Kai Wright: This is the United States of Anxiety, a show about the unfinished business of our history and its grip on our future.
Broadcaster: Most people approaching a year of unemployment benefits will continue to receive money.
Liceny Espaillat: I'm hopeful, I'm positive, but it doesn't stop me from suffering in the meantime.
President Joe Biden: Folks, I'm talking about the folks out there aren't looking for a handout. They just need help.
President Ronald Reagan: The nine most terrifying words in the English language are, "I'm from the government and I'm here to help."
Paul Solman: Why aren't we investing in infrastructure of the kind that made America great in the '40s, '50s, '60s.
Rachel Maddow: The story of Flint was really the story of giving up on democracy.
Ron Swanson (Parks & Recreation): I've been quite open about this around the office. I don't want this parks department to build any parks because I don't believe in government.
Kai: Welcome to the show, I'm Kai Wright. There's maybe one political consensus that has held left right and center my whole lifetime. Government is the worst. It wasn't always so. If you go back to the '50s and '60s with Eisenhower and Kennedy and Johnson, huge majorities of people said they trusted government, 70% and 80% of the country. That trust evaporated in the Nixon years and never really came back and for the past couple of decades, it's been stuck at historic lows. Less than 20% of people saying they trust the government to do the right thing. If you look closer, there's something more complicated buried in those numbers.
Something that seems to be shifting right now. We're going to talk about that shift and what's behind it all this hour. Before we get into the history and policy of it, though, I want to introduce you to somebody. President Obama, you might remember liked to talk about the letters he received from people and how he kept himself centered in the job by reading these letters from around the country. Toward the end of his presidency, he got a letter from an eight-year-old living in Flint, Michigan, who was on her way to Washington, DC. She was an activist and she was traveling with a bunch of other activists to a congressional hearing about Flint's horrifying water crisis.
Mari Copeny: Flint, Michigan has been without clean water since April 24, 2014. This is 697 days, 8,657 kids under age six were exposed to lead.
Kai: This little girl wrote a letter to President Obama requesting a meeting. She wrote, "My mom said chances are you will be too busy with more important things. There is a lot of people coming on these buses and even just a meeting from you and your wife would really lift people's spirits." Obama did her one better.
Obama: I would've been happy to see Mari in Washington, but when something this happens, a young girl shouldn't have to go to Washington to be heard. I thought her President should come to Flint to meet with her.
Kai: As we thought about the role of government this week and the ways in which public opinion about government has developed over the years, we thought about this little girl who is still an activist and still demanding her government serve her in her community and we figured she's a good place to start. I'm joined now by Mari Copeny, also known as Little Miss Flint. Though she's not quite so little anymore. Mari, thanks for coming on the show.
Mari: You're welcome.
Kai: As I said, you wrote a letter to President Obama. Most kids are not sending letters to the president of United States. I certainly wasn't. Well, I still haven't. I'm 47 years old. I've never sent a letter to the president of the United States. What made you do that?
Mari: Flint, Michigan was going through a water crisis and everybody here was super sad and stuff. I thought, "Hey, maybe if I wrote a letter to President Obama, maybe he will respond and see what his opinions on the water crisis here is and stuff like that." Then, I sent a letter to him, cool, cool, cool. Then a few months passed by, my mom gets a call from the White House, from a secret number. She was like, "This is a prank." They're like, "No, President Obama wants to write her back, but not only does he want to write her back, but he also wants to meet her in person." And back then I was just in my little third-grade classroom, doing my little math packet. Just chilling and having fun.
And all of a sudden, I see my mom come through the door. I was like, "Oh. So obviously she’s going to pick me up or come to check on me.” No! A whole bunch of camera people come in behind her and I was like, "Wait, wait, what's going on?" My teacher was like, "What? What?" Then she came over to my desk thingy and she was like, "President Obama wants to meet you in person." I was like, "What?" And all my friends are like, "Oh my God, Mari!" That day was super fun. It was super fun.
Kai: It sounds remarkable. I wonder what you-- Like you said, you were third grade, eight years old. What did eight-year-old Mari believe about government and politicians? Did you think government was a good thing or a bad thing? Somebody who could help you or somebody who could hurt you?
Mari: I’m almost positive I would have thought that a government would be good and would help because sometimes they do help, but at the same time they kind of don't help. It's a mixture between a good and bad.
Kai: Right. And it's up to us to make it more good.
Kai: What do you think about that? What do you think about government now?
Mari: The government is weird. Honestly, it's weird today because they're doing so little to help people.
Kai: What role do you want government to play in Flint and in your life in Flint? If they were being good, what would they be doing?
Mari: If they were good, they would probably be actually helping people and I haven't really seen them talk about it as much as they talk about other things like coronavirus and stuff that, but both are two really big important things, but I feel like they should bring awareness to both topics and just educate people more about it.
Kai: Do you think President Obama's visit helped what was happening in Flint?
Mari: Yes, it actually did help. He had gave a speech to people and everybody's hopes was raised. And yeah.
Kai: This was all back in 2016, you have remained an activist ever since then. What have you been up to in Flint since President Obama came in 2016?
Mari: So I've been up to a lot of things. I used to do these water drives. I've given out over a million bottles of water, but I heard that people were not taking the bottled water responsibly and was littering and that was bad for the environment. So I partnered with this team called Hydroviv and I got my very own water filter. It's way safer than water bottles and the water bottles are safe, but the plastic isn't. But like, my water filter, it's good for the environment too! Oh, yeah, I just did a Easter egg hunt, the day before the Easter. We had a whole bunch of baskets that we had packed and stuff like that to give out to the kids. There was animals, there was a pony and a horse and some duckies and some bunnies. Oh, yeah, and we had the Easter bunny there too.
Kai: The idea was you were just trying to build community and raise in spirits.
Kai: How did you learn to do all this? At eight years old writing the president. Now at 13, still doing all of this community, organizing. Who puts you up to this? Who told you, "You know what you can do? You can be a leader."
Mari: Activism isn't anything new to me. It all actually started when I was three. Yes, it all started when I was three.
Mari: Yes, and it all started with my grandmother and we would go to the food banks and pass out food to homeless people and just necessities that they need. Then, I kept on doing that until I got into doing actual activism stuff like going out and protesting and doing matches and doing these water drives and doing all that.
Kai: It just kept growing, three years old. Well, one of the things you tell people is to vote for you for president in 2044. Tell me about that, why president? You want to be president?
Mari: Yes, I want to be president in 2044 because I, in fact, want to change the world and make the world a better place. There would be no environmental racism, no racism in general, everybody gets clean water. Most feminine products would be free. Things in general, I will make the world so much better than it is today.
Kai: You got my vote. I wish I could vote for you now, but I'll wait until 2044.
Thank you so much for joining us and for the work you've been doing and keeping us honest as adults.
Mari: You're welcome.
Kai: That was 13-year old Mari Copeny, also known as Little Miss Flint. And I should say Obama's visit to Flint also came with $100 million in federal aid, but still what Mari and her neighbors in Flint have experienced is exactly the thing that helps erode trust in government. A lot of people have ample lived experience with its willful failures, but the way Mari and her neighbors responded is also notable. Not throwing up their hands and turning instead to the private sector or to philanthropy, but saying, "Hey, fix the government and make it serve us."
Yes, huge majorities of people still distrust the federal government, but according to Pew Research Center, more and more people nonetheless say it ought to be doing more, or put in other way, that there's a version of government they could trust. Six out of 10 people now say that. That is part of an upward trend line that Pew has tracked over the past five years or so. It's a trend that's largely owing to a change in thinking among people who say they're Democrats, but it's also clearly visible among Republicans. It's bipartisan.
What's going on? How did Americans come to think so poorly of government in the first place and why is it changing now? Coming up, I'll ask these questions of writer and thinker, Anand Giridharadas. He's the author of the best-selling book Winners Take All: The Elite Charade of Changing the World, and a full-throated proponent of big activist government, who says Joe Biden has become the unlikely harbinger of a new era, one in which government is cool. That's next. Stay with us.
Welcome back. This is the United States of anxiety. I'm Kai Wright. It's become fashionable to speculate over whether Joe Biden will become the next FDR or LBJ. He's certainly not afraid of using the word trillions when making spending proposals and thus far that has made him popular. Very few people would have predicted either of these two facts a year ago, I certainly would not. I had a conversation with writer Anand Giridharadas about this very thing. He's the author of a much-discussed 2018 book Winners Take All, which challenges the idea that the country's biggest problems are best solved by turning to the leadership of the super-wealthy as philanthropists and innovators, or as presidents and mayors for that matter.
In a recent issue of his newsletter, Anand to put the first few months of Biden's presidency in context with the history of mainstream political thought about government generally, he drew a line from 1981 when Ronald Reagan walked into the White House to this moment. I sat down with him last week to talk through that history. Joe Biden took the oath of office exactly 40 years after Ronald Reagan. As you quote, Reagan, in his 1981 inaugural address, he says, "In the present crisis, government is not the solution to our problem, government is the problem." Can you first off just give us the 101 of what Reagan's political aim was there in 1981? What was the shift in political culture that he ultimately did achieve?
Anand Giridharadas: In a way, you could look at that statement as the founding charter or founding text of this 40-year era. The way we think about phrases like "We the people," or "We hold these truths to be self-evident," these phrases that announce an era. That was the founding sentence of this time. It was both a seed, therefore, of what was to come, but I think it's first important to talk about it as a culmination, as a flowering of some groundwork that had been laid. In the 70s, there was this feeling by wealthy people, business elites, and others, that they were actually losing the country.
The hippies were everywhere, the jeans were wide on the bottom and tight on top. The anti-war protests were strong, the revolutionary spirit was manifested in a whole bunch of different ways in American public life and they were scared. This story has been told by Jane Mayer in Dark Money, and Kurt Anderson in Evil Geniuses and other books, but they got organized. There was a famous thing called the Powell memo, where they decided to sketch a plan for how out of power right, and business right, in particular, could not just have money, which they already had, but really grab power.
They made a plan and their plan was to translate money, reinvest some of the proceeds of economic inequality in yanking political inequality wider open. When Reagan took the oath of office, he in some ways is to be understood as the figurehead, the culmination of a project to take back power, really, with business interests as the protagonist and him as the servant leader of it. It launched an era, it didn't just launch a presidency the presidency was the stuff he passed in that first year, that famous tax cuts, budget cuts, reining in spending, slashing a bunch of programs, the political project of using words like welfare queens and things to malign not only government, but the people who benefit from government help.
The era became an era as opposed to just a two-term presidency because he ended up being one of those presidents like an FDR, who sets the terms of the debate for years after the presidency. For years after the presidency, if there was not a consensus on government is evil, there was a kind of consensus, an 80% consensus in American life that government was regrettable.
I interviewed Bill Clinton for my book Winners Take All and Bill Clinton said to me, "Good Democratic president, it's always better if you can solve a problem in the private sector." That's what that Reagan ideology looked like when it became such a consensus that folks on the left had to embrace it. Barack Obama comes to office, community organizer from Chicago very much outside of this moneyed system. One of the first new offices he creates in his White House, the Office of Social Innovation, and it says on its website that top-down programs from Washington aren't how you make change anymore.
What is happening now with Joe Biden is remarkable not because he has gone all the way on policy the way those of us who advocate for real thoroughgoing change in American life would necessarily want, but because he seems to be turning this fundamental ship of the consensus, the philosophical consensus, away from the notion of government being bad, even regrettable, and making actually a surprisingly muscular case for government being a redemptive force that can make people's lives better, and uniquely do so.
Kai: Where was he in 1981? You point out that he was present, he was a young senator, at the time, how did Joe Biden respond to this shift during the Reagan era?
Anand: This is what's so remarkable. Bill Clinton wasn't in Congress at that time, Barack Obama wasn't in Congress at that time, Joe Biden voted for a lot of that stuff, voted for that historic and catastrophic 1981 package. That's what makes this so interesting to me. I think it goes to this question of what kind of a leader Joe Biden is, and people have different tastes on this. You might admire the kind of public leader who is three miles ahead of public opinion. That's a Bernie Sanders or who's just in a way doesn't care if you're with him. There's no, "Are you with me thing."
Kai: The point is I'm trying to push it?
Anand: "I'm out here. If you're with me, fantastic. If you're not, fantastic. I'm doing a thing." There's other types of figures who we often tend to malign as they put their finger in the wind, everything's poll-tested, and focus-grouped. We rightly may be criticized the fact that they don't have these deep abiding convictions, but what is good about those types of politicians is they are very sensitive to what is possible, what the public is ready for. The truth is in a country like the United States, it's not just powerful interests that are obstructing some of these policies, the public is often not there.
What it becomes really important to understand about Joe Biden, I think is that he is someone who historically is very much on that ladder politician, three millimeters ahead of public opinion not three miles, but now thanks not to his religious conversion, but I think to a dramatic shift in public opinion, away from this Reagan consensus because of all the devastation that wrought in people's lives. To his credit, I think he's been willing to change his mind in a way that a lot of people in public life actually don't.
Kai: Part of what you are talking about in your broader work beyond Joe Biden, though, it really feels like it stretches past politicians and presidential leadership. I want to get into that a little bit because, at some point, the anti-government idea came together with a belief in the heroism of individual wealth as a solution. Where did that come into the conversation?
Anand: I think about it as a set of phases. This is oversimplifying it slightly. Think about going back to that Reagan revolution. Phase one is like business people prosper, government is pulled back, government starts genuinely doing less stuff to help people redistributes less, taxes less. That's phase one. Phase two starts to happen. People start to feel one year, two year, three years, four years, a generation of the effects of this kind of policy.
People start to die of things that are preventable. People start to realize that the American dream though very real is something that only exists in Europe, people start to realize that mobility is no longer happening in this country for most people. People start to realize that the college and student debt system is essentially this kind of indentured livelihood that people will never be able to make whole on. People begin to wake up to these problems.
Now, the obvious thing that's going to happen in phase two that might get you into phase three is revolt. People are going to get mad. People are going to realize that you as the plutocrats, lobbied to cut the spending, you lobbied to cut your own taxes, you fought for the 400 wealthiest people in America to be taxed at a lower effective rate than many, many, many other Americans. If they realize that, it could be game over for you. At that moment, it is crucial to elaborate a defense that is not just, "Inequality is good, you don't know what you're talking about."
At this point, people feel what they're feeling. They experiencing what they're experiencing. At that point, it becomes very helpful if you can do what I tried to describe in Winners Take All, which is to concoct a story that not only is this kind of manic hyper-capitalism that you fought for, not only is it good and justified, but in fact, it is required for these massive fortunes to be amassed so that these people can turn around and do philanthropy, so that they can turn around and donate to public radio, and we can have things to listen to.
So that they can turn around and donate to universities, so people have somewhere to go to school, so that they can turn around and create social venture funds which will donate to 30 Black women entrepreneurs, or do some little token project while maintaining a system in which most women and most Black people and most Americans, in general, can't make the fullest use of their talent. It becomes crucial as a form of wealth, defense, and class defense to tell this story of being saviors from the problem that they are. They have to tell this story of being firefighters, even though in fact, they are the arsonist who set the blaze.
Kai: This part of your argument people have trouble with it because there's a way in which if the argument is, "Listen, we don't need anything from these rich people. We don't need any things from these corporations." Isn't that giving them a pass-
Anand: Not at all.
Kai: -on not doing something with the wealth they've accumulated?
Anand: I want a lot of that wealth to be taken away through public policy. I don't want them to be voluntarily allocating money on decisions about the public good. What I am talking about in my work is not all problems. I'm talking about our biggest shared problems. If your phone screen cracks, that's your problem. It's a private problem, and that's generally amenable to private solutions, but when you think about a problem like how do we empower women in this society to play the full range of roles that they're able to play without obstruction?
There's no personal private solutions to that problem. When you think about how do you deal with 400 years of plunder of African-Americans and the racial wealth gap and all the related problems, there's just no personal solutions that, you can't rise up out of that, you can't lean in your way out of that. It is only politics and policy that can redress a problem like that. When you think about an education system that would be worthy of this century, that would actually equip people for the battle that they're entering when they turn 18 and go out into the world, there's no private solutions to it, there's no personal solutions to it, there's only policy.
What these folks are doing, I'm not giving them a pass to say, "Don't get involved." I am telling them that actually, instead of asking the question, "What can I do?" Ask the question, "What have you been doing? What are you doing right now?" Because chances are those same people are very much involved in these questions on the wrong side of things. Their companies are very likely lobbying against progress. When you say, "Give them a pass," stopping being part of a problem is very much an action. What I don't want them to do is rich-splain the solutions to the public because that's undemocratic.
There's a very clear thing most of them can do, which is stop busting unions, stop lobbying for bottle service public policy that benefits you and your friends and hurts most people, stop running the society like a casino where you are the always the one who wins. By the way, there are forms of giving, philanthropic giving. I'm not an absolutist on this that tend in a direction of system change, and most forms of this kind of giving the people do, do not.
If you're funding as some philanthropists have, Black Lives Matter organizers. I think you're doing something that is way closer to system change and actually working through a democratic process, then if you're funding some program to give 30 entrepreneurs of color a grant, and then advertising it everywhere. Even if you are in that class of people that has money to give, there are decisions you can make about, "Am I giving in ways that tend towards system change or giving in ways that fundamentally about bypassing system change?"
Kai: One of the big shifts that's happened in the public mind lately is this debate over taxes, and taxes for the rich. I just want to hear you think out loud a little bit about what is the reason to tax the rich?
Anand: I would say there's multiple reasons to tax the rich. The most conventional when you hear is the kind of chip in argument. I think Bernie Sanders and Elizabeth Warren, when talking about their wealth taxes, they were making a fair share/chip in argument. I'm compelled by that argument. The problem with that argument is it is fundamentally not saying the following. It is not remotely claiming that big fortunes simply by being big are suffocating to democracy, that they are intrinsically dangerous just standing over there on the corner. That's not the theory or the practice, and it's reflected in the policy if the wealth tax is 2% or 3% a year, and these people are making 20% returns on investment every year.
Kai: It's not really a redistribution.
Anand: No. The second set of arguments then has to do with the intrinsic danger of people with such fortunes, existing with such fortunes in our society. I think it's important to start making that case as well, which is there is a case for taxing these fortunes simply for the goal of making them smaller. That we are safer, our democracy can breathe better when they don't have as much money.
Even if you were to take the money and dump it into the Atlantic Ocean under this theory, and no one were to get productive use of it, that we might be better off not having someone who can buy public policy that easily. Not having someone who can scrub their reputation after harming people that easily. I think there's a lot to that argument.
Kai: I don't want to be basic here, but a lot of people, a lot of Americans, a lot of New Yorkers aspire to be rich. When we talk about, "Oh, well, wealthy people shouldn't exist." Wealth shouldn't exist. I think a lot of people hear it and recoil and say, "Oh, well, that means I can't get wealthy." I guess just in a really basic way, I want to prompt you to respond to that motion?
Anand: I think that's very real. I think you're very right to raise it. I think it's actually one of the great obstacles to this struggle. I do not think some of the progressive politicians who have tried to advocate in these lines, I don't think they've done a very good job of addressing the issue you raised. By the way, the issue you raised is often particularly pronounced in communities of color. It's true for women.
There's people who never got led into the party, then they finally got led into the party and suddenly it's like, "Oh, we're shutting down this party." That feels unfair. I think that has to be addressed, and I think it has not been addressed. I'd say a couple of things. First of all, I'm almost completely certain that no one listening to this on WNYC who does not have a $1 billion right now is going to have a $1 billion by the time you die.
Kai: It's a hard truth, but there it is.
Anand: There's a couple of statistical exceptions and I will just individually phone up those people and apologize to them for being wrong, which I can do because there's only going to be like one or two of them at most. It's not because you're listening to this show, but it's a matter of reality, that like, "You're not going to be a billionaire." I think it's worth making clear to people how big a $1 billion is, and how meaningfully different it is from a $1 million or $10 million or a $100 million, or how big $200 billion is.
These kind of fortunes we're starting to see with Zuckerberg and Bezos and others. No one is saying if you're a store owner in Queens, who has one store and wants three. This set of ideas should not be alienating you, and if it is, it's not your fault, it's the fault of the people championing it. Those of us who want a fair or equitable America, we should not be turning away the guy with one store who wants three, which may make him make a $1 million a year if he has those three stores.
We should tax him in a way that makes life good for all people in this country, but I don't think we should convey disrespect to someone like that or a sense that their aspirations, maybe they're an immigrant who came here, proud to have a business. In no way should the progressive course be turning away someone like that. I think someone like that should also realize that what progress fighting for as a world that's a lot better for them in a few ways. Let's stick with the guy with one store in Queens who wants three, "What's it like competing with Amazon, sir? Are you enjoying competing with Amazon?"
Anand: Because you're not, Amazon is beating you at whatever they're in that you're also in. "Would you like some help with that?" When it comes to something like universal health care, how expensive is it for that business owner in Queens with the one store to provide healthcare for employees? In so many ways we have spun ourselves into being this kind of society that imposes so many intangible and tangible costs on someone like that. I think it's going to be really important to marry the language of social justice with the language of aspiration. I don't think they're mutually exclusive. There has been a decisive shift in the American conversation.
I think people are so much less likely today to believe the story that leaving rich people alone to do what they want to do, to have their yachts and save us too, is the way to go. You are seeing the fruit of that. I often push my fellow progressives on this, that the proof of winning is not only when people like you win, it's when people not like you start talking like you. That's when you're really winning.
The fact that Joe Biden sounds the way he does now, has an infrastructure plan in the trillions that is predicated on corporate tax rates and fixing systemic racism and climate, that he did a rescue plan also in the trillions with the T. The ultimate winning is winning so big that even your foes are talking in your language and sound a little bit like you.
Kai: Anand Giridharadas is the author of the 2018 book, Winners Take All: The Elite Charade of Changing the World, and a former columnist for the New York Times. You can read him these days by subscribing to his newsletter, The Ink. There's a link in the show notes for this episode if you want to check it out. Thanks for joining us.
Anand: Thank you so much for having me.
Kai: Up next, the debate over texting the rich is no longer a theoretical one in New York state. It's about to happen. It's part of a budget deal that's being received as an historic victory for progressive activists and legislators. We'll talk with one of the state lawmakers who crafted that budget and take your calls about it. I'm Kai Wright, this is the United States of Anxiety. We'll be right back.
Thinking as we're talking about taxing the rich in this week's show, a parallel to that conversation is the racial wealth gap that exists in America. A great follow-up listen to this episode is a story we told about a small group of Black families in South Bend, Indiana. Back in the spring of 1950, hatched a plan to build a neighborhood, a place where they were not welcome.
Today, their children and grandchildren wrestle with what to do with that neighborhood because the value of the homes they created does not match the work it took to put them there. The episode is called a Secret Meeting in South Bend. You can find a link to it in the show notes for this episode. Just a reminder to always check those show notes for recommended pairings for listening with each of our shows. Thanks. I hope you enjoy.
Welcome back. This is the United States of Anxiety, I'm Kai Wright. The era of big activist government here in New York, at least, arguably came roaring back last week when the state legislature struck a budget deal with Governor Andrew Cuomo, that raises taxes on the wealthiest New Yorkers and spends $212 billion on stuff ranging from rent relief, to school aid, to stimulus payments for undocumented workers who were left out of the federal program.
Just to lay down a couple of facts about the new taxes, it creates two new brackets, one for those making over $5 million a year. One for those making over $25 million a year capping out at 10.5%. It also raises taxes for those making over a $1 million a year by just under 1%. This is expected to bring in about $4 billion in new revenue according to the New York times, though, I have seen a few different numbers on that.
I'm joined now by one of the state lawmakers who crafted that budget state, Senator Liz Krueger, who is chair of the Senate finance committee and a member of the Working Families Party, which has been advocating for some form of a wealth tax for many years. Senator Krueger, thanks for joining us.
Senator Liz Krueger: My pleasure.
Anand: New York listeners, if you have questions about the budget and how it might affect you or your community, call us up 646-435-7280, that's 646-435-7280. I'm also just curious what people think about taxing the rich here in New York. We've been talking about this all hour about these two related ideas, an activist government that can solve problems and higher taxes on the most wealthy residents to help pay for it. We're about to try both things here in New York. What do you think, are you worried? Are you excited? How might it affect you? Maybe we got some millionaires listening out there. 646-435-7280 that's 646-435-7280 or tweet us using the #USofAnxiety.
Senator, the first thing that comes up in any conversation about higher taxes, whether it's state and local or on the federal level is that wealthy people will leave. Your own district probably includes a lot of those people. You represent the upper East side in part, which, of course, has a very diverse range of people, but does include a meaningful number of higher-income residents. What about this core critique? Are you worried that wealthy New Yorkers will leave?
Senator Krueger: No, I'm actually not worried they'll leave because the truth is the increase we applied through the personal income tax system that people are talking about is taxing the rich is a relatively small increase on these population. One, I just want to make clear because some people are misstating. If you don't earn at least a $1 million a year as a single or $2 million as a couple, there's no tax increase for you.
Actually, in other parts of the state budget, we continue to tax break for you, and we created a circuit breaker for people with disproportionately high property taxes. We are in fact, taxing people of income levels over a $1 million a year. Even then, it's not a statistically significant amount for most of the people. I'm not saying that everybody has an account, how much they have, and how much they're being taxed, but let's be honest if you're making between $10 and $25 million a year, which is about 1,100 filers, many of whom do live in my district, and so the taxable income on average is $17 million.
If you get a $255,000 annual increase, that is not actually going to change your lifestyle, it probably won't change any decisions you make about how you live your life. It probably won't even make any changes in how you make your investments or plan for your taxes. If you are remembering what happened in 2018 when Trump tax reductions kicked in for the rich, you might even realize what we are doing by increasing your taxes isn't anything compared to the amount of money you saved during the Trump administration tax reductions for the rich.
I was really finding your previous speaker fascinating because what he's calling for is something so much more dramatic than what we did this year, and yet some of us are getting attacked as if we did something as extreme as that. I do think wealth taxes are various serious things we need to confront in this country, but I also think you need to probably deal with them mostly on the national level because I think that the level of taxation that needs to kick in on the top 1% of Americans, if it's done at the state and local level will likely result in the picking up and saying, "I'm out of here from this state."
If it's national policy, are they really going to choose to leave the United States of America? Are they going to be willing to give up their citizenship at some point? That's a much harder thing for anyone to imagine doing. I'm very excited about what I'm hearing coming out of the Biden administration in Washington because I do think much more needs to be done, but I'm of the belief, don't leave states hanging out there, do it at the federal level.
Kai: I'm talking with State Senator Liz Krueger about New York's new budget deal. The inclusion both of a lot of new spending and of an increase in taxes on the most wealthy New Yorkers as Senator points out the middle-class tax budget or a middle-class tax cut that was passed in 2016 remains in place. This is for people making over a $1 million. I think we have a first caller, John, from Stanford, Connecticut. John, welcome to the show.
John: Thank you very much. I had a question regarding the competition between states and even if it doesn't actually make that big of imprint on wealthy New Yorkers bottom line, what's the keep them from getting up and moving to different states, and what could the federal government do on a national level to try to prevent that kind of competition?
Senator Krueger: John, I do think that most of the smart tax policy, particularly if we're going to try to get ourselves out of this wealth crisis that we have, and I sincerely believe that we have a wealth and inequality crisis that is risking our democracy and that I do believe the answers blend more towards the national level.
It is true there are some number of people who pick up and move to lower-tax states when they see their taxes going up. In New York, and Connecticut, and New Jersey, always seem to have this almost range war going on where we don't want any of our taxes to be too changed, and if you jump somebody, they'll threaten to move to Connecticut, or they'll threaten to move to New Jersey, but at the end of the day, they don't really win very much that way. We all lose because if you're factoring in moving a business or company just for our marginal tax rate, it's bad public policy, to be honest. I would prefer national policies, and then fair distribution back to states as we're adjusting a fair system of federal taxation.
Kai: Senator, I also want to ask you, there's the cost-benefit analysis of whether rich people would leave or not that seems to dominate this debate when it comes up, but there's also just a basic philosophical question that I wonder if you can address or whether it is part of the conversation at all.
You said in a speech on the Senate floor last week that the new taxes only impact about 50,000 New Yorkers, that's according to state comptroller. We're not talking about a lot of people, but that's either a good thing or a horribly unfair thing depending on what you-- It's not so much a fiscal question it seems to me as it is a philosophical question about who should be contributing what in our society. Does that conversation take place in Albany?
Senator Krueger: We're starting to see that conversation take place. To be honest, I think we're just at the beginning of looking in a hard way at our tax system and how inequitable it is. It's really not the question, "How come we're only taxing 50,000 of the wealthiest New Yorkers?" It's really the question, "How much less of their total income are they paying in taxes than people much poorer than them." What we find is that they are not paying a fair share, their tax to wealth ratio, compared to almost any other category of Americans. It's not just true, it's become radically more true in a very short period of time.
In 2018, the wealth of the average American ran about 8.4 times the wealth of the average American in 1980, but the wealth of the average top 1% of Americans in 2018 ran 35 times more than the average even the 1% in 1980. During this pandemic year, we have seen the highest jump in overall wealth growth among the top 0.01% of any time in the history of the world. We have a handful of Americans who now basically are the equivalent of states, as far as revenue to themselves.
You know what? It's bad for all of us when that's the storyline, and then the share of taxes they're paying is nothing compared to what their wealth is, and yet can you come along and successfully say, "We're going to charge you 100 times your PIT here in New York State because that would actually translate to equitable taxation on you and how much you've been getting." They wouldn't pick up and leave. we can't do that in the state level. Our problems are on the extremes, the extremes of wealth. Truthfully, those people have the ability to move anywhere because they're already everywhere.
Yes, they have an apartment in my district on the east side of Manhattan, and a house in Florida, and probably one out there in ski country and maybe one in England, and maybe one in Paris. [chuckles] They have lots of property because they have more money than they know what to do with, but the question is, "How can we fairly tax them?" That's why I really do believe most of the answers for our extreme inequality, and our extreme wealth problems in taxes needs to be addressed nationally.
Kai: Let's go to Josh in Manhattan. Josh, welcome to the show.
Josh: Hey, thank you very much for taking my call. I just wanted to say that I'm a huge fan of Anand Giridharadas and I loved your interview. I became exposed to him, he was on the Michael Cohen podcast recently, and I just found it to be so compelling that I marked my calendar for your show. You did a great job. I just want to say I'm a millionaire, I live in Manhattan, and I totally agree with everything that he's saying. I'm totally willing and excited to be taxed more because I feel like we get what we pay for. New York City is a fantastic place to live. We just ought to pay more and we ought to enjoy it. The city needs us, so let's pitch in.
Kai: Well, thank you for that, Josh.
Senator Krueger: Thank you very much, Josh.
Kai: That comment makes me think, we've been talking this hour about the history of the way people think about government, in general, as a solution versus a problem. You've been in the legislature for nearly 20 years and been arguing for government as a solution all those years, what have you seen in terms of the way thinking about the role of government has shifted in New York over that time?
Senator Krueger: I think there's more fundamental disappointment in our government over time, but I also would argue, it's because we've decided to operate under austerity spending for many, many, many years now. When people call me to say how disappointed they are, they don't call and tell me that they're disappointed in programs and services we're offering. They complain they're not enough of them. They complain that they're worse than they were years ago because they've done the math, and they're only getting half of the amount that they were getting in the past.
They're frustrated that we don't have the programs and services we need to make sure we stay the best city and the best state in the world. It's not that they're giving up on government, but they are frustrated. I tell you that when you look at how much we're spending on crucial programs and services, that there's a correlation.
Why is the homeless populations so high? Well, rents kept going up, but we wouldn't provide any reasonable allotment of money to pay the rent through our safety net program. Then when people ended up losing their homes and ending up needing a shelter, we didn't have shelters to provide the short-term assistance while we tried to help them get into their homes.
We spend unbelievable amounts of money to put people in jail year in year out, but the minute we change the criminal justice policies to try not to throw so many people in jail and leave them there, we learned that we can't transfer that money that we no longer need in our prisons to providing job training, and placement and re-entry programs, which are the most effective things that you can do to make sure that somebody is not a recidivist, and end up right back in the criminal justice system.
I think we have been short-sighted. We're short-sighted because we never seem to have enough money. Some of the reasons we never have enough money is because when you look at the reduction in people paying their taxes, it's all on the high-end statistically year after year after year, and it leaves us without the money to meet the basic needs of the vast majority of New Yorkers. Those are real problems and they interconnect between tax policy and expenditure policy.
Kai: Senator, we're going to have to leave it there. Liz Krueger has served in the New York State Legislature since 2002. She's the chair of the Finance Committee. Her district includes much of the East Side of Manhattan. Thanks so much for joining us.
Senator Krueger: Thank you for having me.
Kai: United States of Anxiety is a production of WNYC Studios. Gerard Paul makes the podcast version, Kevin Bristow and Matthew Marando were at the boards for the live show. Our team also includes Carolyn Adams, Emily Botein, Jenny Casas, Karen Frillmann, and Christopher Werth. Our theme music was written by Hannis Brown and performed by the Outer Borough Brass Band.
Veralyn Williams is our executive producer, I am Kai. Wright You can keep in touch with me on Twitter at Kai_Wright. As always, please do join us for the live version the show next Sunday 6:00 PM Eastern. Stream it at wnyc.org or tell your smart speaker to play WNYC. Till then, thanks for listening, and take care of yourselves.
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