Exclusive: Read Anita Dunn’s memo to Democrats
With help from Allie Bice and Daniel Payne
Welcome to POLITICO’s 2021 Transition Playbook, your guide to the first 100 days of the Biden administration
The Biden White House has a message for congressional Democrats and allies: eating the rich is popular — so act like it.
In a memo exclusively obtained by Transition Playbook that is set to be sent to fellow Democrats this evening, senior adviser ANITA DUNN argues that “we need to restore basic fairness to the tax code, and in the process generate revenues to invest in our competitiveness, children, and economy. And, the American people agree.”
The memo — entitled “The American People Support President Biden’s Tax Proposals” — spotlights several recent polls showing majority support for raising capital gain taxes on those who make over $1 million per year and for raising corporate taxes. President JOE BIDEN has already called for raising the corporate tax rate to 28 percent to help pay for his infrastructure package; he’s expected to pitch raising capital gains taxes on Wednesday night in his first joint address to Congress.
“If critics want to turn this into a debate over taxing the wealthy and big corporations to pay for investments in the middle class, we’re happy to have that fight,” said one White House official. “The American public is squarely on our side – it’s not even close.”
A fight over raising corporate taxes could put some Republicans in an awkward spot as many GOP leaders are trying to rebrand as the “working class” party and build on the inroads DONALD TRUMP made with those voters. They’ve also been threatening corporations for weighing in on cultural issues and voting rights legislation in several states. But while congressional Republicans are likely united in their opposition to Biden raising any taxes, there are some divisions about how much the party should focus on the issue as they try to fight Biden’s proposals.
“I don’t think you will see Republicans advocate for higher taxes but the enthusiasm to oppose them has waned considerably in recent years,” said a senior aide to a high-ranking GOP House member. “Why should Republicans continue to do the bidding of corporations when they don’t have the best interest of voters in mind?”
That echoes Biden’s pollster JOHN ANZALONE who has also been urging Democrats to go on the offensive when it comes to talking tax hikes, as Axios reported.
It’s not clear how much Biden himself will lean into the fight during his speech. And while Dunn’s memo frames taxing the wealthy as a political winner, there appear to be some places on that front where the White House won’t go. The president will not call for raising the estate tax to pay for his infrastructure and care initiatives, as first reported by Bloomberg and confirmed by Transition Playbook.
Biden ran on raising taxes, but he shied away from some of the more aggressive rhetoric of BERNIE SANDERS (who introduced a tax bill with the acronym of “STOP BEZOS”) or ELIZABETH WARREN who sold “Billionaire Tears” mugs.
While that line got all the press, it was Biden’s next sentence that was more revealing: “When you have income inequality as large as we have in the United States today, it brews and ferments political discord and basic revolution.” That focus carried over into the transition with longtime Biden aide TED KAUFMAN making a commitment to fighting income equality something of a litmus test for members of the economic team.
The Biden team also looks poised to keep its tax plans focused on the ultra-wealthy. Dunn argued that Americans are against hiking the gas tax to pay for infrastructure, citing a recent poll conducted by Data for Progress and Invest in America that found 59 percent of voters (including 68 percent of Republicans) “oppose gas taxes to fund increased investment.” (The gas tax, of course, affects millions of Americans making less than $400,000 a year, whom Biden has pledged not to raise taxes on.)
Trade groups such as the U.S. Chamber of Commerce and the American Trucking Associations have lobbied in favor of raising the gas tax as a way to pay for the infrastructure spending.
The Chamber has argued that while voters might say they back raising the corporate tax rate, they don’t realize that corporations might pass increased costs onto them.
“When you tell somebody, ‘Hey, would you want corporations to pay for infrastructure?’ everyone says yes,” said ED MORTIMER, the Chamber’s vice president for transportation and infrastructure.
But it’s the customer “that is going to end up paying for any potential corporate tax increase,” he added.
The bipartisan Problem Solvers Caucus also pitched raising the gas tax, which isn’t indexed to inflation and hasn’t been hiked since 1993, in a report on Friday. But Rep. JOSH GOTTHEIMER (D-N.J.), the group’s Democratic co-chair, immediately disavowed the recommendation.
“Personally, I’m against raising the federal gas tax,” he tweeted.
The White House has also thrown cold water on the idea, due to the tax being regressive. “We don’t believe that the cost [of the infrastructure bill] should be on the backs of the American people,” White House press secretary JEN PSAKI told reporters earlier this month. “We believe that corporations should be able to bear the brunt for investing in America’s workers.”
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He delivered remarks on the administration’s handling of the pandemic on the North Lawn.
Before the president’s remarks, JEFF ZIENTS briefly came over to speak to technicians.
She participated in a virtual roundtable event with representatives from Guatemalan community-based organizations in the South Court Auditorium. Her spokesperson, SYMONE SANDERS and the first lady’s chief of staff, JULISSA REYNOSO PANTALEÓN, were also in attendance.
With the Center for Presidential Transition
Since we’re on the heels of the 2021 Academy Awards — we’ve got an award show-related question for today: Who was the first president to speak at an Academy Awards ceremony?
(Answer is at the bottom.)
WHITE HOUSE ANNOUNCES DEFENSE NOMINEES — Biden announced the nomination of FRANK KENDALL, the Pentagon’s chief weapons buyer in the Obama administration, to serve as Air Force secretary, LARA SELIGMAN reports. Kendall is a longtime official in the defense world, and would bring decades of experience overseeing the development of new weapon systems and attempting to reform defense contracting to the Air Force.
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MADE IN AMERICA — DOUG PALMER reports that Biden is appointing CELESTE DRAKE, one of the labor community’s most experienced trade specialists, as the first “Made in America” director, a position within the White House budget office.
Biden created the post in January, when he signed an executive order aimed at toughening requirements for federal agencies to “Buy American” as part of the hundreds of billion of dollars worth of purchases that they make each year.
Drake deregistered as a lobbyist for the Directors Guild of America last month, so she’ll need a waiver to work on any issue areas she lobbied on, per Biden’s ethics rules.
She is at least the third recently registered lobbyist Biden has hired, along with ALETHEA PREDEOUX, who lobbied for the American Federation of Government Employees, and CHARANYA KRISHNASWAMI, who lobbied for Amnesty International. Both received ethics waivers.
FLOOD OF NOMINATIONS CONTINUES: The White House also announced the nomination of JAVIER GUZMAN to be assistant attorney general for the civil division, one of the top unfilled positions at the Justice Department. Guzman, a Justice Department veteran, is now Harvard’s deputy general…