Update 385 — 2020 Presidential Cand. Series:
The Economic Agenda of Rep. Beto O’Rourke
Robert “Beto” O’Rourke represented Texas’s 16th Congressional District in the U.S. House of Representatives from 2013 to 2019. In 2018, he came within three percentage points of beating Texas Sen. Ted Cruz in one of last cycle’s most-watched races. In March, Beto, 46, declared his candidacy for the presidency. His campaign thus far has focused mainly on immigration and gun control. But Beto made headlines with a plan to enact a brand new tax on a peculiar activity — U.S. wars.
Below, we examine the former Congressman’s “war tax’” proposal as well as other economic policy items.
Good weekends, everyone.
Self-billed as “modest,” Beto’s leading economic proposal would levy a new tax on every household in America without current members of the Armed Forces, or veterans. The revenue would be used to create a Veterans Health Care Fund for each congressionally authorized military engagement.
There is an element of progressivity to Beto’s plan: households making $30,000 or less annually would pay $25 per year, those making $40,000 or less would pay $57, $50,000 or less would pay $98, $75,000 or less would pay $164, $100,000 or less would pay $270, $200,000 or less would pay $485, and $200,000 or less would pay $1,000. Each Congressionally-authorized war would trigger a separate ‘“war tax,” covering the entire duration of combat activities.
Along with the flat rates, which create steep cliffs for households on the edge of bracket limits, Beto’s plan does not provide any exemptions for low-income taxpayers. Some progressives have pushed back on the proposal. While this idea has been praised as ‘innovative’ by fellow lawmakers, it is not entirely without precedent.
- The Revenue and Expenditure Control Act of 1968 (enacted): This law imposed an additional 10 percent tax on incomes for both individuals and corporations to offset costs stemming from the Vietnam War. Certain low-income taxpayers were exempt, and the tax expired at the end of the war.
- Former Rep. Dave Obey’s proposed Share the Sacrifice Act of 2010: This proposal would have enacted progressive income taxes to pay for the war in Afghanistan each year. Individuals with income less than $30,000 were exempted along with current members of the Armed Forces or immediate family members of service members who die while on active duty (the bill did not receive a floor vote).
In Congress, Rep. O’Rourke devoted much of his energy to veterans’ issues. Trust funds would support veterans’ hospital care and medical services, disability compensation, and other related programs.
- Wall Street Reform: O’Rourke supports stronger government oversight and regulation in the finance industry. He advocates for a more empowered Consumer Financial Protection Bureau and the establishment of a Public Credit Reporting Agency within it. He calls for reducing “too big to fail” and “taking on shadow banking,” although a specific plan of action is still forthcoming. Beto also supports a 0.1 percent financial transaction tax as a means of raising revenue and in hopes that it would curb speculation.
- Apprenticeship and Workforce Development: Income inequality is exacerbated when gains accrue only to those who have the skills to participate in the economy. 60 percent of companies worry about the cost of having jobs go unfilled due to lack of skilled workers; 25 percent cited revenue losses associated with the skills gap. Beto has a plan to address this: make community college free, invest $90 billion over the next ten years to create more federally-registered apprenticeship programs, and triple the current federal funding levels for adult training programs.
- Union Revival: Rep. O’Rourke touts strong support from organized labor and has a comprehensive plan to strengthen union power. Beto supports the Protecting the Right to Organize Act (PRO Act), H.R. 2474, which would enhance workers’ right to support boycotts, strikes, or other acts of solidarity, and increase penalties on employers who violate labor laws. He opposes mandatory arbitration agreements and supports efforts to condition federal funding on whether companies provide fair wages and the rights of their workers to organize.
Beto’s run against Sen. Cruz in 2018 ultimately ended in defeat but did not quash his supporters’ enthusiasm. In the months following the election, some predicted the former Congressman would be among the 2020 frontrunners. But it has been a challenging few months on the campaign trail as Beto consistently polls in the lower tier of candidates, around two to three percent nationally.
Following a vicious and politically-motivated mass shooting in El Paso last month, Beto suspended fundraising emails and political ads, and returned home to comfort victims. He put forward an array of gun control proposals and famously declared on the debate stage, “Hell yes, we are going to take your AR-15, your AK-47.” He got attention and some plaudits, but his standing in the polls did not change.
One reason for this may be that Beto has yet to put forward a comprehensive and detailed plan on the macroeconomy and income inequality. While in Congress, he opposed the 2017 Republican tax law and has since called for repealing its “worst excesses.” But while his rival Democratic candidates have released detailed proposals on implementing a wealth tax, paid family leave, a jobs guarantee, or a universal basic income, Beto has kept a relatively low profile when it comes to economic policy. As president, it is unclear what Beto’s vision for the future of the country would be and what signature economic policies he would pursue as a top priority.