OPINION: Biden's plan would grow the kids and spread the wealth

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Pam Sohn, Chattanooga Times Free Press, Tenn.
·5 min read
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May 1—Countries are often judged by the way they treat their children, so the fact that the richest country in the world — the United States of America — has one of the highest, if not the highest, child poverty rate of all developed nations does not reflect well upon us.

And COVID-19 didn't help. Well, it did help some big companies profit, but it didn't help with child poverty.

Columbia University's Center on Poverty & Social Policy put the child poverty rate in America before the pandemic at about 18.7%. By August of 2020, the rate climbed to 21.4% and fell back again to 19.9% in October as some jobs came back.

It's common sense that strong, well-fed, well-educated, well-cared for children grow up to get better jobs and help build stronger communities — stronger countries. And for this, the Biden administration has a plan. In short, that plan is better and earlier education, health care, child care — and eventually jobs.

"The American Families Plan is an investment in our children and our families — helping families cover the basic expenses that so many struggle with now, lowering health insurance premiums, and continuing the American Rescue Plan's historic reductions in child poverty."

That's the White House's one-sentence explanation of President Joe Biden's $1.8 trillion spending and tax plan aimed at dramatically expanding safety net programs for families — largely to be paid for with tax increases on the wealthy and with IRS changes that will close the loopholes now allowing the richest of the rich to skirt most of their tax obligations.

How does the White House define safety net programs? Again: Access to affordable education, affordable health insurance and affordable child care.

What does that look like? It looks like a policy of providing every American with two years of tuition-free community college, pre-kindergarten for all 3- and 4-year-olds, and paid family and medical leave for American workers. It would be a plan that devotes hundreds of billions of dollars to fighting child poverty and ensuring affordable child care nationwide.

Aren't these things the least we should expect in the richest country in the world?

Instead, our richest country also has the biggest wealth gap — thanks to the Trump-pushed tax cuts to the wealthy and our healthy stock market that favors the rich and is out of reach for most of the rest of us.

Even during the COVID-19 pandemic, America's super rich — the world's richest, too — got richer. The top 1% own 44% of financial assets.

The Allianz Global "Wealth Report 2020: Wealth Immunity" begins: "Never in the last ten years were we able to report such a big increase in wealth . [N]ever was growth faster in the 21st century."

Yet while the rich got richer, the poor got poorer and the middle class lost ground.

Under Biden's American Families Plan, the rich will begin to pay their fair share again. White House officials are proposing $1.5 trillion in tax hikes aimed primarily at wealthy Americans and investors. The plan also would double the capital gains tax rate for those earning more than $1 million a year. Biden also aims to raise money through a sizable increase in enforcement by the Internal Revenue Service.

These tax increases would apply only to three-tenths of 1% of Americans. Most of us don't earn more than $1 million a year. And the closest most of us — 75% — come to the stock market is a 401(k) or other retirement account that is not subject to capital gains taxes.

Still, the proposal is likely to face resistance on Capitol Hill, where many members — and their mega-donors — are multimillionaires and billionaires.

This is the Biden administration's third spending plan in 100 days. His first spending initiative, the $1.9 trillion stimulus plan, passed with Democratic votes only. The second, a $2.3 trillion jobs and infrastructure proposal, has faced bipartisan criticism — but especially from the GOP.

We can count on this newest one bringing screams from the GOP, as well. In addition to their tax concerns, it's routine for anything with "safety net" and "poverty" in its explanation to set off GOP "welfare" whines. Some Republican politicians already are claiming this is a big expansion of the "welfare state."

Let's be realistic: When Amazon, Netflix, Chevron, Eli Lilly and the (John) Deere companies — along with at least 55 other corporate giants — reported their 2018 federal taxes amounted to effectively $0 on the heels of 2017's tax cuts, the only real "welfare" here is corporate welfare.

And, no, that corporate welfare did not trickle down to the rest of us — especially not to the poor and not during the pandemic.

Yet many corporate profits zoomed during the pandemic, especially for tech and supply companies. Meanwhile, the Institute on Taxation and Economic Policy, a nonpartisan, Washington, D.C.-based think tank, revealed in a December 2019 report that twice as many corporate giants avoided all federal income taxes in 2018 as had in previous multiyear tallies.

"[I]n 2018, 60 of America's biggest corporations zeroed out their federal income taxes on $79 billion in U.S. pretax income. Instead of paying $16.4 billion in taxes at the 21% statutory corporate tax rate, these companies enjoyed a net corporate tax rebate of $4.3 billion."

These mega-companies are rich because they are in the U.S. They can and must do their share to rebuild America. Congress needs to make sure of it.