Tax The Rich

 Krugman's weekend explainers are always pretty good, but today he looks at the decline in tax enforcement under the GOP going back to the 1980s. The story - unsurprisingly - has been that whenever possible, when Republicans have the trifecta, they slash enforcement measures by the IRS. The people most likely to avoid or evade taxes are the very rich. They have both the motive and means to create tax shelters or pass-through corporations or offshore accounts to avoid paying their share of tax. The tax code itself is legally crafted to preference capital over wages, and when you add various legal and illegal measures, the very rich pay a much smaller share of their yearly income or wealth than do people who earn most of their money through wages and salary.

When you hear various left wing populists talk about Medicare for All or expanding program X, they typically don't talk too much about where the money will come from, as they have learned from Republicans not to care about the national debt. However, we really are starting to get to a place where government borrowing to finance the debt is crowding out private borrowing, which is one reason why interest rates remain high. 

Closing the tax avoidance gap will by itself will not fund the progressive wish list. Particularly Medicare for All will require broad-based taxes to fund a broad-based program. You also likely need some version of a wealth tax to target the multi-billionaires, but again, this likely won't fund everything you want to do.

The thing is the billionaires have largely chosen their side. They are lining up behind Trump, because his own lawlessness and disregard for the public weal mirrors their own. Google just changed Lake Ontario to Lake America on Google Maps, which strikes me as a terribly short-sighted decision on the part of a company that is ripe for anti-trust prosecution under a Democratic administration. You could squint and see an argument that Democrats should go too hard after billionaires to prevent them from giving all their money to the GOP - most corporations balance their campaign contributions to preserve access to both sides. The billionaires have chosen their side, and like Trump himself, they aren't likely to be challenged on this by the murmuring minions who surround them.

Writing tax enforcement into law will help a lot. I would think you should also craft a treaty with the EU to standardize tax enforcement, because there will absolutely be efforts to hide wealth offshore. The Panama Papers were proof of that. Creating a universal enforcement regime and a universal suite of consequences would go a long way to stopping the descent into oligarchy. If Sergei Brin decides to avoid paying his taxes, and Google pays the price along side him, would he still avoid taxes?

Unravelling the corruption of Trumpistan will not be easy, and the Supreme Court will try and stand in the way. However, that has to be a major focus of the next Democratic trifecta.