With Tax March, Democrats become party of revolt amid rising inequality
WASHINGTON — A day of major national protest on April 15 may portend a shift in the politics of U.S. taxes, as Democrats become the party of revolt.
With 120 marches in cities from San Francisco to Washington and Birmingham, the Democratic Party and progressives are attempting to reroute the grassroots energy that helped derail President Trump’s bid to overhaul the Affordable Care Act toward their next goal: forcing a release of his tax returns and drawing the battle lines for the upcoming debate over U.S. tax reform.
More broadly, the coalition of almost 70 progressive groups is trying to take ownership of an issue — taxes — which Republicans have championed for the past 25 years, culminating in the formation of the conservative Tea Party about eight years ago.
"It’s time to play offense on the tax issue," said Sen. Ron Wyden, D-OR, the top Democrat on the Senate Finance Committee. "The tax system in America is a broken dysfunctional mess. If you’re a cop or a nurse, it’s compulsory. It comes right out of your check," he said. "If you’re one of the fortunate few, you can do the Cayman Islands thing and decide what you’re going to pay and how you’re going to pay it," and often, pay not much at all, Wyden said in an interview previewing his remarks at the Saturday march.
The march is another burst of the activism that’s been a regular occurrence since Trump’s election. A day after his inauguration, millions took to the streets of major cities in the United States and abroad. Trump is the first U.S. president in modern history not to release his returns – every president since Richard Nixon has done so. Recent polling shows 74% of Americans want to see his tax returns.
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“It’s about a lot more than just seeing somebody’s 1040s. It’s about whether or not the president of the United States is acting in the interest of the American people or whether he’s lining his own pockets or serving another master,” said Ezra Levin, executive director of Indivisible, among the major protest groups that's formed in the past few months.
“Congress has the power to find out and they’ve used it before," including on Nixon, said Levin, whose group is among the organizers.
Saturday is also the eighth anniversary of hundreds of Tax Day protests that marked the emergence of the Republican-aligned Tea Party. Although the Tea Party gathered steam around opposition to Obamacare, its roots are in a backlash to former President Barack Obama's $787 billion stimulus program.
“If you look over the long sweep of history there’ve been movements in both directions,” said George Yin, a former chief of staff on U.S. Joint Committee on Taxation in Congress. He cited the Boston Tea Party and the Whisky Rebellion of the 1790s as backlashes to over taxation. Now, the energy on taxes appears to be shifting to the progressive end of the spectrum, said Yin. “Inequality has clearly grown, and it is approaching the levels of inequality that we saw during the Gilded Age,” said Yin, who now teaches law and taxation at the University of Virginia. “You would think, at some point, there would be a turnaround on that issue," said Yin.
Today, the top 1% of Americans earn an average of $1.3 million a year, more than three times as much as the 1980s, according to the National Bureau of Economic Research. Meantime, the bottom 50% earned an average of $16,000 in pre-tax income, the same as in 1980.
Trump has said he wants to provide "massive" middle-class tax relief. Yet, according to the nonpartisan Tax Policy Center, about half of the $6.2 trillion in tax cuts Trump outlined during his campaign would go to the richest 1%, or nearly $3 trillion over 10 years. The middle class, however — defined as taxpayers in the wealthiest 20% to 80% — would receive only 20% combined.
Trump's failure to disclose his taxes will throw a wrench in the president's efforts to pass tax reform, said Wyden. "When the president doesn’t disclose his taxes, is he using the tax code for his interests?" said Wyden. "It is going to make it substantially harder to do bipartisan tax reform for just that reason," he said.
Concern over inequality
Recent polling suggests progressives have a lot to gain in pushing the tax issue over more traditional Democratic social issues such as immigration, guns or abortion. About 90% of voters agree there are already too many special tax loopholes for the wealthiest Americans, according to an early April poll conducted by the Global Strategy Group. Three out of every four voters, including half of Republicans, say millionaires and billionaires pay less than their fair share of taxes.
Indeed, in the 2016 election, it was resentment over growing income inequality and working class voters — particularly those who feel left behind in the modern economy — that drove populist uprisings on both the Republican side, with Trump, and among Democrats, with the candidacy of Sen. Bernie Sanders of Vermont.
The coalition marching on Saturday includes traditional Democratic grassroots groups, including labor unions, as well as newer groups such as the Working Families Party and SiX Action, which is working to push state-level legislation to increase the minimum wage and enact paid family leave policies.
Yet, according to Yin, there is one major condition missing that's marked major shifts in U.S. tax policy: a major war. It was, for instance, the Civil War that led to the implementation of the U.S. income tax system. Taxes also increased around World Wars I and II. “One of the reasons we have the inequality problem that we have is over the last 60 to 70 years is we have not been engaged in a major war,” he observed, clarifying he is not advocating for war but that wars have helped convince the public to support major taxation changes.
Tax Returns
During the campaign, Trump frequently said he was not releasing his returns because they were under audit. Yet he also declined to release prior returns that were not under audit. The Internal Revenue Service has never confirmed whether they are indeed under audit and when it might conclude.
Read more:
Will Trump's presidency impact his IRS audit?
Trump’s tax returns will be immediately under audit
Survey: Americans want tax reform that raises revenue
Days after his inauguration, Kellyanne Conway, a top adviser, said he wasn’t going to release his returns because the American people “don’t care.” According to a January ABC News/Washington Post poll, 74% of respondents say he should release his returns, including 53% of Republicans.
More than a dozen Republican members of Congress have said Trump should make his returns available to the public, including Senate Majority Leader Mitch McConnell of Kentucky and House Speaker Paul Ryan of Wisconsin, yet they’ve avoided legislative efforts by Democrats to force Trump to disclose them.
Levin, the Indivisible organizer, said the battle over Obamacare, which featured angry town halls and regular protests outside the offices of lawmakers, has proven that grassroots advocacy can succeed.
"It was a direct result of this kind of action. If we can assert constituent power we can get Donald Trump’s tax returns," he said.
