Biden wants to raise taxes and tax the rich, it’s not easy!
It is the political event of re-entry in the United States. The Democrats, President Biden’s party, have just unveiled a sweeping tax reform to fund the president’s massive $ 3.5 trillion stimulus package. This is the big bet of Biden’s tenure. And it will be complicated.
While this project was unveiled in Washington, the place to be at the same time last night, was elsewhere. In New York. For the Met Gala. With a parade of stars: Billie Eilish, Rihanna, Timothy Chalamet, etc. Why am I telling you about this?
Because the muse of the left of the Democratic Party, Alexandria Ocasio-Cortez, whose talent for communication is no longer to be demonstrated, appeared at this gala with a spectacular dress. A very beautiful and long white dress, neckline in the back. And on this immaculate white, huge letters written in red a bit like a stencil:
This dress is cause for conversation. Because tax reform is the main subject of this parliamentary reopening across the Atlantic. Objective: to find 3,500 billion dollars, the amount of Joe Biden’s gigantic post-Covid recovery plan, a plan called “Build back better”. Build back better. It is a question of financing public housing, places in nursery and kindergarten, more paid holidays. And also to accelerate ecological conversion: more renewable energies, more electric batteries.
In short, no more public investment, Roosevelt’s New Deal-style. Here it looks like: heading to the left. Especially since most of the sum must therefore be financed by a tax increase, a word often taboos in the United States.
A 5-point increase in corporate taxation, and nearly 3 points in the taxation of very high incomes. Increase in the means of the administration to fight against tax evasion.
All this promises a big parliamentary battle, but not the one we think! There is of course the opposite of the Republicans. They are already denouncing «an unprecedented taxation of Americans, which will ruin them and destroy jobs». The point is that this tax reform goes back on most of the tax cuts granted under Donald Trump, especially to the richest.
But for Joe Biden, the concern is not there. The reform can pass without the Republicans. On one condition: that not a voice is missing from the Democratic ranks. Because the majority is hanging by a thread, precisely by a vote in the Senate. And this is where it gets complicated.
Democrats are divided over this tax package. Very divided.
The centrist wing believes that it goes too far. She found her flag bearer (our Washington correspondent Sebastien Pour was talking about it here last night): West Virginia Senator Joe Manchin. For him, it is necessary to reduce the package by half: rather 1.5 trillion dollars.
In contrast, there is the left-wing. She is embodied in the dress of Alexandria Ocasio Cortez. Or in the words, furious, of the former candidate for the primary, Bernie Sanders. He asks twice as much, not twice less: 6000 billion. And a much larger increase in corporate taxation, as Joe Biden had originally promised.
The text, in its current version, is, therefore, a compromise. A least common multiple, according to the formula of a representative in the House. But this compromise may explode in the days to come.
The moment of truth for Biden
And this is really important for Biden, it is even arguably the moment of truth of his tenure. Forget about foreign policy issues like the chaotic withdrawal from Afghanistan. A majority of Americans do not hold Biden responsible. It is therefore secondary.
Conversely, with this tax reform, we are talking about the heart of the reactor: the daily life of Americans, the central point of Biden’s program. That is what he will be judged on first. It plays into its economic credibility, its ability to keep the machine running while initiating far-reaching reforms on environmental issues.
He plays it so preserving the unity of a Democratic Party torn between currents differ ideologically, as if Emmanuel Macron and Jean-Luc Mélenchon were in the same party … unity of the Democrats s’ is cemented, for the most part, around opposition to Trump. But now? Consistency is not obvious. Cohesion even less.
And to further spice up the challenge, the calendar fire window is narrow. The agreement on this mega economic and fiscal package must be obtained within the next 20 days. This is the American parliamentary calendar. And more broadly, from next January, the United States will again enter the campaign, with a view to the “mid-term” election. This strange electoral periodicity grips the political machine of the country every other year.