Kuttner on TAP: Warren Delivers Again

Elizabeth Warren has proven once again why she is the indispensable Democrat. And she has proven once again why ideas matter and how to lead from the left.

Her presidential campaign generated such a large shelf of ideas on social policy and progressive taxation that it became a punch line (“I have a plan for that”). Unlike in 2008, when progressives had no developed plans to combat Tim Geithner’s imperative of protecting the banks at all costs, they are equipped with alternatives when Democrats go searching for answers. One such opportunity came this week.

Warren has spent months refining her idea for a corporate minimum tax. The concept is as elegant as it is simple: Corporations with a billion dollars or more in annual profits must report to the IRS what they report to shareholders, and pay at least 15 percent on their actual profits.

The bill was waiting for the right moment to rendezvous with a political need. That moment has just arrived, and it will help seal the Democrats’ budget deal. Warren’s office estimates that it will raise several hundred billion dollars over ten years.

Warren’s bill, initially co-sponsored by Sen. Angus King of Maine, now has Finance Committee Chair Ron Wyden as a co-sponsor. In order to gain wider support, Warren agreed to allow some socially defensible tax credits, such as R&D, clean-energy, and housing tax credits, as well as legitimate tax-planning devices such as carry-forwards of real losses.

Warren has also again demonstrated her remarkable gift for playing well with others and fashioning improbable coalitions. Kyrsten Sinema has opposed Biden’s plan to raise corporate rates across the board, but she now supports Warren’s well-targeted 15 percent minimum. It looks like Joe Manchin will come along, too.

So besides being smart policy, Warren’s leadership also has the virtue of bringing Sinema and Manchin back inside the tent, and restoring a semblance of Democratic unity—around a tax proposal that in many ways is more progressive than where Biden began.

The release announcing the bill singles out Amazon, with a reported $45 billion in profits last year as families struggled through the pandemic, but just 4.3 percent in taxes, far below the statutory corporate rate of 21 percent. Indeed, Warren reports, 55 large profitable corporations with profits totaling $40 billion assembled so many tax gimmicks that they got money back from the government.

Warren’s bill fits hand in glove with the Democrats’ other proposal, to tax the annual gains in asset value for the richest 700 or so Americans. That may be a slightly harder sell because of technical questions.

The move to target the very top—the billionaires and mega-corporations that get off with lower tax rates than minimum-wage workers—is also shrewd class politics and partisan politics. Let Republicans explain why they oppose it.

It’s about time that the spotlight moved off the divisions among Democrats and onto the Republicans, who block all the popular parts of Biden’s investment program and defend predation by billionaires.