Washington, D.C. — Government programs that benefit most Americans can only be sustained if most Americans are willing to pay for them. But for more than two decades, U.S. political leaders have kept taxes far below the level needed to pay for growing social spending on programs like Social Security and Medicare. America can afford to borrow when addressing temporary emergencies, but it cannot continue to sustain debts growing faster than our economy in perpetuity.
Today, the Progressive Policy Institute (PPI) released a new report titled “How The $400K Tax Pledge Undermines Policymaking,” which argues that President Biden and the Democratic Party should move beyond Biden’s 2020 pledge not to raise taxes on any household making under $400,000. Report author Ben Ritz, Director of PPI’s Center for Funding America’s Future, explains the need for pragmatic progressives to push Democrats to soften this tax pledge if they want to bolster public investment in a fiscally sustainable way.
The report argues that raising taxes only on households with incomes over $400,000 is insufficient to fund current promises, let alone the new initiatives Biden has proposed during his presidency or the wish list of expanded programs sought by progressives. While it made for a popular campaign promise, President Biden’s pledge undermines prudent democratic governance by severing the crucial link between citizens’ demands for more government spending and their willingness to pay for it. In addition, the report contends that the pledge prevents the adoption of common-sense tax simplification measures and efficient revenue-raisers that most other advanced economies use to fund their welfare states.
“The reality is that some form of higher tax revenue is necessary to finance the needs of our aging population — and asking only families that make $400K to bear an increased burden is neither fair nor practical,” said Ben Ritz. “Pragmatic progressives must start making the case to voters why progressive programs are worth paying for. That means advocating for not only progressive tax increases, but also for broadening the tax base and closing inefficient loopholes — even those that benefit the middle class. At the same time, progressives must propose to modernize rather than simply expand existing spending programs, because the public’s tolerance for taxation only goes so high.”
Read more about the report in Politico and download the report here.
PPI’s Center for Funding America’s Future works to promote a fiscally responsible public investment agenda that fosters robust and inclusive economic growth. It tackles issues of public finance in the United States and offers innovative proposals to strengthen public investments in the foundation of our economy, modernize health and retirement programs to reflect an aging society, and transform our tax code to reward work over wealth.
The Progressive Policy Institute (PPI) is a catalyst for policy innovation and political reform based in Washington, D.C. Its mission is to create radically pragmatic ideas for moving America beyond ideological and partisan deadlock. Learn more about PPI by visiting progressivepolicy.org. Find an expert at PPI and follow us on Twitter.
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Media Contact: Amelia Fox – afox@ppionline.org
