Posted on 03/20/2011 9:00:14 PM PDT by Libloather
House, Senate Dems break from Obama's tax policy for wealthy
By Bernie Becker - 03/20/11 06:00 AM ET
Democrats in both chambers of Congress are pushing for legislation that would raise taxes on millionaires, breaking from President Obama who has long endorsed tax increases for families making more than $250,000.
The strategic shift comes as lawmakers on Capitol Hill are beginning to discuss tax reform, and are poised once again to engage in the debate over whether the Bush-era tax rates should be extended.
In an interesting development, liberals are calling for taxes to be raised on people making more than $1 million annually while Obama and other party leaders have embraced $250,000 or more per year. The left-leaning lawmakers stress they still support what Obama wants to do though the president wasn't able to convince the Democratic-led Congress to pass his tax blueprint last year.
The legislators – who include Sen. Bernie Sanders (I-Vt.) and Rep. Jan Schakowsky (D-Ill.) – argue that poll numbers suggest the public is on their side and that added revenue is needed to narrow deficits and keep programs like Head Start from being placed on the chopping block.
But they downplayed the dollar figure differences between their plans and the president's.
“I don’t think there’s anything magical about 250,000 or a million. It’s how much money do you need,” said Sanders, whose proposal would set a 5.4 percent surtax on income over $1 million a year. “In my view, the Democrats and the president should be very strong on this issue – that our goal is shared sacrifice and let’s not balance the budget on the backs of the working and middle class.”
Schakowsky signaled that her legislation – which would create a 45 percent bracket for income between $1 million and $10 million a year, with a top rate of 49 percent for income of $1 billion a year and above – could work in concert with a plan to return rates to Clinton administration levels. The current top individual tax rate of 35 percent would rise to 39.6 percent at the end of next year, unless existing high-income rates are extended again by Congress.
“I certainly don’t see it as a counter to the real and specific debate on the Bush tax cuts,” Schakowsky 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.”
Still, the legislation offered by Sanders and Schakowsky comes just months after Democrats debated whether to push to allow the Bush-era tax rates to expire for income above $200,000 for individuals and $250,000 for couples or to extend the tax rates for income up to $1 million.
In the end, the Senate rejected both those proposals during last year’s lame-duck session of Congress, paving the way for a compromise hashed out by the White House and Republicans that extended the Bush-era tax rates for two years at all income levels.
Sen. Charles Schumer (D-N.Y.), the main proponent of the so-called millionaire’s tax, said at the time his proposal was defeated that he would continue to fight for that sort of plan. Schumer last year urged the White House to back his plan, though Obama opted to keep to his $250,000 policy.
Infuriating progressives in Congress, the president later signed off on a deal with the GOP extending all of the Bush-era income tax rates that also included additional unemployment benefits. The bipartisan accord on the tax rates expires at the end of 2012, and Obama has said he is looking forward to engaging Republicans in a debate on tax reform in the 112th Congress. Other Democrats, however, are wary of that looming fight.
While Obama has moved to the middle on various issues since the midterm elections, he has stuck to his $250,000 figure, which was included in the White House's fiscal 2012 budget request.
Some supporters of a millionaire’s tax say that they learned some lessons from the lame-duck debate last year. They contend the new bills give Democrats a simpler message: Republicans want to help millionaires and Democrats are for the middle class.
They also point to a recent NBC News/Wall Street Journal poll that found roughly eight in 10 adults thought it was either totally or mostly acceptable to impose a surtax on people making more than $1 million a year.
“It’s an understandable option ... We didn’t want to get into too much nuance about, well, should it be 250, 300, 275,” said Rep. Raul Grijalva (D-Ariz.), a co-chairman of the Congressional Progressive Caucus. “I think setting the cap where it is – millionaires – sets a starker option.”
Sanders and Schakowsky say their millionaire proposals would raise significant amounts of revenue – as much as $50 billion in Sanders’ measure, roughly $79 billion in Schakowsky’s – as well as eating into what both lawmakers say has been a stark increase in income inequality.
But, with Republicans now controlling the House, even Schakowsky admits that her measure faces an uphill climb. The bill, introduced this week, has nine co-sponsors, while only one of Sanders’ colleagues (Sen. Barbara Mikulski (D-Md.)) has signed on to his legislation.
House Minority Leader Nancy Pelosi (D-Calif.) and Senate Majority Leader Harry Reid (D-Nev.) have publicly endorsed Obama's $250,000 threshold. But some Democratic centrists and other Democrats who hail from high-cost-of-living states have balked at the president's definition of wealthy.
Sanders did not express much confidence that the White House would get on board with his proposal, which he has framed as a way to fund the government this year without making crippling cuts to important programs.
“We have not heard – and I’m extremely disappointed, but not surprised – but we have not heard that the president has indicated that he is interested in coming up with revenue, just that he wants to negotiate with Republicans on spending cuts,” Sanders said.
Even so, Democrats believe that higher taxes on the wealthy, and possibly on millionaires, could be a central part of broader discussions on getting the nation’s books in order.
Congressional Republicans continue to push their case that the path to fiscal health is through reining in spending, not increasing taxes.
“Job-destroying tax hikes on small businesses and American families are not the answer to out-of-control Washington spending,” Sen. Mitch McConnell (R-Ky.), the minority leader, said this month.
But a Senate leadership aide said that any long-term deficit reduction agreement would have to confront tax cuts for the wealthy.
“It goes to the heart of whether we are serious about reducing the deficit, as opposed to just shrinking government,” the Democratic aide said.
That's none of your business, Bernie.
RATs aren’t impressed with Boehner’s crying and think they won in November. The GOP put a eunuch in as Speaker and he’s letting the RATs run the show.
At the rate that Helicopter Ben is creating money, this argument is a moot point. If things continue, in the not too distant future, most people will be making $1M a year.
Head Start should be on chopping block. It doesn't work.
“While Obama has moved to the middle on various issues since the midterm elections, ....”
Delusional.
We’re getting sandbagged by the media and the Democrats with this bullshit creation of a rift in the left.
These are not tax and spend commies they are spend and tax commie libs.
Pray for America
No, Red Bernie. In the REAL world, it is how much money you HAVE that dictates your spending habits.
If you “need” money, tax all the politicians’ salaries and reelection funds. Add all the LIBs in Hollywood who squawk about their low taxes. Then add in all of Soros’s ventures.
Then come talk to me.
‘Good afternoon, sir; would you mind if I stick my hand in your pocket?’
If you confiscated 100 percent of what Millionares make How long would it take for the democrats to Spend it? I think about 5 Minutes then Watch Out,they will be coming for YOU!
If you confiscated 100 percent of what Millionares make How long would it take for the democrats to Spend it? I think about 5 Minutes then Watch Out,they will be coming for YOU!
*
What follows is a snippet of a letter I’d like to write in response to Senator Sanders comment:
“. . . our goal is shared sacrifice. . . .”
YOU A$$HOLE!
You and your LIEberal/Socialist/Marxist/Fascist Bastard buddies spend 80 years bankrupting America and destroying the Great American Middle Class and you have the unmitigated gall to call for “shared sacrifice?”
GO TO HELL!
Every one of you who has perpetuated this massive FRaud on the American people ought to be rounded up, tried and convicted of crimes against the American people, stripped of all of your wealth and imprisoned in Alcatraz!
(Yeah, I know it is closed. We’d issue you a mop, a broom and a dustpan, along with your orange jump suit, so you could rehab the place.)
And the dead politicians and “advisors” who aided and abetted you should be exhumed and reburied on Alcatraz Island, as well! It is a fit place for you and your buddies to spend eternity!
Etc., etc.
How many black athletes will be eager to kiss NObama’s behind in any coming elections?
They will be socked hard with such legislation.
“If things continue, in the not too distant future, most people will be making $1M a year.”
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Yep, I can’t wait to buy a fast food hamburger that costs what I used to make in a month.
If it gets to that point, I'm moving to Zimbabwe and becoming one of those trillionaires I've been reading about. Where else can you pull out a $10 trillion dollar bill and still not have enough for a Big Mac & fries?
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