percent rate. A 2 percent tax rate would be applied to those worth $25 million to $100 million, and once someone hits $100 million, they would be taxed at 3 percent. De Blasio’s plan also directly cites Warren’s and says parts of it mirror hers.
De Blasio’s plan cites sources for his estimates on how much revenue each proposal would produce. And he really does seem to try to hit everything — he even proposes repealing the “pass-through” tax break, which under the Republican tax bill means that the income of pass-through entities — companies organized as sole proprietorships, partnerships, LLCs, or S corporations — is taxed at the lower 20 percent corporate rate instead of the individual income rate.
The progressive group Americans for Tax Fairness applauded de Blasio’s proposal and noted that some of the ideas he put forth reflect a report it put out in April. “Mayor de Blasio’s progressive tax-reform plan is a recognition not only that the Trump-GOP tax cuts for the wealthy are unfair and aren’t working, but also that raising taxes on the wealthy and big corporations is good for the economy,” said Frank Clemente, executive director of the Americans for Tax Fairness Action Fund, in a statement.
This is also kind of a shot at New York
It’s no secret that de Blasio, who is currently serving his second term as New York City mayor, isn’t particularly popular in the city — including and perhaps especially among wealthy white New Yorkers.
This tax proposal is yet another way for de Blasio to signal he doesn’t care to try to improve the relationship. New York City is the world’s financial capital with one of the highest concentrations of wealth anywhere.
“Those markets and those wealthy people would take a beating under de Blasio’s plan if it ever got anywhere,” said Steve Rosenthal, a senior fellow at the Urban-Brookings Tax Policy Center.
Barry Ritholtz, a commentator and chief investment officer at Ritholtz Wealth Management, said in an email that de Blasio is right about “runaway inequality” but questioned some of the mayor’s proposals. He said that if a wealth tax is implemented, “the wealthy will find ways to move everything but real estate off-shore,” and therefore the idea might be “self-defeating.” He said that a transactions tax could “hurt an industry under intense fee pressure already” and added that he somewhat favors a pass-through tax “to encourage small business.”
Ritholtz also noted that he’s not a fan of de Blasio in the first place. “I am biased, because as a New Yorker it looks like the city has gotten worse (or much worse) under his watch: Homeless everywhere, subways much worse, etc.,” he said. (It is worth noting that de Blasio is not responsible for the subways.)
To be sure, this proposal would also make a lot of New Yorkers happy — most of the population does not live on Fifth Avenue across from Central Park or spend the day on Wall Street. But de Blasio is clearly sending a message here: He’s running a national campaign.
“What he’s proposing would be disastrous for New York,” Willens said. “However, it seems pretty clear that with his national aspirations and his claim to being the most progressive candidate on the block, he is long past being an advocate for New York.”