Mike Bloomberg 2020

Keep Up With Mike!

Keep Up With Mike

Keep Up With Mike!

Tax Policy

Mike is proposing tax reforms targeting the wealthiest people and corporations in the country, to pay for critical priorities like health care, infrastructure, education, climate resilience, and affordable housing. Mike believes that the current tax system is deeply unfair because it taxes income from capital at a much lower rate than income from work, allows accumulated wealth to pass from generation to generation with little or no tax due, and provides countless loopholes that the rich can exploit to reduce their taxes still further. To improve the nation’s tax system and make it fairer for everyone, Mike proposed raising rates on high-income taxpayers, taxing capital income more equitably, closing loopholes, and bolstering enforcement.

Mike’s Plan:

Raise rates for high-income taxpayers

The 2017 tax reform gave most of its benefits to the rich. In other words, instead of working to reduce inequality, Trump is making it worse. Mike sees growing inequality as a threat to all Americans. It is unacceptable. He will dedicate his administration to turning this dangerous trend around.

  • Reverse the Trump tax changes for high-income households, restoring the top rate on ordinary income from 37% to 39.6%.

Tax capital income more equitably

One of the biggest defects in our tax system is the way we tax capital gains for high-income taxpayers. Mike will ensure that wealthy owners of capital are taxed on equal terms with workers.

  • Tax capital gains at the same rate as ordinary income for taxpayers above $1 million. Taxes won’t rise on the savings of ordinary taxpayers.
  • Strong new measures to curb avoidance and deferral for the wealthiest Americans.

Impose a new tax on the very rich

Getting taxes on capital and taxes on income from employment on an equal footing is essential – but not enough to pay for vital investments. Mike will ask the wealthiest to make an additional contribution toward paying for necessary improvements in infrastructure, education, health care and more.

  • A 5% surtax on incomes above $5 million a year.
  • Will apply to income from capital and labor.
  • Will affect less than 0.1% of taxpayers.

Reform the estate tax

In the U.S., only very large estates are liable to face tax, and owners of the biggest estates are expert at gaming the system to reduce what they owe. One of the most egregious loopholes is “stepped-up basis at death,” which erases taxes due on trillions of dollars in capital gains – allowing enormous wealth to move virtually untaxed from generation to generation. Under Mike’s leadership, all this will change.

  • Lower the estate-tax threshold, so that more estates are taxed. This plan will protect family owned farms and small businesses. Estates liable to pay tax will still be less than 1% of the total.
  • End stepped-up basis for unrealized capital gains at death.
  • Shut down multiple estate-tax avoidance schemes.

Close loopholes

The U.S. tax system is full of complexities that could have been designed – and in many cases were designed – purely to give high-income taxpayers ways of paying less. This is deeply unfair to the ordinary working families that pay every cent of what’s owed, and lack the means to find and use these loopholes. Mike will work for a thorough simplification of the system, so that tax preferences serving no good purpose are purged. For example, he will:

  • Close the “pass-through” 20% deduction that lets many rich taxpayers pay less.
  • End the “like-kind” provision that lets real-estate investors defer tax indefinitely.
  • End the carried-interest loophole.
  • Move firmly to shut down other tax-avoidance strategies.

Make businesses pay their fair share

Trump’s tax reform cut business taxes too much – giving U.S. businesses a bigger tax cut than they had even asked for. While our tax code needs to ensure that our producers stay competitive with foreign companies, they can and should contribute more. We also need smarter and more effective measures to prevent companies using financial engineering to shift reported profits to foreign tax havens.

  • Raise the corporate tax rate from 21% to 28%.
  • Raise the minimum tax on foreign income and apply it on a per-country not global basis.
  • Tighten rules on transfer pricing and reporting of foreign taxes.
  • Apply pressure to countries that set up as tax havens.
  • Take the lead on cooperative international efforts to defeat profit-shifting.

Equip the IRS

The agency’s systems are out of date. IRS staffing has been cut by a third since 2010. The rate of audit of high-income households has fallen by almost half. This decline in IRS capacity has worsened under Trump, and the message has gone out to tax cheats: Don’t worry about getting caught. The so-called tax gap – the difference between what’s owed and what’s actually collected – stands at roughly $6 trillion to $8 trillion over ten years. An IRS equipped to do its job could cut that gap substantially.

  • Reverse Trump’s efforts to cripple the agency and give it the resources it needs to do its job.
  • Collect many hundreds of billions in taxes owed but never paid.

These and other reforms will raise approximately $5 trillion over ten years.

Mike’s Record:

While Mike was mayor, New York City had one of the most progressive tax structures in the nation, with low and middle-income taxpayers holding very little or no tax liability and the wealthy paying the bills. Nearly half of all income tax filers had no income tax liability or negative liability (meaning they received money back), while the top one percent of earners paid nearly 50% percent of the City’s personal income tax haul, and the top third of filers paid 94%.

All told, during his Mayoralty, Mike Bloomberg increased taxes on the wealthy by nearly $18 billion.

Trump:

President Trump signed the Tax Cuts and Jobs Act into law in December 2017. The bill was designed for big, profitable corporations and the wealthiest Americans, and corporate earnings over the last couple of years show why companies were such enthusiastic cheerleaders of the tax cuts.

By cutting the corporate rate to 21 percent from a high of 35 percent, the law has reduced the effective tax rate that many companies pay. That has fueled after-tax corporate profits. The tax law was clearly a driver of that increase — because profits before taxes rose at a much slower rate.

In addition, dozens of major corporations paid zero in federal income taxes last year.

In addition, Trump promised his corporate tax cuts would result in a significant pay raise for working families. Census data show that median family income in the first year after the tax cuts barely grew at all.

And, Trump predicted the economy would grow as fast as 6%. Instead, annual growth has averaged well under 3% since the tax plan was enacted.

Learn More About Mike's Plans