Klobuchar argued Tuesday night that calls from Warren to reduce wealth inequality with a 2 percent tax on those earning more than $50 million could be accomplished in other ways. “Your idea is not the only idea,” she said. But experts have said Warren is right about the effects of the different tax rates paid by working Americans and those wealthy enough to live off of interest and investment gains.
The rate at which earnings on investments are taxed, also known as the capital gains tax, has always sat at a lower rate than taxes on wages earned at jobs. However, in 2018, more than 70 percent of capital gains tax benefits went to taxpayers with incomes over $1 million, according to an Urban Institute and Brookings Institution Tax Policy Center analysis.
The capital gains tax rate is such a key contributor to wealth inequality that of the household income growth realized in the United States since 1979, a disproportionate share went to the wealthiest 1 percent of Americans, according to a second analysis from the same think tank. That’s those who earn little of their income at a job but instead collect the bulk of their money from interest on savings and investment growth.
In 1979, the top 1 percent of American households took in about 9 percent of all income in the United States. By 2014, that figure had grown to 17 percent.
CORRECTION (Oct. 16, 2019): An earlier version of this post mischaracterized Klobuchar’s remarks. She said Warren’s wealth tax was “not the only idea” to reduce inequality; she did not say it was unrealistic.
The debate hashtag we needed
We interrupt your debate to bring on snapshots from the best hashtag of the night: #debatedogs.
Clash between two vets on stage
Gabbard and Buttigieg took off the gloves as their disagreement on U.S. wars abroad came into full focus.
Gabbard repeated her call for an end to “regime change wars,” which is how she describes U.S. involvement in the Syrian civil war. Trump last week announced that he was pulling around 1,000 troops out of the region.
But then Gabbard went further, describing economic and government sanctions against governments like Syria’s as a type of modern day “siege.”
Buttigieg — the only other post-9/11 veteran on stage — came to a strong defense of U.S. involvement in Syria, describing the small contingent of U.S. forces as an influential deployment that keeps Americans safe.
He said when the options presented are “endless war” and “total isolation,” the result is the U.S. abandoning the world stage.
Social media not having it with Gabbard’s Syria response
Gabbard’s response on Syria — saying the U.S. should not have participated in a “regime change war” — is not playing well on social media, where many people pointed to Gabbard’s track record of apologizing for Syria’s Bashar al-Assad.
Booker: Attacks on each other don’t work
Biden is no longer the presumed frontrunner in the race after Warren overtook him in several polls a week ago, and it is playing out in real-time on the debate stage as every candidate is taking swings at Warren on various issues.
This has forced her to be defensive and vigorously defend her positions. Notably, Biden has not fielded an onslaught in the same way tonight. However, Booker came in after the last skirmish and urged his opponents to disagree without “tearing each other down” because it will only serve Republicans and Trump. It raises questions for Democrats: Do they want a “nice” primary so that the nominee isn’t limping to the general? Or do they want a more aggressive race so that the nominee is prepared for Trump’s brash, unrelenting attacks?
Gabbard: “Donald Trump has the blood of the Kurds on his hands”
Gabbard, a veteran, excoriated Trump when asked about his decision to withdraw U.S. forces from Syria, which made way for Turkish forces to attack Kurdish fighters — leading to a bipartisan outcry, charges of a humanitarian crisis and ISIS resurgence.
“Donald Trump has the blood of the Kurds on his hands,” she said, noting that members of both parties are also to blame.
Gabbard, who has come under scrutiny for her position on Syria, called for the end to the “regime change war” there and to end the idea of using sanctions to punish countries. Gabbard also used the moment to take on her critics who have called her an apologist for the leader of Syria, Bashar al Assad.
How would Warren’s wealth tax work, and would anyone actually pay it?
The field debated whether to impose a wealth tax on ultra-rich households, with the conversation largely centered on a plan by Warren to — as she put it in the debate and in her speeches — charge “two cents” for every dollar billionaires own in assets and property, not just their annual earnings.
More specifically, she would charge a 2 percent annual tax on wealth for fortunes over $50 million and 3 percent on fortunes over $1 billion. She estimates it would raise $2.75 trillion over 10 years. Sen. Bernie Sanders recently put out a plan for a wealth tax as well that would raise taxes even higher on billion-plus fortunes, up to 8 percent, and raise $4.35 trillion.
Several other candidates said they were open to the idea, but Andrew Yang raised the criticism that similar taxes have been tried in Europe and were eventually repealed because they were difficult to implement. He’s correct that the number of nations with some form of wealth tax is on the decline — one OECD report found that number dropped from 12 to four between 1990 and 2017.
But it’s also not clear Warren’s plan wouldn’t raise a lot of money either. Economist Jonathan Gruber conducted a study of wealth taxes in Switzerland and found that, while reported wealth declined when taxes went up — a signal that the rich might be successful at finding new ways to avoid paying taxes — they still collected significant amounts.
“It doesn’t mean it’s a bad idea or it won’t raise money,” Gruber told NBC News. “Elizabeth Warren’s tax would raise money, it’s a question of how much.”
Biden gets first foreign policy question
Biden asked the first foreign policy question of the debate more than an hour in — this one focused on Trump’s recent decision to pull out troops in Syria, leading to a Turkish invasion. Biden offered strong criticism of Trump’s move.
“It has been the most shameful thing that any president has done in modern history in terms of foreign policy,” he said.
Elizabeth Warren vs. The Field
Elizabeth Warren has come under attack from fellow candidates in nearly every part of the debate, underscoring her recent rise in the polls and the threat other candidates feel as a result.
It’s a stark contrast from the previous three debates, when the candidates barely laid a glove on Warren, nor even really tried.
But tonight, Warren has come under fire on Medicare for All from Pete Buttigieg and an enlivened Amy Klobuchar, who said Warren’s plan was “making Republican talking points”; from Beto O’Rourke, who said Warren is “more focused on being punitive” toward the wealthy than “lifting people up”; and from Andrew Yang, who said Warren’s wealth tax had “massive implementation problems” in other countries that tried it.
Booker: Attacks on one another don’t work
Biden is no longer the presumed front-runner in the race after Warren overtook him in several polls, and it is playing out in real time on the debate stage as every candidate is taking a swing at Warren over everything under the sun.
This has forced her to be defensive and to vigorously defend her positions. Notably, Biden has not fielded an onslaught in the same way. However, Booker came in after the last skirmish and urged his opponents to disagree without “tearing each other down” because it will only serve Republicans and Trump.
It raises questions for Democrats: Do they want a “nice” primary so that the nominee isn’t limping to the general election? Or do they want a more aggressive race so that the nominee is prepared for Trump’s brash, unrelenting attacks?