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While President Obama capitulates to right-wing Republicans by extending tax cuts for the wealthy, some Democrats in Congress are pushing what is not only good policy – but smarter politics.  Bernie Sanders in the Senate and Jan Schakowsky in the House have sponsored legislation to raise taxes on millionaires – rather than restoring the Clinton tax brackets for those making over $250,000.  One Capitol Hill newspaper noted this deviates from where the White House currently stands, as it specifically targets the very rich.  Moreover, it puts Republicans in a far more awkward position – as they are left defending tax cuts for millionaires.  There is a huge difference between rich people making $250,000 a year and those making $2 million a year, and the high upper-income tax brackets we saw in the 1930’s and 1940’s were likewise similarly targeted.  Even in anti-tax states like California, voters have approved tax increases for millionaires – which makes this legislation one of the most hopeful things to come out of Washington lately.

In December, Obama threw progressives under a bus – when he caved to the Senate GOP minority on Bush tax cuts, while admitting at the same time that the American public did not want to see these tax cuts renewed.  But even though Republicans are out of touch with the public will, he was going to do it anyway.  It was truly the lowest point of his Administration.

Vermont Senator Bernie Sanders and Illinois Congresswoman Jan Schakowsky admit they wanted Bush tax cuts for those making over $250,000 to expire.  But having lost that battle in December, they are proposing a “surcharge” for incomes of over one million dollars.  Schakowsky’s bill creates a new tax bracket at 45% for those making $1 to $10 million a year, and 49% for those who make above $10 million. “I certainly don’t see it as a counter to the real and specific debate on the Bush tax cuts,” she said. “The fact is, Republicans don’t want to do anything to take away tax breaks from the richest Americans, and we want to stimulate that debate.”

Of course, it also inoculates Democrats from the predictable Republican attack – every time they support tax increases for the rich – that Democrats “think you are rich.”  The average successful person can see that if they make less than $1 million per year, they are not going to be affected.  At a time of record budget deficits, the Sanders proposal would raise $50 billion in revenue – and Schwakowsky’s measure would bring $75 billion.

Until 1963, the richest Americans paid over 90% of their income in taxes – and it wasn’t until Ronald Reagan that it dipped below 70% – which makes the Sanders-Schakowsky proposals very modest, historically speaking.  But what’s interesting is if you look at who paid those high tax rates, who constituted as “rich” was well above what $250,000 will get you today.  Until 1965, the top tax bracket was for people who made over $400,000 – and during World War II, the 80% tax rates only affected those making over $5 million.

A “millionaire’s tax increase” is politically viable – because the public supports raising taxes, when they understand that they’re not the one who will pay them.  That’s why, for example, a tax on oil company profits always polls very well.  In 2004, California voters passed Proposition 63 by State Senator Darrell Steinberg – a 1% surcharge on incomes of over $1 million, which was specifically targeted at funding mental health services.

Sanders told The Hill the Obama Administration had not expressed interest in his proposal, but he was “not surprised” about that.  “We have not heard the President has indicated that he is interested in coming up with revenue,” he said, “just that he wants to negotiate with Republicans on spending cuts.”  Ironically, Jan Schakowsky was an early Obama supporter in his U.S. Senate bid – back when he was a little-known state senator.

Not only would Obama be turning back on his old friends, but not supporting a modest tax increase on millionaires is suicidal politics.

Paul Hogarth is the Managing Editor of Beyond Chron, San Francisco's Alternative Online Daily, where this piece was first published.

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Comment Preferences

  •  You do know that if this makes it to the (2+ / 0-)
    Recommended by:
    AnnieR, Paul Hogarth

    President's desk, he will sign it, right?

    "Nothing in all the world is more dangerous than sincere ignorance and conscientious stupidity." --M. L. King "You can't fix stupid" --Ron White

    by zenbassoon on Thu Mar 24, 2011 at 12:34:49 PM PDT

  •  Let the wealthy share in the sacrifice! (3+ / 0-)

    "Education is dangerous - Every educated person is a future enemy" Hermann Goering (NRSC?)

    by irate on Thu Mar 24, 2011 at 12:35:29 PM PDT

    •  As Wealth is Shared, So Shall We Share Sacrifice (0+ / 0-)

      I'd just like to make this clean and easy to communicate to all the parties that will need to sign off on this proposal on how to allocate any cuts or increases in tax necessary to bring our economy, federal budget and state/local budgets into a more sustainable balance (something we are all just dying to get done.)

      We propose the following:

      Share the Sacrifice As We Share the Financial Wealth*

      Top 1%:           42%
      Top 2%-5%:     27%
      Top 6%-10%:   11%
      Top 20-11%:    12%
      Top 100-21%:     7%

      It may not get us all the way to where we should be, but it would be a step in the right direction.  

      The new, higher brackets for income above $1 Million fit right in.

      *http://sociology.ucsc.edu/...

      Sometimes when life hands you lemons, you should throw them back.

      by Into The Woods on Thu Mar 24, 2011 at 08:55:12 PM PDT

      [ Parent ]

  •  Your Honesty Is Admirable... (3+ / 0-)
    Recommended by:
    Tookish, AnnieR, Paul Hogarth
    A “millionaire’s tax increase” is politically viable – because the public supports raising taxes, when they understand that they’re not the one who will pay them.

    This fact is rarely spoken in public.  Because it makes us look like we are selfish.

    However, the way to get the most public support would be to include a cost of living increase every year so that thsoe trying to avoid taxes will know if they can do it 10, 20, or 30 years from now.  I suspect that many of today's college grads will be earning more than a million dollars a year before they retire.

    By putting the COLA in the bill, the government would be discouraged from encouraging inflation to raise revenues.

  •  Tax the Rich? Tax the Millionaires! (1+ / 0-)
    Recommended by:
    bleedingheartliberal218

    Is it possible you are confusing wealth with income?

  •  Obama has said often, "You'll have to make me.... (2+ / 0-)
    Recommended by:
    ebohlman, AnnieR

    do things."

    And not in the sense of "over my cold, dead body" but in the sense of "The people want this. I have to submit to the will of the people."

    Far too many liberals wants him to commit political suicide by pushing what his enemies will claim is a "socialist" agenda. That gives them the chance to lie like the dogs they are, and claim that he's hurrying us on to outright communism.

    But when people, respectfully, say, "Mr. President, we want this" not once, but again and again....when they take away the biggest obstacle to raising taxes on the rich, the idea everyone has in this country that someday, they too, just might be earning a quarter-million in taxable income.....when they ask for a 49% tax increase, a jump so high from what's been asked in the past that it' going to shock people....and make them think he's very reasonable when he "compromises" on, say, a tax increase of 44%....we've actually got a better chance of getting this through.

    Politics is a very complex game. You have to deal, gather support, soothe the fears of those being lied to, ask for more than you want so that that the other side can save face by negotiating a better deal....the deal you had in mind all the time.

    It's a mind game. It's a proposal and counter-proposal game. Its a "I'll 'settle' for this now, and when people find out that it's a good deal for them, I'll ask for more later" game.

    This president is darn good at playing it.  

    Freedom has two enemies: Those who want to control everyone around them...and those who feel no need to control themselves.

    by Sirenus on Thu Mar 24, 2011 at 02:34:14 PM PDT

  •  Fiscal Responsibility Requires (0+ / 0-)

    that the UNFUNDED Tax Cuts for the Top 2% get axed.

    Borrowing money from China to hand over to the richest Americans is utter assholishness!

    Tax the Rich at 90% like Eisenhower did, and see them bitch and bellyache about it.  They have it easy today.

  •  Please don't propagate the myth (3+ / 0-)
    Recommended by:
    AnnieR, Paul Hogarth, Into The Woods
    Until 1963, the richest Americans paid over 90% of their income in taxes

    That marginal tax rates are the same as effective tax rates. The very rich never faced an effective tax rate of anything close to 90% (also remember that before 1986, a much smaller percentage of a high-earner's income was treated as taxable. There were all sorts of deductions and shelters back then that are no longer allowed).

    This doesn't detract from the point that we need more tax brackets at the high end. There's a whole lot more spread at the high end of the income distribution than there is at the low end (and by low end, I mean the bottom 95%!). Right now the top bracket is at $375K, but there are people making hundreds and even thousands of times that. Such ratios don't exist in the bottom 95%; someone making one-hundredth of the top-bracket amount would be making less than half the poverty level. It makes no sense whatsoever for someone making $37M to face the same marginal rate as someone making $375K.

    If you Google "headache brain tumor", you will come away convinced that your headache is actually cancer—Seth Mnookin

    by ebohlman on Thu Mar 24, 2011 at 03:57:10 PM PDT

    •  I Agree. But Please Tell That to the GOP (1+ / 0-)
      Recommended by:
      ebohlman

      Because the "I pay half of all my income in federal income tax" gets way more play that the 90% highest bracket does.  

      That's right up there with the bottom 50% pays no taxes at all.  

      Huge myth.  Huge BS.  And yet over and over it goes unchallenged by people who should know better.

      Sometimes when life hands you lemons, you should throw them back.

      by Into The Woods on Thu Mar 24, 2011 at 08:12:55 PM PDT

      [ Parent ]

  •  81% Support the Million Income Surcharge Idea (0+ / 0-)

    We had a pretty good discussion of it here:

    http://www.dailykos.com/...

    Glad some members of Congress are at least trying to put it on the table.

    Eventually it will stay there.

    I've got upper-middle income GOP friends who would support something like this in a minute.

    I was not surprised to see the survey results (Wall Street Journal/NBC) that showed that 81% support.

    Nor was I all that surpised to calculate that almost half of the self-identified "conservatives" who responded to the poll would support that idea.  

    We also had some discussion about marginal vs effective tax rates and as far as I can tell, the issue of whether the "effective paid" rate was higher when the marginal top rate was at it's highest, was not a settled matter either way.  

    Anyone who has data on effective paid income tax rates by income category going back into the past far enough to tell should share the link.  

    Sometimes when life hands you lemons, you should throw them back.

    by Into The Woods on Thu Mar 24, 2011 at 08:10:24 PM PDT

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