Yet again, the rich are winning.

If Sen. Kyrsten Sinema successfully blocks key tax increases at the core of President Biden’s agenda, as she reportedly aims to do, guess who some of the biggest winners will be? The top 1 percent, who have done fabulously well throughout much of the contemporary era.

The Arizona Democrat reportedly opposes raising corporate tax rates and high-end income taxes, a major hurdle as Democrats negotiate a deal on Biden’s multitrillion-dollar social policy bill. How bad is this?

It’s pretty bad. In addition to offsetting the plan’s spending on health care, education, child care and other important public goods, these reforms are critical to rebalancing our badly out-of-whack political economy. That in turn is needed to restore a sense that liberal democracy can deliver amid rising illiberalism and authoritarianism.

According to new reports, Sinema is balking at raising the corporate tax rate, which would mean keeping it at 21 percent after the 2017 GOP tax cut chopped it down from 35 percent. She also reportedly opposes raising the rate on top individual income earners a mere two points, to 39 percent.

In response, Democrats are eyeing other ways to tax corporations and the rich. They include beefed-up IRS enforcement against wealthy tax cheats, joining a global minimum tax deal that would capture revenue from profit-shifting multinationals, and taxes on corporate stock buybacks and on billionaires’ wealth.

Let’s be clear: Those will do a lot of good. But a failure to raise corporate and high-end income rates would fritter away a chance to make major strides toward a fairer economy.

Let’s talk about who would benefit. The standard argument for low corporate tax rates — one that Sinema probably adheres to — is that this results in more socially constructive corporate investment and job creation.

But here the big winners will likely be wealthy stockholders and other holders of capital and well-heeled professionals. Without more detail, precise impacts are elusive, but at my request, Tax Policy Center senior fellow Steven M. Rosenthal sketched out the broad strokes.

The crucial point, Rosenthal notes, is that corporate tax hikes tend to fall immediately on stockholders, who have done extremely well in recent years. So failing to raise corporate tax rates — when combined with failing to raise higher income rates — would end up exempting a large swath of the 1 percent from tax hikes.

“These corporate and individual tax rate hikes would hit shareholders and the highest-income households in America,” Rosenthal tells me.

Here’s the rub: Rather than tax wealthy capital-owners and professionals as a broad class, Democrats’ substitute measures would likely target a much narrower slice of that class while simultaneously netting more from the fabulously, insanely wealthy, Rosenthal says.

Follow the money upward

How much money are we talking about in the reforms Sinema opposes?

The Joint Committee on Taxation analyzed the impact of some of the high-end income tax hikes being considered — including a hike on income taxes for those earning over $400,000 per year and on the capital gains tax, which Sinema also reportedly opposes.

That analysis concluded that those tax hikes would bring in hundreds of billions of dollars in the next decade. Sinema presumably wants much of that to go untouched. Many wealthy people would benefit.

“The individual rate increases would fall on law firms partners, hedge fund managers, private equity investors and other high earning taxpayers,” Rosenthal tells me.

Sinema’s office is not confirming or denying these reports, though she has apparently detailed her objections to the White House. But the reporting does indicate that Democrats are scrambling to reemphasize these alternatives in response to her stance.

So how much ground will these alternatives make up? They would miss a large chunk of those taxpayers.

Beefed up IRS enforcement “might hit some 1 percenters, but not nearly as many,” Rosenthal tells me. Similarly, taxing stock buybacks would target corporate executives and shareholders, which would “collect more corporate taxes, but not nearly as much as a corporate rate increase.”

What about the billionaire wealth tax that Democrats are considering? It would require those with $1 billion in assets or $100 million in annual income to pay annual taxes on assets such as stocks.

But as Rosenthal notes, this would not hit many people at all, mainly “entrepreneurs who founded phenomenally successful companies and are now immensely wealthy.”

‘Overwhelmingly 1 percenters’

Here’s what we’re left with. While a much smaller, stratospherically wealthy class would be targeted, large swath of very wealthy shareholders, owners of capital and rentier-class professional types would emerge untouched: “Investors, capital holders, and high-income professionals,” Rosenthal says. “These are overwhelmingly 1 percenters.”

What’s galling is that the vast imbalance of this moment partly resulted from policy choices. First, there’s that GOP cut in corporate tax rates. As Jonathan Chait notes, Sinema voted against this, and since then, it has not produced promised benefits for society or the working class, so why wouldn’t Sinema want to undo it now?

More broadly, this 1 percent class has been enriched by policy and structural market changes that have channeled income, wealth and rents upward for decades. By exposing profound injustices in our economy — from our reliance on poorly paid essential workers facing great personal danger to the precarity of millions in a low-wage economy riddled with gaping holes in the welfare state — the pandemic seemingly created a confluence of conditions for a deep rebalancing.

But it looks like that policy choice is not to be. Or at least it will be deeply compromised.