Biden Considers New ‘Wall Street’ Tax To Match Warren, Bernie
September 28, 2019 | by James G. Dalton
With Elizabeth Warren surpassing him in a national poll for the first time, Joe Biden is finally acquiescing to the pressure from his party’s increasingly left-wing voters and exploring more ‘progressive’ tax policies, including a ‘wealth tax’ like the plans proposed by both Warren and Bernie Sanders, and a ‘financial transaction’ tax on Wall Street that would increase the costs of stock, bond and derivative trades, the Washington Post reports.
Currently alone among the three highest polling polling Democrats, Biden is finding that his more centrist policies aren’t stirring up much excitement among his voters.
Meanwhile, Sanders released a wealth-tax plan earlier this week that imposes such high rates on billionaires that it virtually guarantees that their wealth will eventually be siphoned off by the IRS. The Democratic Socialist has also released a plan to make college free by taxing stock, bond and derivative trades. Biden has endorsed similar plans in the past, and according to WaPo, a financial transaction tax might end up being a major part of his new tax policy.
Of course, as we’ve pointed out in the past, slapping a tax on stock and bond trades would not only hurt Wall Street trading desks, it would probably cause liquidity to dry up, ensuring that even the smallest drop in stocks would be magnified by the total collapse in liquidity, and result in a crash that wipes out trillions in value. We once joked that this seems less like a plan to make college free, and more like a plan to reset the system.
WaPo reports that a Biden aide confirmed that the campaign is working on a new tax policy proposal, but that he couldn’t say anything about what specific proposals are in the mix. Biden has said that he will soon introduce new tax policies designed to show how he will pay for expanding government.
Biden “has and will continue to put forward details regarding how he will finance his biggest plans, because the stakes are too high not to be straightforward with the American people about how much they will cost and who will pay for them,” said Andrew Bates, a campaign spokesman.
Toward the end of the Obama years, Biden had expressed interest in a financial transaction tax after advisors showed the Vice President how much money could be raised by taxing Wall Street. But Biden coming out in favor of such a plan would mark a major departure from the Democrats’ typical platform.
“To have a leading presidential candidate, who is considered a moderate, take a position so counter to Wall Street – that would be a big step, no question about it,” said Frank Clemente, executive director of Americans for Tax Fairness, a liberal group focused on tax equity. “The vast majority of revenue it generates is from the wealthiest Americans, who have the most amount of money to contribute.”
Biden’s tax proposals already call for corporate taxes to be raised from 21% to 28% (the Trump tax law cut it down from 35%) as well as increasing the rate paid by the richest taxpayers. And his agenda, from health care to climate change to criminal justice, has been criticized by conservatives as even further left than Hillary Clinton’s in 2016.
But if Biden does move his tax policies sharply to the left, how much longer will it be before he embraces “Medicare For All.”