Why we should be raising (not cutting) taxes on the richest Americans right now

What Naomi Klein dubbed the “shock doctrine” is in full gear. Corporations are salivating over using the coronavirus crisis to further privatize public goods and services, from the U.S. Postal Service to public education.

For example, the CEO of the for-profit online education corporation K12 Inc., which is in the business of poaching students from public schools, recently boasted to investors about “the upside of the pandemic on our business.”

We know that privatization has zero upside for us—the public. It reduces transparency, limits democratic decision-making, lowers service quality, and increases inequality, all while rarely saving public dollars, so-called “taxpayer money.”

Doubling down on privatization right now would be like pouring high-octane gasoline on an already raging fire. (Or, like failing to repair century-old power lines in forests prone to wildfires—which is exactly what the private utility operator PG&E did a few years back, sparking the deadliest fire in California history.)

But that won’t keep right-wing think tanks and conservative politicians from repeating the pro-corporate talking point that privatization “saves taxpayer dollars.”

So, as the crisis plays out, what should we be arguing for insteadSimply put: raise taxes on those who can afford it.

As the Institute on Taxation and Economic Policy put it in a new report, “For states facing catastrophic revenue declines, asking more of taxpayers with a clear ability to pay is far preferable to cutting state budgets, which would lead to mass layoffs, steep cuts in public services, and a downward spiral in the economy.”

That means raising tax rates on upper-income earners, implementing “excess” profits taxes, and repealing corporate tax giveaways—to name a few ideas in the report.

The last thing we want to do right now is double down on tax cuts. Look where that’s gotten us: Almost a quarter of the local public health workforce has been let go since 2008. Funding for K-12 education remains well below 2008 levels in many states. Repairing America’s roads, water systems, and other infrastructure is estimated to cost $4.6 trillion by 2025.

And Washington sure isn’t helping. Federal spending on public health, education, and other nondefense discretionary programs is now at a historic low. The 2017 Trump tax cut, which overwhelmingly benefited the richest Americans, is only making things worse. (Netflix, which is thriving at the moment, has paid zero dollars in federal income taxes in the past two years. That’s right, zero.)

We know what didn’t work after 2008: privatization and tax cuts. Trickle-down economics, austerity, neoliberalism—whatever you want to call it—has made this crisis worse than it should’ve been. This time around, let’s fix our tax codes so we’re better off on the other side.