Yahoo Finance’s Alexis Christoforous and Rep. Don Beyer (D-VA), Vice Chair of the Joint Economic Committee, discuss the new ultra-millionaire wealth tax proposal.

Video Transcript

ALEXIS CHRISTOFOROUS: Senate lawmakers will begin debate tomorrow on President Biden's $1.9 trillion stimulus package. But that price tag has been a sticking point for many Senate Republicans, even some moderate Democrats. And just today, the US Chamber of Commerce warned that the relief package does not do enough to target the people and industries that need it most. Joining me now is Congressman Don Beyer of Virginia. Congressman, good to see you again. What do you make of this--

DON BEYER: Thanks, Alexis.

ALEXIS CHRISTOFOROUS: --Goldman Sachs saying the economy is expected to rebound this year at the fastest pace in three decades? We've got the savings rate rising substantially. Should this relief package be targeting the people who need it most more than it is right now?

DON BEYER: Well, Alexis, I think everyone would like it to be more targeted, but that's difficult to do. For example, we have the $1,400 economic impact payments. And you know, we want them most to go to people who are way behind on the rent or have been unemployed for a long time and need to put groceries on the table. But how do you efficiently in the short run sort out those from other people in the same sort of income classifications who had a bunch of savings before?

And it was just easier to say some of this is actual relief. You know, life vest. And some of it is just economic stimulus to fill the output gap in the economy that will help it do that kind of growth that we haven't seen in three decades. Remember, we had a quarter-- just a second quarter last year where we were down more than 33%. It's gonna take us a while to get back to where we were before the start.

ALEXIS CHRISTOFOROUS: You know, Congressman, I know there are some moderate Democrats in the Senate who are pushing to lower the enhanced unemployment benefits in the bill as it sits right now. Some are looking to tighten the eligibility for the stimulus checks. If those things come to pass-- we had Congresswoman Jayapal on in the previous hour. And we asked her the same thing. If those things were to come to pass, would you have difficulty supporting the bill when it comes back around to the House next week?

DON BEYER: Now, Alexis, I wouldn't. I know that there will be some members who would. But, you know, politics is the art of the possible. When we compromise, we tend to get better legislation that everybody could support. In the Democratic House, we could for the moment do what we want. We have, you know, 7 or 8, 10 vote margin. But you can't do that in a 50-50 Senate with a filibuster even with Vice President Harris.

So I think, you know-- and in fact, one of the dilemmas with the hope for a bipartisan compromise was the best Republican offer that President Biden got was $600 billion, which is less than a third of the 1.9 that he wanted. If it comes back something more like two thirds of it, I think many Democrats in the House would swallow hard and vote yes.

ALEXIS CHRISTOFOROUS: What about those who say, you know, $1.9 trillion-- that sounds like we're overspending and not leaving money for other priorities, namely for infrastructure, which I think many Americans are longing for. We thought it maybe perhaps could be a bipartisan issue. What do you think the likelihood of an infrastructure bill getting passed any time soon is right now, Congressman?

DON BEYER: First of all, Alexis, let me apologize for the beeping. I'm in my House office. And they've just announced something on the House floor. So I apologize for that--

ALEXIS CHRISTOFOROUS: No worries. No worries.

DON BEYER: Yeah. First of all, I think the 1.9 billion-- as President Biden has said, tell me what you don't like. About the only thing that my Republican pals have been able to focus on is the money for state and local. And they don't differentiate between the two because many states have done just fine through the pandemic. But almost every local government has gotten hammered. And I know I represent a very wealthy part of northern Virginia. And yet every local government there is off significantly in its revenues.

And I do also think with interest rates, you know, despite the 10 year bonds, you know, are gonna be - we think they're gonna be low for a long time. And that's certainly what our fed chair is suggesting despite occasional spikes in inflation that this is the right time to be charging forward. However, Alexis, I also think that we're likely to see significant bipartisan pressure on an infrastructure bill to find some way to pay for at least some of it, if not all of it.

ALEXIS CHRISTOFOROUS: You know, Congressman, I know that your district which is just outside of DC houses a large number of federal employees. And I'm curious how that population is doing right now. And should theses stimulus checks maybe be targeted to them more than other people in the population?

DON BEYER: I actually-- my decision-- they might not like this. But I don't think it really-- because most of them-- the federal government workers have been employed throughout. And there have been the provisions within the law that have been able to keep most of the contractors working also, a lot of them remotely. The toughest ones have been the ones with security clearances where they can't work from home. They actually need to be at the CIA or at the GSA.

But they've been paid, too. We've been fighting more for making sure that the ones that have to go into work to serve us every day at the IRS and Social Security are on the priority list for the vaccines. But I'm much more worried about the service workers, the restaurant people, things like that, that really have been-- have lost their jobs and no way to make it back up. Those are the ones that need those checks.

ALEXIS CHRISTOFOROUS: Absolutely. Can't come fast enough for many of them. I want to pivot for a moment and talk about something that happened today with some Senate Democrats proposing-- Elizabeth Warren one of them-- proposing a new wealth tax targeting net worth. I know a couple of years ago, you yourself had proposed a surtax on millionaires along with Senator Holland where you really targeted income instead of net worth. What do you make of today's proposal? And what are the chances it can actually get enacted?

DON BEYER: Well, I think it's a responsible proposal. But I'm trying to take my leave from President Biden, who's been looking at, you know, perhaps corporate tax rates, buybacks, things like that rather than a wealth tax. There's a lot of concern about whether wealth tax is constitutional. And also, you know, as a business person myself, a lot of concern about how you would avoid it, how you would hide from it, which it's gonna be harder to do when you're pulling a number right off of your 1040 or your adjusted gross income.

Alexis, I lived in Switzerland for four years that had a wealth tax. It was much smaller. It was only, like, one half of 1%. But it created interesting behavior. Among other things, no one would pay down their mortgage because it would increase their net worth, because it affects them.

ALEXIS CHRISTOFOROUS: Yeah. It can cause some of those unforeseen consequences for sure as people try to dodge it. You know, as vice chair of the Joint Economic Committee, I'm curious to get your thoughts on what you see as the biggest threat or a headwind I guess to an economic recovery.

DON BEYER: I actually am pretty optimistic, pretty bullish on the rest of the year. I do think the greatest strategic struggle we have right now is how uneven the income is and the wealth is in the country. And I don't say this from a class warfare status at all. But when there's a significant sense of 30%, 40% of the people that have been left out of the growth, there's grievance. This is where the educations aren't happening. This is where they can't afford to go to college or start a business.

That we need to think about economic growth that is affecting every segment of our society. And I think then it will grow much more quickly than it does just at the top. You saw the number that just our American billionaires had their net worth increased by $1.9 trillion in 2020, which is about the size of the Biden COVID package. Those are not folks with a high propensity to spend. So let's also make sure that at least some of that money-- and not necessarily through wealth transfer, not direct transfer-- but rather creating an economy where everybody is lifted up.

ALEXIS CHRISTOFOROUS: All right. We're gonna leave it there. Congressman Don Beyer, always good to see you. And best of luck trying to get that stimulus through. We know millions of Americans are counting on it.

DON BEYER: Yeah. Thanks, Alexis, very much. Good luck.

ALEXIS CHRISTOFOROUS: Thank you.