Is Soaking the Rich…Dangerous??

H. Claire Taylor/Flickr

Let our journalists help you make sense of the noise: Subscribe to the Mother Jones Daily newsletter and get a recap of news that matters.


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?

IT'S NOT THAT WE'RE SCREWED WITHOUT TRUMP:

"It's that we're screwed with or without him if we can't show the public that what we do matters for the long term," writes Mother Jones CEO Monika Bauerlein as she kicks off our drive to raise $350,000 in donations from readers by July 17.

This is a big one for us. It's our first time asking for an outpouring of support since screams of FAKE NEWS and so much of what Trump stood for made everything we do so visceral. Like most newsrooms, we face incredibly hard budget realities, and it's unnerving needing to raise big money when traffic is down.

So, as we ask you to consider supporting our team's journalism, we thought we'd slow down and check in about where Mother Jones is and where we're going after the chaotic last several years. This comparatively slow moment is also an urgent one for Mother Jones: You can read more in "Slow News Is Good News," and if you're able to, please support our team's hard-hitting journalism and help us reach our big $350,000 goal with a donation today.

payment methods

IT'S NOT THAT WE'RE SCREWED WITHOUT TRUMP:

"It's that we're screwed with or without him if we can't show the public that what we do matters for the long term," writes Mother Jones CEO Monika Bauerlein as she kicks off our drive to raise $350,000 in donations from readers by July 17.

This is a big one for us. So, as we ask you to consider supporting our team's journalism, we thought we'd slow down and check in about where Mother Jones is and where we're going after the chaotic last several years. This comparatively slow moment is also an urgent one for Mother Jones: You can read more in "Slow News Is Good News," and if you're able to, please support our team's hard-hitting journalism and help us reach our big $350,000 goal with a donation today.

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