WASHINGTON – Former New York City Mayor Michael R. Bloomberg unveiled a plan on Saturday that will bring in an estimated $ 5 trillion in new tax revenue from high-income earners and businesses. This proposal would almost certainly increase his personal tax burden, but is less aggressive than that of his most liberal rival for the Democratic President's nomination.
The proposal includes abolishing President Trump's tax cuts for high earners in 2017, as well as a new 5 percent “premium” on income of more than $ 5 million a year. It would increase capital gains taxes for Americans earning more than $ 1 million a year, and limit the deductions from state and local tax payments set out in the 2017 law, which some Democrats have pushed to eliminate.
For high-income owners of companies that are not organized as corporations, this would remove a tax deduction granted by Trump's tax cuts – and partially offset Trump's income tax cuts for corporations and raise their tax rate from 21 percent to 28 percent. Before 2017, the highest company rate was 35 percent.
However, the plan specifically does not advocate the so-called wealth tax, which is preferred by several of the race's more liberal candidates, such as the senators Elizabeth Warren and Bernie Sanders. Such a tax has gained popularity among voters, but Mr. Bloomberg's advisors believe it could be declared unconstitutional – a concern shared by some advanced legal experts.
Overall, Mr. Bloomberg's advisors estimate that over a decade, his increases would add $ 5 trillion in new taxes to fund new spending on health care, housing, infrastructure, and other initiatives. This amount is almost 50 percent higher than the tax increases proposed by the race's most financially moderate leader, former Vice President Joseph R. Biden Jr.
Mr. Bloomberg's advisors said it was possible that he would suggest additional measures to generate more income depending on how his other domestic spending plans are developing. They said he did not plan to use any revenue to reduce the existing $ 1 trillion deficit, which he sees as a long-term problem, but not an immediate one.
Mr. Bloomberg, valued at over $ 50 billion, spends hundreds of millions of dollars of his personal fortune to compete in a race in which he took part much later than his leading opponents. He still gives details of his agenda, even if these opponents participate in the primaries that Mr. Bloomberg bypassed. Instead, he plans to focus on states whose elections will take place later in the main calendar.
The tax plan comes at a crucial point in Mr. Bloomberg's candidacy: he is increasingly seen as a plausible candidate for nomination, and his national election numbers have risen to a high single-digit figure due to an advertising slump funded from his personal fortune.
But Mr. Bloomberg's extreme wealth has also made him suspicious of many Democrats who are deeply concerned with economic inequality. Some of his most prominent presidential rivals, including Mr. Sanders and Mrs. Warren, have accused him of buying the White House.
Mr. Bloomberg tried to alleviate some of these objections by promising to levy taxes on people like himself: he refused to approve Mr. Trump's tax cuts in 2017 and called for the day he took part in the presidential election Wealthy tax increases for the US. He has emphasized this attitude in television advertising, but until now he has not described in detail how he would try to get the rich to pay more.
He has also repeatedly postponed steps that would give voters and the news media greater insight into his personal finances. Postponing the submission of his personal financial reporting form until the end of March and refusing to let him know when he intends to file his tax returns. While Mr. Bloomberg would certainly pay more under his own tax plan, his campaign declined to disclose the amount and said that no such assessment had been made.
"At the moment, I'm giving almost all of my company's profits to charity," said Bloomberg in a statement on Saturday. "According to my plan, I will continue to do so – but I will also pay more taxes to ensure that all Americans have the same opportunities that I had." That is only correct. "
Some New Yorkers would most likely pay more than Mr. Biden's under Mr. Bloomberg's plan. This is in part because Mr. Bloomberg would maintain the so-called SALT cap on state and local tax deductions, which hits residents in high-tax states like New York particularly hard. Mr. Biden would lift the limit set at $ 10,000 a year. Mr Bloomberg's advisors say such a move would benefit taxpayers with higher incomes to a great extent, thereby running counter to Mr Bloomberg's goal of increasing the progressiveness of tax legislation.
It remains to be seen whether Mr Bloomberg's tax proposals will succeed in satisfying liberal voters or suppressing criticism of his tycoon status. Although he is skeptical about the progressives, his position as a company leader could add weight to his arguments about taxes and the economy for other voters.
Mr. Bloomberg's campaign hopes that if Mr. Biden gets stuck in Iowa and New Hampshire, he will be able to replace Mr. Biden as the leading moderator in the race. But advisors also see it as an urgent priority to win at least some suspicious left-wing voters to prevent a candidate like Mr. Sanders or Mrs. Warren from getting out of control.
Mr. Sanders and Ms. Warren have proposed many tax increases contained in Mr. Bloomberg's plan, and they have gone further. for example, both advocate repayment of the corporate rate to 35 percent. Mr. Sanders and Ms. Warren – together with a third candidate, the former hedge fund investor Tom Steyer – have also claimed a wealth tax on the largest private wealth, as Mr. Bloomberg rejects.
Jim Tankersley reported from Washington and Alexander Burns from Des Moines.