A major debate is brewing over that driest of topics no one likes to think about: Tax.

In a seismic shift, taxing and spending is now in vogue in US liberal politics.

Democratic policy plans aim to tax the very wealthy to pay for reforms. The basic idea has gained acceptance. Now media are reporting on how plans would or wouldn't work.


Congresswoman Alexandria Ocasio-Cortez initially jolted talk of tax reform from think-tank studies into Twitter videos.

She wants a Green New Deal to combat climate change, funded by a 70 per cent tax rate on income above US$10 million a year. Such a rate would return the US to pre-Reagan era taxing.

The idea of an income tax hike for the super-rich found favour with 70 per cent of voters in one poll last week and 59 per cent in another.

Tax reform has entered the Democratic 2020 presidential primary, embraced by at least two likely top-tier candidates.

Senator Elizabeth Warren has proposed a wealth tax of 2 per cent on US households worth at least US$50m rising to 3 per cent for fortunes over a billion. Wealth taxes have been tried in several countries with avoidance and fears over economic cost key difficulties.

Former Starbucks boss Howard Schultz, thinking of a run for the presidency as an independent, called the Warren plan "ridiculous". Mike Bloomberg, who may compete in the Democratic primary, raised the spectre of Venezuelan ruin.

Senator Bernie Sanders has a bill to raise the estate tax. It proposes a 45 per cent tax on estates worth US$3.5m to US$10m. The scale increases to 77 per cent for US$1b plus. US President Donald Trump has cut taxes on large inheritance.

Democrats would have to take back the White House and Senate to make good on such ideas. That means battling Trump, Republicans, the billionaire class, lobbyists and political donors.


Still, it's a rare case of liberals directing the economic agenda on their own policy patch of social reform. For decades Democrats feared drawing fire from the right over any attempt at tax-and-spend "big government".

But liberal awareness of the wealth gap, oligarchs, tax avoidance, and the stagnation for many people, has grown, in combination with frustration over job creation, poverty, pay and healthcare.

Former Obama adviser David Axelrod told the New Yorker: "This issue of inequality ... it's a problem that goes to fundamental confidence in democracy and ... capitalism. Those who are doing very well in this economy ought to recognise that this is an untenable trend."

Following the Midterms and shutdown, Democratic confidence is high.

Atlantic writer Adam Serwer noted the tax discussion "has forced Republicans back into publicly fuming that the richest people in America don't have enough money at a time when people are begging strangers on the internet for help with medical bills". Higher taxes for the super rich look almost inevitable, eventually.