Michael Bloomberg released a tax plan Saturday that aims to raise $5 trillion from high-income households and corporations over 10 years to pay for new spending on education, infrastructure and climate change.
- The top income tax rate for individuals would return to 39.6%, up from the 37% imposed by the 2017 Republican tax cuts.
- Incomes over $5 million would face a 5% surtax, raising the top rate to 44.6%. The Bloomberg campaign says this would affect less than 0.1% of taxpayers.
- High-income earners would pay capital gains taxes at the higher rates imposed on ordinary income.
- The stepped-up basis for inheritances would be eliminated, with capital gains taxed at death.
- The 20% pass-through deduction would be eliminated, as would the carried-interest loophole.
- The corporate tax rate would increase to 28%, up from the 21% imposed in 2017.
- The IRS would receive increased funding to focus on unpaid taxes.
As The New York Times’ Jim Tankersley and Alexander Burns note, Bloomberg’s plan “would almost certainly raise his personal tax bill.” In a statement, Bloomberg addressed that point, saying, “I will also pay more in taxes to make sure all Americans have the same opportunities I did. That’s only right.”
At the same time, the proposal avoids the wealth taxes that have been proposed by some Democratic candidates. Bloomberg, worth an estimated $60 billion, reportedly believes that a wealth tax would be unconstitutional.
Bloomberg’s campaign said that while he sees the current $1 trillion annual deficit as a problem, he doesn’t think it’s urgent and wants to use the proposed tax revenues to pay for new programs. “Those investments require new revenue - and a fairer, more progressive tax system that asks wealthy Americans like me to pay more,” Bloomberg said.
The bottom line: The tax proposal shows how far the tax debate has moved in the Democratic party. “Bloomberg’s proposals are the latest sign that progressives are winning the debate over taxes, inequality and the economy,” former Beto O’Rourke adviser Brendan Duke told The Wall Street Journal.