If you tuned in during the first night of the Democratic debates to hear what the candidates had to offer on tax policy, you were likely disappointed. With ten candidates vying for time and answers limited to 60 seconds, the debate was more like a series of mini-speeches on a variety of topics from immigration to abortion. And when it was time to talk tax, answers were mostly short on details.
The candidates who were onstage during the first round of debates were Sen. Cory Booker (D-NY), New York City Mayor Bill de Blasio, Julián Castro, John Delaney, Rep. Tulsi Gabbard (D-HI), Washington Governor Jay Inslee, Sen. Amy Klobuchar (D-MN), Beto O’Rourke, Rep. Tim Ryan (D-OH) and Sen. Elizabeth Warren (D-MA). Despite the number of candidates, the word tax was used just 18 times throughout the evening: more than 20% of the time, it was used by a moderator.
NBC’s Savannah Guthrie started things off by querying Sen. Warren:
You have many plans — free college, free child care, government health care, cancellation of student debt, new taxes, new regulations, the breakup of major corporations. But this comes at a time when 71 percent of Americans say the economy is doing well, including 60 percent of Democrats. What do you say to those who worry this kind of significant change could be risky to the economy?
Warren’s answer focused on the economy but did not address the issue of taxes directly.
Guthrie tried another tack when she moved to O’Rourke, asking him squarely:
“…some Democrats want a marginal individual tax rate of 70 percent on the very highest earners, those making more than $10 million a year. Would you support that? And if not, what would your top individual rate be?”
O’Rourke launched into an attack on the Tax Cuts and Jobs Act (TCJA), calling out a “$2 trillion tax cut that favored corporations while they were sitting on record piles of cash and the very wealthiest in this country at a time of historic wealth inequality.” He didn’t, however, answer the question, directly, prompting Guthrie to follow-up:
“I’ll give you 10 seconds to answer if you want to answer the direct question. Would you support a 70 percent individual marginal tax rate? Yes, no, or pass?”
O’Rourke responded, “I would support a tax rate and a tax code that is fair to everyone. Tax capital at the same rate…”
Guthrie interjected with “Seventy percent?”
O’Rourke did not answer that question but did suggest that corporate tax rates should be pushed up to 28%. Currently, under the TCJA, corporations have a flat 21% tax rate; rates for individuals are a bit higher (you can see the 2019 tax rates here.)
If you’re wondering where that number comes from, it’s tied to a proposal from Rep. Alexandria Ocasio-Cortez (D-NY). She suggested a 70% tax rate on incomes over $10 million. That’s not a flat 70% tax rate across the board; instead, it’s likely an additional marginal tax bracket. The marginal tax rate is your top tax rate, or the tax rate you’ll pay on the next dollar of taxable income (so in this case, high-income taxpayers would pay 70 cents in tax for every dollar they report in taxable income over $10 million, but their rate on the first $10,000 or so would remain the same as for you and me). That’s because the U.S. has a progressive income tax system. A progressive income tax is exactly what it sounds like: the rate of tax increases as income increases but everyone pays the same rate for the same income. You can read more about marginal rates here.
Sen. Corey Booker (D-NJ) also highlighted corporate taxes, singling out companies “like Halliburton or Amazon that pay nothing in taxes and our need to change that.” Amazon did, in fact, pay no federal corporate income taxes for the past two years. The reasons are complicated but generally come down to low tax rates combined with tax credits, like those for research and development. You can read more from Forbes contributor Stephanie Denning here.
Sen. Tulsi Gabbard (D-HI) linked her tax talk to national security and the military. She chided previous leaders for “taking us from one regime change war to the next, leading us into a new cold war and arms race, costing us trillions of our hard-earned taxpayer dollars and countless lives.” She emphasized that if she were president, she would “take your hard-earned taxpayer dollars and instead invest those dollars into serving your needs, things like health care, a green economy, good-paying jobs, protecting our environment, and so much more.”
New York Mayor Bill DiBlasio offered a nod towards taxes – and perhaps a jab at O’Rourke – in his statement on income inequality that “we’re supposed to be for a 70 percent tax rate on the wealthy.” He did not offer more information.
John Delaney offered the most detailed tax statement of the evening when he reminded viewers that he has called for a doubling of the earned income tax credit (EITC). The EITC is a refundable tax credit targeted to working people with low to moderate-income. For 2019, the maximum EITC amount available is $6,557 for married taxpayers filing jointly who have three or more qualifying children. You can read more about the EITC here.
Delaney also reminded voters that he introduced the only bipartisan carbon tax bill. Noting that “[y]ou just have to do it right,” he suggested that you could put a price on carbon and give a dividend back to the American people. With a carbon tax, you put a price on the emissions of carbon dioxide and other greenhouse gases; the idea is that making certain kinds of energy more expensive will encourage clean energy technologies. The bill that Delaney’s referring to purports to do just that: the Energy Innovation and Carbon Dividend Act, would impose a tax of $15 for each ton of carbon emitted into the air and the amount would increase by $10 every year afterward. The bill, which has bipartisan support, has been referred to the Subcommittee on Energy; you can read it here (downloads as a PDF).
Tim Ryan only briefly touched on corporate taxes, noting that his home state of Ohio recently lost 4,000 jobs at a General Motors facility even though the company got a tax cut (a reference to the TJCA).
For more on the candidates’ stances on tax, you can check out their websites:
- Sen. Cory Booker
- New York City Mayor Bill de Blasio
- Julián Castro
- John Delaney
- Rep. Tulsi Gabbard
- Washington Governor Jay Inslee
- Sen. Amy Klobuchar
- Beto O’Rourke
- Rep. Tim Ryan
- Sen. Elizabeth Warren
(For the record, no candidate from last evening has a tax-specific web page at this time. I’ve linked to the Issues page of the websites when such a page exists.)
And there’s one more debate to go in June. Ten more Democratic candidates will take the stage tonight. They are Marianne Williamson, John Hickenlooper, Andrew Yang, Pete Buttigieg, former Vice President Joe Biden, Bernie Sanders (D/I-VT), Sen. Kamala Harris (D-CA), Sen. Kirsten Gillibrand (D-NY), Sen. Michael Bennet (D-CO) and Rep. Eric Swalwell (D-CA).
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