Update 412 — 2020 Pres. Candidate Series;
Fmr. New York City Mayor Michael Bloomberg
Michael Bloomberg is making what could be a billion dollar bet — on himself or, in the alternative, against Donald Trump.
Should Mayor Bloomberg’s own bid for the Democratic presidential nomination not prevail, Democrats could reap a munificent consolation prize. Bloomberg has hundreds of millions of dollars at his disposal to spend on defeating Trump in November, regardless of the party’s nominee. This could mute attacks on him in the nomination contest.
Below, we focus on the candidate’s domestic economic policy history and proposals.
Good weekends, all…
Former three-term GOP Mayor Michael Bloomberg of New York launched his presidential campaign in November last year. Several national polls have Bloomberg as high as fourth place among Democratic candidates. He has not yet participated in any debates because his campaign is self-funded, but he will likely be on the stage later this month; the DNC recently eliminated donor requirements for future debates, starting with the one in Nevada on February 19. Bloomberg’s first appearance on a primary ballot will be on Super Tuesday.
Mayor Bloomberg is among the world’s richest people and has already spent more than $200 million on his candidacy. A former Republican who spoke during the 2004 Republican National Convention in support of then-President George W. Bush, Bloomberg is running on an electability and pro-business platform.
Last weekend, Bloomberg released his tax plan; it’s progressive, comprehensive, and full of technocratic adjustments. Below, we detail the key parts of the tax proposal as well as several of his other economic policy ideas.
Squeeze if Not Soak the Rich
On the whole, progressives should be satisfied with Bloomberg’s tax proposal. If enacted, the plan would bring in an estimated $5 trillion in revenue over 10 years. Bloomberg would use that revenue to finance new spending on health care, housing, infrastructure, and other initiatives. It is arguably more ambitious than Vice President Biden’s plan but less than those of Sens. Warren or Sanders. The plan does not, for instance, include a wealth tax, but it does repeal some of the worst excesses of the 2017 Republican tax cuts (TCJA).
Here are the key takeaways:
- Income Tax Rates for the Wealthy: Mayor Bloomberg’s plan calls for a restoration of the top marginal tax rate from its current level of 37 percent to 39.6 percent (pre-TCJA level). Bloomberg would also create an additional five percent surtax for taxpayers making more than $5 million a year. This tax would be levied on earned income as well as investment income.
- Capital Gains Taxation: Long-term capital gains (sale of assets) currently enjoy lower levels of taxation than regular earned income. The top rate for capital gains income is 20 percent, plus an Obama-era Net Investment Income Tax of 3.8 percent. Bloomberg’s tax plan would subject capital gains income over $1 million to ordinary income tax levels.
- Corporate Tax Rates: TCJA cut the top corporate income tax rate drastically, from 35 to 21 percent. Bloomberg calls for that rate to be raised to 28 percent. In an effort to cut down on tax sheltering and avoidance, Bloomberg also advocates for changing current tax rules around income earned abroad.
- Loopholes and Enforcement: TCJA’s infamous Section 199A “pass-through” loophole would be closed, as would like-kind exchange rules on real estate that allow deferral of gains on qualifying property exchanges. Bloomberg also advocates for beefing up IRS funding, which Republicans have systematically starved since the Obama Administration.
- Support for Small Businesses: Bloomberg would direct federal funds to help state and local governments with creating and/or expanding Business Resource Centers. These entrepreneurship centers would provide assistance for small businesses. Bloomberg also supports reducing bureaucratic hurdles for entrepreneurs navigating the Small Business Administration. He would devote additional resources towards the Small Business Investment Company program, which provides subsidized funding for small businesses.
- Rural Economic Development: Communities neglected by President Trump are a key focus of Bloomberg’s 2020 economic platform. As part of his “All-In Economy,” Bloomberg plans to devote billions in federal funds to research and development initiatives in agriculture, manufacturing, and medical sectors across the country. Bloomberg would also prioritize strengthening infrastructure in rural areas. This includes ensuring broadband access and providing technical assistance to aid those areas integrating into the online information economy.
- Jobs and Apprenticeships: Bloomberg has consistently focused on job creation and workplace training. As the three-term Mayor of New York City, Bloomberg established high schools that provided traditional education and workforce training. As president, Bloomberg wants to devote federal funds towards workforce development through investing in community and technical colleges to train prospective workers in skills for high-demand jobs. He aims to have one million students earn apprenticeship degrees by 2030.
Yesterday, Bloomberg pledged in a New York Times op-ed that, as president, he would make combatting income inequality a priority, touting his proposal as Mayor to raise taxes and his ability to convince the Republican-led State Senate to agree. But details outside his tax plans are scant. Spokespeople for Bloomberg’s campaign have indicated that further details are forthcoming.
Bloomberg’s campaign strategy has been to emphasize his electability. Per FiveThirtyEight, he has a higher national polling average than Mayor Buttigieg, Sen. Klobuchar, and fellow billionaire Tom Steyer. Vice President Biden’s poor showing in Iowa may have created an opening for Bloomberg. If his current proposals are any guide, Bloomberg will continue to focus on modest, liberal ideas that do not distract from his main claim that he is the only candidate able to defeat Trump come November.