Biden's proposals to tax high earners not sensible from long term perspective: Douglas Holtz-Eakin

Let’s talk about it now. Joining us is former North Dakota Senator, you of Chicago politics director and CBC contributor Heidi Heitkamp, and American Action Forum President and former chief economist, the President’s Council of Economic Advisors, Douglas Holtz. Eakin, Senator, is there any chance that that proposal as it’s put into the budget passes? No, absolutely not. And it’s there’s no chance that every part of the the Trump tax law is going to expire. They’re going to extend it or they’re going to rework it. And so, you know, the president’s budget is not a budget document. It’s a political document. He wants to make the point that he is advocating for higher taxes on billionaires. He did that in this document. But there is no chance that that’s going to pass. But it’s full employment for lobbyists. Let me tell you people here, people, it’s just not going to happen. I want to go back to you, Senator, because this is legislative. So you said and and the president has said I I’m going to let it expire for people making, you know, over 400,000. But it’s a rule, it’s it’s a piece of legislation. How can you let parts of it expire and not others? Because the president has said twice and also on Twitter in the last week that he’s going to let the whole thing expire and never mention income limits. Well, let me tell you that that so much of what’s in there, especially as it relates to the transition from what we call Schedule A itemized deductions to basically standard deductions, has really benefited a lot of lower income people. And then think about the states that Democrats represent. They are states that have been severely disadvantaged from the SALT deduction and that is going to be a hard push against someone like Chuck Schumer. And so I think you’re going to see some negotiation. You’re going to see people coming in with, you know, a modified plan, whether it’s offsetting some of this with a child tax credit, the negotiations will begin because it is not good politics for Democrats to let the entire tax law expire and not extend. And that’s why it was done that way. Quite frankly. The corporate tax deductions or tax rates were permanent. These were temporary because no one thought that in the end that this would not get extended or reworked. The last two tweets, Douglas, the president never mentioned income limits. It is said I’m going to let these things expire. We hear a lot about fair share. Listen, federal debts exploded. Federal spending exploded. The federal deficits exploded. Government’s wasting hundreds of billions a year in missed, you know fraud waste and abuse. Not my opinion. That’s the general accounting office and yet all we talked about is higher taxes, higher taxes. We never talked about fixing the problems. If you just fixed the waste, fraud and abuse in the government, you could save hundreds of billions a year, yes, and you would still have enormous federal deficits facing. So I want to begin by just agreeing with the senator that this is a political document and if these proposals are in there precisely because they will not pass the Congress and they as the luxury of simply using them on the campaign trail on the substance. First you do have to deal with the spending side. The threshold decision. Congress makes us to spend the money. You then figure out how to pay for it and it has for years been unwilling to control the spending. The key to spending is not just the waste pod and Bruce, it’s the large mandatory so-called entitlement programs and the president and Kennedy, Trump have both taken them off the table. That’s a disservice to this country. If you go to the tax policy, this is not great tax policy. You know what you need to do is do it in the context of the sunsets of 2025 and get a comprehensive plan that supports long term economic growth. We have terrible growth in the 21st century and allows us to generate the revenue we need to take that part of the fiscal problem off the table, finish the job on the spending side. This isn’t the answer to that. This isn’t the wealth tax. They only realize capital gains is taxing wealth. We don’t even know if that’s constitutional. And we do know from research that that I’ve done with some co-authors that of the dollar of wealth taxes, $0.60 ends up in lower wages for average people. That’s not a favor to them. And and and many countries in Europe that had a wealth tax have done away with it because they found out that it was more expensive to actually administrate the wealth tax than the money they got in. And that’s I think, Douglas, a key point that I want you to hit on. Right? And I, I get it. People have no sympathy for, and a lot of this is for families with net incomes or net worth more than 100 million. So that’s like nobody. And so most people are like, yeah, tax them, not me. But here’s the reality, I don’t think here’s where the politicians, and by the way, both parties have done it, be disingenuous. It’s like, yeah, if if this gets enacted, you’re going to raise a little bit of money, but it’s like enough money to operate the government for a day or two, that’s it. It will have no impact on anything. And yet they say it in speeches like we’re going to solve all of our problems by raising $20 billion a year when the government spends $10 billion a day. Yeah, you’re right. You’ve got it right, Brian, if you indeed decided to simply confiscate all of the wealth of every billionaire in America, you could run the federal government for nine months and then what do you do? So none of these proposals to sort of go after high income individuals are sensible from a long term perspective.