Is Soaking the Rich…Dangerous??

H. Claire Taylor/Flickr

For indispensable reporting on the coronavirus crisis, the election, and more, subscribe to the Mother Jones Daily newsletter.


This week, top Democrats—including President Obama and Senate Majority Leader Harry Reid—are locked into a full-court press, calling for a 5.6 percent surtax on millionaires to help pay for the president’s $445 billion jobs bill. In the week that is/was Occupy Wall Street, that sounds like a can’t-miss political winner.

But the Tax Policy Center’s Howard Gleckman says, “Hey, slow down!” While the surtax would raise the average tax bill of millionaires by some $110,000, the fact is that there simply aren’t enough millionaires to actually solve the country’s fiscal problems. “If we are going to get serious about the deficit, people making $200,000 (or even $100,000) have got to help out,” Gleckman suggests.

Gleckman’s chief concern: That the surtax will torpedo any realistic effort at long-term tax reform. Thanks to tax changes in the offing—the expected expiration of the Bush tax cuts, which will spike the top rate to 39.6 and curb a number of exemptions, along with a .9 percent surtax on expensive plans as part of health care reform—the top marginal tax rate for millionaires would climb to nearly 50 percent by 2013. And according to the current schedule, the tax rate on capital gains will also almost double by 2013.

So what’s the problem?

With rates this high, the political pressure to protect tax preferences will be enormous. After all, the rich are going to fight much harder to protect breaks that are worth 50 cents on the dollar than one that is worth only 35 cents. And I stupidly thought the idea was to lower rates and eliminate these subsidies.

Reid wants to be able to say that Republicans blocked a critical jobs bill just to protect their fat-cat millionaire pals. Give him credit for smart politics: By replacing the potpourri of tax increases Obama would have used to pay for his stimulus bill with a simple, easy to understand millionaire tax, the Senate Democratic leader has done a wonderful job clarifying his party’s message.

Gleckman’s complaint here is that the surtax, while good politics, spells trouble for long-term tax policy.

But Gleckman’s operating in a universe where broad-based tax reform—lowering tax rates and curbing deductions—seems somehow politically feasible in the near or even the long term. That’s not really the case: Obama’s jobs bill, with the surtax (and quite possibly without), doesn’t have a shot. So policy-wise, he’s backed into a corner. But if the political play—one that Democrats and Republicans around the country are clamoring for—is the only one you’ve got, then it’s the one you make. With popular opinion still on his side when it comes to making the rich pay their fair share, why not exploit the advantage?

SIX TRUTHS

Reclaiming power from those who abuse it often starts with telling the truth. And in "This Is How Authoritarians Get Defeated," MoJo's Monika Bauerlein unpacks six truths to remember during the homestretch of an election where democracy, truth, and decency are on the line.

Truth #1: The chaos is the point.

Truth #2: Team Reality is bigger than it seems.

Truth #3: Facebook owns this.

Truth #4: When we go to work, we're in the fight.

Truth #5: It's about minority rule.

Truth #6: The only thing that can save us is…us.

Please take a moment to see how all these truths add up, because what happens in the weeks and months ahead will reverberate for at least a generation and we better be prepared.

And if you think journalism like Mother Jones'—that calls it like it is, that will never acquiesce to power, that looks where others don't—can help guide us through this historic, high-stakes moment, and you're able to right now, please help us reach our $350,000 goal by October 31 with a donation today. It's all hands on deck for democracy.

payment methods

SIX TRUTHS

Reclaiming power from those who abuse it often starts with telling the truth. And in "This Is How Authoritarians Get Defeated," MoJo's Monika Bauerlein unpacks six truths to remember during the homestretch of an election where democracy, truth, and decency are on the line.

Truth #1: The chaos is the point.

Truth #2: Team Reality is bigger than it seems.

Truth #3: Facebook owns this.

Truth #4: When we go to work, we're in the fight.

Truth #5: It's about minority rule.

Truth #6: The only thing that can save us is…us.

Please take a moment to see how all these truths add up, because what happens in the weeks and months ahead will reverberate for at least a generation and we better be prepared.

And if you think journalism like Mother Jones'—that calls it like it is, that will never acquiesce to power, that looks where others don't—can help guide us through this historic, high-stakes moment, and you're able to right now, please help us reach our $350,000 goal by October 31 with a donation today. It's all hands on deck for democracy.

payment methods

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate