Competition Is A Premise Of Capitalism— But Conservatives Have Stopped Believing In Competition

Instead Conservatives Advocate For Unfettered Monopoly Power

When I read that Kamala wants to raise the corporate tax rate to 28% I had mixed emotions. 28% is way too low— but it’s an incremental step in the right direction after Trump and the corrupt conservative Congress rolled the rate back from 35% to 21%. The corporate tax rate fluctuated between 48% and 52%. Then in 1986 Reagan’s Tax Reform Act, best known for lowering the top tax rate for ordinary income from 50% to 28% and raising the bottom tax rate from 11% to 15% (while eliminating the tax deduction for rental homes), also lowered the corporate tax rate from 46% to 34%. Support was bipartisan with the majority of both Republicans and Democrats voting for it.

With the DCCC trying to stock the House with so many reactionary Blue Dogs and New Dems, I know it isn’t politically tenable for Kamala to raise the rate to 50% but bringing it back to 35% would probably be a better move than 28%. In fact, on Monday Sahil Kapur wrote that “A 28% corporate tax rate is lower than what Harris proposed in her failed 2020 presidential campaign, when she called for fully repealing Trump’s tax cuts, which would have returned the corporate rate to 35%. The new stance aligns Harris with President Joe Biden’s most recent budget proposal. Republicans are sure to object to a 28% corporate tax rate, meaning Harris may need Democrats to control the House and Senate in order to get it through Congress. But a potential President Harris would have some leverage over the GOP for negotiations on tax policy, as many other portions of the Trump tax cuts expire at the end of 2025, which will lead to a major debate in Congress next year about which parts to extend.”

Polls generally show that Americans think corporations and the very wealthy should pay higher taxes. This one from Morning Consult and Politico indicates that 74% of registered voters want to see taxes go up on the very rich and 73% want to see corporations pay higher taxes. Kamala's program calls for:

• Increasing taxes on billionaire income to 25%, ending the preferential treatment on capital gains, by taxing wealth at the same rate as we do wages. 

• Ending the stepped-up basis that allows the ultra-wealthy to pass along money to their heirs tax free. 

• Ending the carried interest loophole, a tax dodge for wealthy private equity and hedge fund managers. 

• Increasing the corporate tax rate. 

• Eliminating the tax loophole that allows companies to deduct the cost of paying executives more than $1 million per year.

Meanwhile former Secretary of Labor, Robert Reich wrote yesterday that “the administration should be using the threat of antitrust enforcement to force corporations in concentrated industries to lower their prices. Biden’s trust-busters— Lina Khan at the FTC and Jonathan Kanter at the Antitrust Division of the Justice Department— have been doing excellent work but they need to do more targeting and threatening. This is the direction Kamala Harris wants to go. Since the 1980s, after the federal government all but abandoned antitrust, two-thirds of all American industries have consolidated into a handful of giant corporations. When four or fewer firms dominate an industry, it’s easy for them to coordinate price increases and prevent price cuts— which is exactly what’s been happening. Last week, Kamala Harris announced she would go after corporate price gouging. Trump promptly accused her of seeking price controls. Much of the economic establishment— which justifiably believes price controls don’t work— went berserk. But Harris is not advocating price controls. She’s advocating just the opposite. The entities now controlling prices are big corporations. She wants to prevent them from keeping prices high by restoring competition. She’s exactly right.”