A populist undercurrent running through President Biden’s State of the Union address and fueled by troubled global economic conditions is resonating with Americans.
It’s the feeling that people are “getting caught,” as Biden put it, in an economy that isn’t “fair” — a word that appeared in Biden’s prepared remarks nine different times.
From the pesky fees charged by big retail banks to the deep, structural imbalances in the US tax system that favor the rich and big corporations, Biden’s speech hit on a perennial frustration in American economic life. : what it feels like to have the deck stacked with big companies and institutions against the ordinary. taxpayers and consumers.
“If we – the poor people, the middle class – pay taxes, the big companies should do the same. It’s right. So I think the President [said] something that is true. We need more taxes to be paid by big companies and then that money can go back to poor people to help people,” said Jean-Michel Dossous, a New York City cab driver who watches well in the State of the Union on his phone, he said. The Hill.
Returning to the idea of economic rationality again and again, Biden announced several initiatives to lower prices after a year of high inflation that has harassed American pocketbooks and that fiscal authorities, such as Congress and president, have limited powers to fight.
“Big Pharma is unfairly charging people hundreds of dollars [for insulin] — and create record revenues,” Biden said in his speech Tuesday, praising the $35 cap on insulin prices for seniors using Medicare that was passed as part of the Democrats’ Inflation Reduction Act last year. Price caps are used only minimally in the government’s fight against high prices, which are largely the responsibility of the Federal Reserve.
He also praised his administration’s efforts to combat so-called “junk fees,” costly penalties imposed on banks, financial firms and other businesses for reasons such as late payments, insufficient funds or attempt to cancel a service.
“I know how unfair it feels when a company overcharges you and you lose it,” he said of overdraft fees charged by banks, a commercial practice he has called out in Congress to block the new law.
The Biden administration also announced last week an effort to cap bank overdraft fees at $8 through a new rule to be issued by the Consumer Financial Protection Bureau (CFPB).
Tatiana Nazario, an administrative assistant at the Newark, New Jersey, public library told The Hill that she “absolutely” feels like she’s being ripped off by the big banks and that she knows people who are stuck in a cycle of debt. due to overdraft fees.
While some major banks are phasing out overdraft fees, bank lobbyists and industry advocates are calling the penalties a useful and popular way for consumers to streamline costs. .
“If you get an overdraft fee and it stays in your account for a few days, they’ll keep overdrafting you until you pay it off. If you’re already broke and you’re waiting for that direct deposit to hit, by the time it hits you don’t have much left,” Nazario said in an interview.
“People make a living on payday loans, and now they promote these apps … where you can get payday loans instead of creating better solutions for us,” he added.
The CFPB describes payday loans as short-term, high-cost loans for small amounts of money and warns that “people’s ability to repay the loan … is generally not considered by a payday lender .”
Of all the references to economic inequality in Biden’s State of the Union, perhaps the point he hammered home was about the unfairness of the tax code.
“I think many of you at home agree with me that our current tax system is unfair. The idea that in 2020, 55 of the largest companies in America will make $40 billion and pay zero in federal income tax? That’s not fair,” Biden said.
Steve Taylor, an adjunct professor of English at the City University of New York, said he felt the same way, arguing that the wealthy and corporations should pay more.
“I think they should pay their fair share. They escaped execution. These guys don’t pay any taxes. I mean, come on. I pay taxes. What is the median of those employed, such as 25 percent? Come on. What happened?” he said in an interview.
Critics of the corporate tax hike argue that big businesses still pay billions in other types of taxes besides income taxes.
The views of Taylor and Jean-Michel Doussos on the tax system are held by the majority of Americans, according to various public opinion polls.
Fifty-two percent of Americans believe the government should “redistribute wealth by heavily taxing the rich,” according to a poll published by Gallup in August, while 47 percent felt the opposite. Before the financial crisis of 2008, those preferences were ignored, with many Americans disapproving of the idea of redistributing wealth to the rich with taxes rather than approval.
A 2020 Reuters/Ipsos poll found that nearly two-thirds of respondents believe “the wealthy should contribute more of their total wealth each year to support public programs.” Support for that position is stronger among Democrats, at 77 percent, but 53 percent of Republicans also stand behind it.
The difference between how workers are taxed and wages and how profits and businesses are taxed has been called a “two-tiered tax system” by other members of the Biden administration, including Treasury Secretary Janet Yellen.
“At the core of the problem is a difference in the ways the types of income are reported to the IRS: bad sources of income often evade scrutiny while federal wages and benefits are often subject to almost complete compliance. This two-level tax system is unfair and deprives the country of resources to fund its main priorities,” he said in 2021.
Tom Ankner, a librarian in Newark, New Jersey, said he appreciated hearing the message in Biden’s speech that the economy can treat people more fairly.
“I like the fact that he took that line,” Ankner told The Hill. “Because that’s where I want to be [to see changes]. That is the direction I would like to see the country go. “
