The architect of the "billionaires' income tax" makes his case
I just spoke with Senator Ron Wyden about his historic proposal and whether he's confident that Manchinema will sign on
I just got off the phone with Senator Ron Wyden, Democrat of Oregon, who has landed in an unexpected place. A long-simmering idea of his, to tax billionaires’ growing fortunes, has suddenly come into the mainstream. With Democrats rushing to finalize their social policy and climate package, a once-improbable proposal is at the center of discussion and may pass. Even the Manchinema Naysayers are open.
I called Senator Wyden to find out the state of things. Is a billionaire tax upon us?
ANAND: Is the wealth tax on? Is this in the final package? Is this thing happening?
SENATOR WYDEN: We're pulling out all the stops. Tonight we're going to start talking about it in more detail. I have been unable to see even one senator getting up and actually saying, “Gee, I think it's OK that billionaires are not paying any taxes for years on end.”
What the opponents are trying to do, because they aren't willing to get up and actually act like they're sympathetic to billionaires, they're running the old FUD strategy — fear, uncertainty and doubt. If you can just throw enough FUD at it, then senators say, “Oh, gee, I really don’t know.”
ANAND: I’m hearing from a lot of people that Senators Joe Manchin and Kyrsten Sinema, who have resisted even modest tax increases on corporations and rich people, that they're with you on this. I'm curious: How did they get behind an unprecedented and historic wealth tax instead of relatively more modest ideas?
SENATOR WYDEN: Well, first of all, we're calling this the “billionaires’ income tax,” so that people know that billionaires should pay taxes every year, just the way nurses and firefighters are.
All of the members are still making up their minds and saying we want to know more information about this and that, but around here, everything is always impossible until 15 minutes before it comes together — and particularly when you’re taking on such enormous, concentrated power. Billionaires know lots and lots of United States senators.
ANAND: Just to pin you down, am I hearing wrong that Manchin and Sinema are open to this proposal in a way that they were not open to other things?
SENATOR WYDEN: They definitely have indicated that they're open to this, but I don't put words and attribute it to senators. But both of them have indicated that they're open to this. And now what we're trying to do is get out the information that responds to questions.
This is about choices. Are you gonna say that billionaires ought to pay their fair share in taxes? Or are we going to continue a system that allows one set of rules for nurses and firefighters and another set for billionaires?
ANAND: Joe Biden ran against folks — Elizabeth Warren, Bernie Sanders — who shared your philosophy on this. And he very clearly in the campaign did not favor this kind of approach, but it sounds like he's perhaps with you now.
SENATOR WYDEN: He has publicly endorsed it. And I think part of this is this is not a wealth tax. This is a billionaires’ income tax. They would pay it every year on the growth of their assets — liquid assets, stocks, and the like, so that we could say, in this country, nurses and firefighters have to pay taxes every year and so do the most powerful and wealthiest people in the land.
ANAND: A couple of objections one hears that I want you to respond to. Why are you confident that this is constitutional when some folks say it’s a direct tax?
SENATOR WYDEN: Lily Batchelder is one of the real legal scholars in this country who actually has done some analysis of this. There have been several cases that tested it, and those challenges were rejected, but fundamentally it's already in the tax code, and it's been in the tax code for quite some time.
ANAND: How do you deal with the objection that rich people, with all their accountants, will find ways to avoid this? That they'll transfer their money into non-taxable stuff that doesn't fall under this law?
SENATOR WYDEN: First thing, they're avoiding all taxes now. Let’s start with that. But we have put in a number of anti-abuse provisions. We had our version of a red team of people who were very knowledgeable in the field. And we feel that we've closed off a lot of loopholes, and we're not underestimating the ability of these powerful people to hire even more talent.
But they're not paying now. They're getting out of paying now.
We’ve put down a marker that working people don’t feel any longer that they’re being played in terms of the American economy. They’ve already said again and again that they feel the system is rigged for those who have power and influence. Nothing shows this more than this particular flagrant economic inequity. It is as clear an example of income inequality as I can find. That if you’re a nurse or a firefighter making five figures, you're paying taxes with every single paycheck. If you're a billionaire who made enormous sums during the pandemic, you can get out of paying anything.
ANAND: People have floated this notion of, Why don't we just automatically audit every single one of these people to help enforcement instead of audits being a random thing, the way they are now?
SENATOR WYDEN: I’m definitely for people beefing up the audits, but you’ve got to have something to audit. And the fact is these tax rules are so broken. If you're a wealthy tax cheat and you're part of one of these large, multi-billion-dollar partnerships, your chance to get an auditor about is likely to get hit by a meteor. And we're taking that on, too.
ANAND: Last thing: Elon Musk fired back at your plan, saying, first they're coming for him, then they're going to come for the middle class. What would you say to Elon Musk and anyone like him specifically about what your intentions are?
SENATOR WYDEN: We want everybody to pay a fair share. What we're doing here is about billionaires who have paid little or nothing for years on end. And that's all the bill is about. That's why it's called the “billionaires income tax,” because that's what it's about.
Ron Wyden is a Democratic senator from Oregon. This interview was edited and condensed for clarity.