Where we differ from Warren and Ocasio-Cortez is in our belief that the best way to begin raising additional revenue from highest income tax payers is with a traditional tax reform approach of base broadening and loophole closing, improved compliance, and closing of shelters. We show that these measures, along with partial repeal of the Trump tax cut, can raise far more than recent proposals. These measures will increase economic efficiency, make our tax system more fair, and are perhaps more politically feasible than a wealth tax or large hikes of top rates. [Source]
Okay, so Larry has a part 2 to this that I'm deliberately not reading before I chime in here. I'll chime in and then read it to see if he anticipates me.
Here's what I want to deal with: "perhaps more politically feasible."
Larry's loopholes, etc., reads like a primer on how to keep estate and other taxes down. To change each one piecemeal would require overcoming every special interest one at a time. Each measure would have to slog through one committee after another. Now, if the Democrats gain enough control, perhaps things might go more smoothly for Larry; but, let's not forget that there are plenty of corporatist and neoliberal Democrats likely to still be in Congress and in high places.
Therefore, I personally think Warren's and ACO's approaches would be vastly easier to put through.
Perhaps Larry intends to package all of his proposed changes into one piece of legislation. That would be an improvement but still a bigger hurdle than Warren's and AOC's in my view, not that I disagree with Larry concerning "base broadening and loophole closing, improved compliance, and closing of shelters." I think he's right that those things should be done.
Okay, on to part 2.
Well, good for Larry. He gets it that unfair democratic (lowercase-d) power is the prime issue. He doesn't want to leave inequality able to purchase governmental policies and practices that will only benefit the super rich. Here's his answer.
If the concern is with the excessive power wielded by wealthy elites, there are more effective strategies. Consideration should be given to limiting the deductibility of lobbying expenditures; restricting the ability of political organizations to have allied 50(c)(3) organizations that can receive tax-deductible contributions; and tightening the rules on donor-advised funds that enable the wealthy to get essentially all the benefits of foundations without any of the requirements to pay out resources or provide any public transparency.
He addresses why he wants to focus on tax avoidance.
Economics literature suggests that a 1 percentage point increase in top income rates decreases reported taxable income by perhaps 0.6 percent. So more than half of the potential income from raising rates is dissipated as individuals increase their tax avoidance activities and perhaps also reduce their income earning. As a result, the ratio of economic distortion to revenue raised is likely to be very high for rates pushed up to 70 percent, especially when one recognizes that Ocasio-Cortez’s proposal would mean a top income tax rate of well over 80 percent for residents of New York City.
He's right about that, of course, and funding the IRS to go after everyone, as Larry suggested in part 1, would go a very long way to closing that off without having to first pass every individual change Larry advocates.
Additionally, the share of Americans who think the wealthy pay too little in taxes has actually declined since the early 1990s.
Oh, he's way behind the times and doesn't have a sense of what the up-and-coming generations think about this. All polling I've seen show quickly growing support for soaking the rich.
If America had had more figures like Bill Gates, Warren Buffett, and Steve Jobs over the last generation, it would have been a good thing, associated with a stronger economy even if measured inequality increased. Bill Clinton was right when he said that he wanted to see an economy with more millionaires, because that meant an economy with more job-creating successful businesses.
Okay, that's anti-progressive and flies in the face of actual data. It's trickledown nonsense. Why is he pushing it? Inequality has not been good for the American economy at all, quite the opposite.
So, he makes some valid points, but I'm not nearly convinced. Also, I was right that he wouldn't address the piecemeal-legislation issue. He did not suggest one legislative act to handle all of his suggestions.