White House Budget Director Shalanda Young refused to say how much is enough when asked to specify the “fair share” of taxes the wealthiest Americans should pay.
President Joe Biden has repeatedly said his 2024 budget proposal ensures that the wealthy pay their fair share in taxes, a theme Young repeated often when testifying before the Senate Committee on the Budget on March 15.
“Some analyses show some millionaires have an effective tax rate of 8 percent. The president believes that is inherently unfair. He believes that the tax code needs to be changed to make sure that everyone pays their fair share in this country, not just working families. And we have several proposals in which to do that,” Young said.
“At what point will you consider the wealthy to be paying their fair share?” Sen. Ron Johnson (R-Wis.) asked.
Johnson had cited findings from The Tax Foundation, a nonpartisan think tank, indicating that the top 1 percent of Americans earned 22.2 percent of the nation’s income and paid 42.3 percent of the nation’s income tax in 2020.
In 2019, the top 1 percent earned 21 percent of the income in America and paid 24 percent of total federal taxes, Johnson said.
Young did not answer Johnson’s question directly and again cited the statistic that the nation’s 400 wealthiest families paid an effective income tax rate of 8 percent.
Johnson countered that the top 1 percent of Americans pay an effective income tax rate of 26 percent while the bottom 50 percent of earners pay an effective rate of 3.1 percent.
“Again, I want to know, what should the top 1 percent pay in terms of total income tax?“ Johnson asked. ”What should they pay as a percent of total tax?”
Young would not state an ideal tax rate for the wealthy but offered to do a comparison of her analysis of the tax paid by top earners with that provided by Johnson.
The senator also questioned the president’s claim that his administration had reduced the federal deficit by $1.7 trillion, citing annual deficits of $1.37 trillion in 2022, $1.5 trillion projected for 2023, and $1.8 trillion estimated for 2024 in the president’s budget proposal.
“How can you claim this is reducing the deficit?” Johnson asked.
“Easily,” Young said, because the reduction was calculated over a 10-year window. “If you go look at 2033, the President’s budget would bring down deficits by $2.9 trillion.”
Most people would assume that deficit reduction would be measured year over year, not over a 10-year period, Johnson said.
Looking ahead to the projected 2024 spending deficit, Johnson said, “That’s a massive deficit—$1.8 trillion.”
“What do you think is sparking inflation, which caused the Fed to start increasing interest rates, which is causing the run of these banks?” the senator asked, speaking of the failure of Silicon Valley Bank and Signature Bank within the preceding five days.
“Hopefully we all realize that inflation is a global phenomenon,” Young said.
“The UK hasn’t had the same laws over the last few years that the United States has, yet it has inflation. India the same.”
