This week, Senator Elizabeth Warren, Democrat of Massachusetts, formally introduced a wealth-tax proposal that has made grown billionaires cry.
I interviewed her by phone on Tuesday, right after she stepped out of a vote. We talked about:
whether her proposed wealth tax is too big, as some billionaires charge, or actually too small,
whether Democrats are squandering the window of opportunity to change people’s lives,
why the fight to secure voting rights might be the red line that kills the filibuster,
why she continues to call herself a capitalist as American capitalism keeps failing so many,
whether New York Governor Andrew Cuomo should resign,
whether the Fox News disinformation problem should be addressed through the market or regulation,
if the tax deduction for billionaire philanthropy should be revoked,
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And today, by popular demand, and as a bonus for subscribers, I’m publishing the rough-cut audio of my conversation with Senator Warren here. If you haven’t yet subscribed, click this link and sign up and listen to our interview in podcastish form.
“Now we just need the courage”: a conversation with Senator Elizabeth Warren
ANAND: So I want to start by asking you about the wealth tax bill, which you formally introduced. Billionaire tears are already falling, but I wanted to ask you what CNBC is not going to ask you, which is: Is it possible, actually, that a 2- and 3-cent wealth tax is actually too small? Wouldn't the biggest fortunes still get considerably bigger every year? Why not go for an erosive wealth tax that would actually abolish billionaires over time?
ELIZABETH: Alright, you're going to love this. They actually asked me that this morning.
ELIZABETH: Doesn’t that tell you how the world is changing? That people are coming to understand the enormous wealth inequality in this country, much bigger than income inequality, and the need to level the playing field and force the guys at the top to pay a fair share.
So they were also asking, Should you raise the number? My view right now is 2 cents on fortunes over $50 million, 3 cents — a few more pennies above that — [on fortunes over $1 billion], and we can raise $3 trillion that will help fund universal preschool, childcare, infrastructure, clean energy. It would make a transformative difference in America. I think that's the right place to start.
ANAND: You've been a team player with the Biden administration. Did you speak to the president and or the treasury secretary before introducing this? And do you have their blessing for this proposal at this moment?
ELIZABETH: I have spoken to people in the administration. I don't want to name names, but I don't ask for anybody's blessing before I speak out.
ANAND: How much longer of a window do you think Democrats have to deliver a minimum wage hike, $2,000 checks, your plan for student-debt forgiveness before the year starts to kind of get away, people feel their lives are not improving, and there's a real risk of a Trumpist backlash in 2022?
ELIZABETH: Well, I'm going to take your question and reframe it slightly. We need to get a minimum wage and checks into people's hands quickly because we need to make those changes. It's not a political calculation. It's an economic and justice calculation.
We need to do it and do it now. Now, the good news is, we're likely to get the Covid package through next week. And that means the checks will be going out, that unemployment bonus will be added for people who are out of work, that money will be going to our public schools to reopen, and that there will be cash for local communities to be able to get their vaccination programs off at full efficiency.
But I want to line up the rest of our priorities. We should be working on them right now: gun safety, a wealth tax, immigration reform, the minimum wage, universal childcare, universal college, let's vote on all of it, and let's do it now.
ANAND: Standing in the way of a lot of that is, as you know, your colleague, Joe Manchin. And I was reading that, six years ago, you famously seemed to change his mind on cutting Social Security. Do you think you can change his mind on the filibuster? What do you think he needs to believe — given his constituency, given where he represents, his politics — what do you think he needs to believe to come around to your view on the filibuster?
ELIZABETH: I believe that every Democrat wants to get things done. Every Democrat wants to see this government work better for the people who've been left behind over and over and over. We have a lot of plans for how to do that. Minimum wage, wealth tax, immigration, universal childcare.
If Mitch McConnell blocks the things we want to do, again and again, I think that people across this country will turn even more sharply against the filibuster. So I think what's going to happen is we're going to tee up the things that need to get done.
Let me pick, actually, a more specific example of voting rights. Look what's happening around the nation. Republican legislatures have looked out at the voters in their states and said, When American citizens get access to the ballot, the Republicans are losing. So instead of rethinking what they do to try to get broader appeal, they're trying to figure out how to keep American citizens from voting. At least the American citizens who might vote Democratic.
So this becomes an urgent issue for Congress. It is our responsibility to protect the vote. If Mitch McConnell tries to block that, then filibuster reform is front and center. And I think that's true for all Democrats. You don't have to single one or another out. I think that's true for all of us.
ANAND: So, in other words, you think there's some point of crisis, at some point in this year, where things are being passed but blocked by McConnell, where someone like Manchin would change his mind.
ELIZABETH: I think that Democrats cannot — and will not — permit Mitch McConnell to veto everything that the American people sent us here to do.
ANAND: I want to ask you about one of the people your wealth tax would hit big, Bill Gates. He has played an almost quasi-political/governmental role in pandemic response for a whole bunch of reasons, as you know, with his various involvements and his interest in the topic and his philanthropic activities. Do you think he should be playing such a big role on public questions as an unelected private citizen?
ELIZABETH: I'm glad for the administration to draw on the time and talents of a wide range of people across this country. But, make no mistake, need a wealth tax so that every billionaire, whether they are generous or not, is paying a fair share to keep this country going.
ANAND: What kinds of themes and arguments and language that progressives don't generally use right now do they need to be embracing if they want to win a bigger swath of the American electorate? And I'm asking you because you straddle these worlds — Oklahoma and Massachusetts, Sunday school teacher and Harvard professor. As you know, progressives often don't quite reach the ear of some of those other communities that you've been part of.
ELIZABETH: I'm going to push back just a little bit on the premise of your question. Think about things that are broadly popular in America today. The wealth tax — you've seen the polling, right?
ELIZABETH: Increasing the minimum wage, increasing Social Security, universal childcare, canceling student loan debt, making college more affordable. Arizona recently passed an increase in taxes in order to pay for schools. An increase in the minimum wage passed in Florida.
Progressive policies are popular. They're popular across America. It's just not as popular in the halls of Congress. And the reason for that is that the folks in the Senate and House cater a whole lot more to lobbyists and billionaires than they do to people back home.
ANAND: I want to ask you a question about Governor Andrew Cuomo. Obviously, an investigation is going to take time and could take months, if not longer. Given what's already out there, though, it’s got to be hard for women to work with him and feel safe today, tomorrow, and the next day. Do you think he should resign for that reason, if no other?
ELIZABETH: I want to see a full investigation and see what facts that uncovers. I think that's the right place for us to be right now.
ANAND: You've called yourself a proud capitalist, albeit a reformist one and one who's not popular with other capitalists sometimes. What do you say to the growing number of Americans, especially younger ones —
ELIZABETH: Can I just stop you there and say, When you say, “Not popular with other capitalists,” I'm not popular with the folks who are very wealthy and think they should make more money by being subsidized by other taxpayers. I'm just having fun with you, but I really do want to make that point.
A lot of these folks are not capitalists. They're all for competitive markets for someone else, but they would like to live in an America where they're getting all of the tax breaks, where they're getting all of the subsidies, where their employees are supported through public dollars to pay for their healthcare and food and housing, and where the owners of these businesses don't have to pay a living wage. So I throw that in. Sorry to distract you, though.
ANAND: No, I think that's actually a very important point. It kind of gets at the question I'm asking, which is, I think a growing number of younger Americans say that maybe that viewpoint is confusing a feature for a bug. In other words, what if it is capitalism itself, its inherent logic, not the distortion of it, that is the problem behind this economy, this wealth disparity, this planetary emergency? What if it's a system that fundamentally elevates money, the pursuit of money, over the pursuit of all else?
ELIZABETH: I don't see it that way. And let me try to explain just a little bit. I believe that, at its best, we have a system that works with markets, and markets can produce a lot of value, but only markets with rules. Markets without rules are theft. And so confusing markets without rules, markets that are not real competitive markets, with what passes for capitalism in many parts of the world today is missing the central element. And the reason I think this is so important is that this is where we get into the discussion, for example, about socialism.
So what's your alternative to a market-based system? A system in which the government decides the allocation of goods and services? Because the problem you run into there is that the same bigotry and prejudice and lust for power that can infect a capitalist system can infect any other system as well.
This is about the need for vigilance in our rules, why we need rules that are fair and that are consistently enforced. If we do that, markets will produce great value and great opportunity for our people. And if we don't have their rules, replacing the market part of the system is not going to help.
ANAND: You were early to call Fox News “hate for profit” and refuse to go on during the campaign. And now there's been this growing debate about this problem of for-profit not just hate but disinformation, even incitement of violence, arguably, and there's a debate about whether that problem can be solved fundamentally through the marketplace of ideas, the marketplace of advertisements, boycotting and such, or whether there is some kind of regulatory remedy we should start thinking about, whether it's a reinvented Fairness Doctrine for the cable era or something else. Where are you on that question?
ELIZABETH: Yeah, this is a hard question. I start in the places where I can. Fox News is a hate-for-profit outfit, and I start with what I can do, and that is, I'm not giving them my voice. I think that that's wrong.bonus
I don't know all the answers here. But I know that we need a strong, independent media with the resources to investigate and to hold public officials accountable. Advertising funded that for a long time. That model has broken down, and how we get back there, I don't know. We're just going to have to keep working on this.
I have a real problem with the way that Google and Facebook have replaced much of the traditional media, and how they in turn have distorted the public conversation and whether there's any real accountability for officials and for giant corporations like themselves. So this is one I'm going to keep wrestling with the same way everyone else does.
And, actually, I should make a related point if I can. Because I'm still thinking about what you were asking me about markets. The same point is true around markets.
I don't pretend that things are balanced right now, that the markets have achieved anything approaching equality. The Black-white wealth gap in America is obscene, and it is deeply embedded in this system. Racial disparities in healthcare and housing and entrepreneurial opportunity and education all continue to exacerbate economic inequality. I try to hit back at that directly.
That's part of what the wealth tax would permit us to do. A 2-cent tax on the giant fortunes in this nation would give us the money to quadruple funding to Title IX schools. It would give us the money to invest in Black colleges and universities. It would give us the money to create an entrepreneurship fund that would make money available for people who are conditionally cut out of the funding process.
There are so many places we could make a difference if we had the will and the resources. So, to me, that's where I keep trying to put my energy — into: let's change the rules and let's enforce those new rules. Let's change the rules on taxation and then aggressively enforce them and use the money that we get to expand opportunity. That's how we make real change. That's what it is I want to do.
ANAND: When people are going to argue back against your wealth tax, the billionaire class is going to argue back, one of the alibis they're going to use is something I write about a lot: philanthropy and there's this matter of how they actually use philanthropy to cleanse their reputations, kind of as a populism-anger-management system, as a way to increase their power of the public life…
ELIZABETH: And a way to increase their political power!
ANAND: Yes. Should Congress look into eliminating tax deductions for big philanthropy?
ELIZABETH: I'm not sure I want to eliminate breaks for philanthropy. I want to start by saying: Taxes are not philanthropy.
We don't ask American middle class families, "Could you just kindly, out of the goodness of your heart, put in some money so that we can have an army, so that we can pave the highways, so that we can regulate clean air and clean water and build a power grid?" No. We tax people. This is what it takes to keep the nation going.
Only we have so under-taxed those at the top that it’s had two consequences. One is that it’s part of the reason they've been able to build such enormous fortunes, because wealth itself for this top group hasn't been taxed. But the second consequence is they then get to use it in ways they decide they want to use it. And, last I saw, there aren't many billionaires making charitable contributions to enforce serious environmental regulations, to enforce serious anti-monopoly regulations, to put in place a well-funded enforcement agency to make certain that people aren't getting cheated on financial products.
No, they want to direct money in the ways they want to spend it. And that's fine, but that doesn't relieve them of one penny of their responsibility to make a fair contribution to what it takes to run this nation and to run it not just for the benefit of the billionaires but the benefit of the rest of America.
ANAND: See, that's why I have to get you one of my “Plutes gonna plute” T-shirts. Last thing: at this moment in American life, where are you on the hope-despair continuum ?
ELIZABETH: Once Donald Trump lost and we took back Georgia, I moved a lot further along the hopeful continuum. We have tools to make real change. Now we just need the courage to do it.
Elizabeth Warren is a senator from Massachusetts. This interview was edited and condensed for clarity.
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