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Democrats: $250K isn't rich (Now abandoning their biggest talking point on taxes)
POLITICO ^ | 10/06/2011 | Manu Raju

Posted on 10/06/2011 1:07:34 PM PDT by SeekAndFind

Democrats are increasingly abandoning their biggest talking point on taxes: Families earning more than $250,000 a year are “wealthy” and should pay more.

That figure — $250,000 for a household — has been at the tip of the tongue of so many Democratic candidates and lawmakers in the past few elections that it’s become ingrained in the party’s tax philosophy. But they’ve taken a beating from Republicans and have grown increasingly divided on the issue, since that income level would not only cause tax increases for some small businesses but also hit upper-middle-class suburban voters in swing states.

So Democrats on Capitol Hill and the White House are settling on an easier sales pitch: Tax the millionaires, believing that public opinion is firmly on their side that the truly rich should pony up more cash as the economy struggles and the national debt continues to grow. The new rhetoric could force a serious rethinking of the Democratic approach toward the Bush-era tax cuts for high earners that they’ve vilified for the past decade, lawmakers said Wednesday.

As they gear up for this fall’s fight over the economy and deficit reduction, Democrats think that “drawing the line at $1 million is the right thing to do,” said Sen. Chuck Schumer (D-N.Y.), a chief advocate of the effort.

“In the eyes of many, it is hard to ask more of households making $250,000 or $300,000 a year,” he said Wednesday. “In large parts of the country, that kind of income does not get you a big home or lots of vacations or anything else that is associated with wealth. It also would affect too many small businesses.”

“We need to try to find bipartisan support, and I think there’s a greater likelihood of that if we [tax] income in excess at $1 million,” said Sen. Tom Carper (D-Del.).

Added liberal California Sen. Barbara Boxer of the Democrats’ latest proposal: “I think we feel millionaires — that’s the fairest way to go.”

The latest sign of this evolution came Wednesday morning, when Senate Majority Leader Harry Reid (D-Nev.) and his top lieutenants modified the president’s jobs plan to include a 5.6 percent surtax on those earning more than $1 million to pay for the $447 billion program. One of the major objections in the president’s initial plan was his proposal to limit deductions for those earning more than $250,000.

Briefing reporters Wednesday, House Minority Whip Steny Hoyer of Maryland acknowledged that “some of our members may like [the new Senate] alternative better.”

But Republicans scoffed at the plan.

“None of that is pro-jobs,” said Sen. Rob Portman (R-Ohio), who is on the 12-member deficit-reduction supercommittee. “Increasing taxes would be bad for economic growth — that doesn’t sounds like a jobs bill to me.”

Democrats say it would add fairness to a skewed Tax Code — and the president has shifted his rhetoric as well.

When he unveiled his deficit-reduction plan last month, President Barack Obama took a similar populist approach, proposing what he called the “Buffett rule” to tax millionaires and billionaires at a higher rate, named after wealthy investor Warren Buffett, who famously complained that his secretary’s tax rate is higher than his. And that came a few months after Senate Democrats on the Budget Committee offered an outline calling for a surtax on that income group.

In a sense, the push for a higher threshold is a sign of Schumer’s growing influence over the Democrats’ political tactics - especially since it was the White House that balked last fall at the New Yorker’s call to target millionaires because of its concerns that billions of dollars in potential new revenue would be lost.

Sen. Kent Conrad (D-N.D.), chairman of the Budget Committee, acknowledged the party’s shift away from the $250,000 level, saying setting the level at $1 million makes sense because “we have a situation of people in that category [who,] on average, … are paying less of an effective tax rate than people who work for a living.”

At the White House on Wednesday, spokesman Jay Carney said the Obama administration is not backing away from calls to end the Bush-era tax cuts for those making more than $250,000, saying that the Buffett rule is just a principle for tax reform.

“This president supports the expiration of the Bush tax cuts for the highest-income earners, those making more than $250,000,” Carney said Wednesday. “That has not changed, full stop. He also supports tax reform that would as a guiding principle contain with it the Buffett rule. These — and those things — co-exist happily, as does the Senate approach to this. One does not cancel out the other.”

But if the White House reengages in an election-year fight over the $250,000 level, the president may have to deal with growing divisions in the Democratic ranks.

Indeed, Sen. Joe Lieberman (I-Conn.) voted last December against Obama’s plan to allow the Bush-era tax cuts to expire on those making more than $250,000 and Schumer’s plan to set the threshold at $1 million. But he said he’d support setting the level at $1 million now as part of a broader deficit agreement.

“I think it feels more defensible,” he said. “While $250,000 is a lot a year too, there are a lot of people in the country who feel like they’re still middle class at that point.”

But Lieberman told POLITICO that he opposes Obama’s jobs plan — even with the changes — because he’s “skeptical” that the $447 billion in new spending and tax incentives will actually create jobs, adding that the revenue increases should be used to pay down the debt instead.

“The question I’m asking myself about the jobs act is whether the result of it will be worth spending a half-trillion dollars on,” Lieberman said, adding that he’d vote for procedural efforts to allow the debate to begin.

In anticipation of the Senate debate, the Congressional Budget Office late Wednesday released its $175 billion 10-year estimate for the direct spending costs generated by the jobs bill, which includes assistance to unemployed workers, highway and transportation projects, and aid to states to protect against further layoffs of teachers. The overwhelming portion, as spelled out by the CBO in a letter to Reid, would be concentrated in the first five years including $50.3 billion in 2012 and $59.8 billion in 2013.

But to pay for the plan, couples whose taxable income before deductions is more than $1 million would be hit with a 5.6 percent surtax over 10 years, and it would take effect in 2013.

It’s not hard to understand why Democrats are taking that approach. A recent CBS poll found that 64 percent of the public believes millionaires should pay more in taxes, with 83 percent of Democrats, 65 percent of independents and 40 percent of Republicans backing such an approach.

“I think there’s more of a debate” over setting the limit at $250,000, said Sen. Debbie Stabenow (D-Mich.), who is up for reelection, referring to the dynamics in the Democratic Caucus.

“Obviously, in some parts of the country, it hits people differently,” said Democratic Sen. Sherrod Brown, who also faces a tough reelection in the swing state of Ohio. “I’m fine either [setting the level at $250,000 or $1 million], but some aren’t — and I’m fine with that.”

-- David Rogers, Scott Wong, Seung Min Kim and Carrie Budoff Brown contributed to this report.


TOPICS: Business/Economy; Culture/Society; Government; News/Current Events
KEYWORDS: rich; taxes; taxhikes

1 posted on 10/06/2011 1:07:39 PM PDT by SeekAndFind
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To: SeekAndFind

Of course the democrats would never raise the definition of ‘the rich’ today to get the new brackets codified all the while planning to lower it back to 250k - or even 75k - tomorrow.


2 posted on 10/06/2011 1:12:55 PM PDT by skeeter
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To: SeekAndFind

To follow Al Gore’s logic, if a person makes 250K per year for 4 consecutive years, then that person is a millionaire.

Can’t make this stuff up.


3 posted on 10/06/2011 1:14:02 PM PDT by Texas resident (Hunkered Down)
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To: Texas resident

RE: if a person makes 250K per year for 4 consecutive years, then that person is a millionaire

Then by that token, I am a millionaire too. I’ve made over a million working in my career.


4 posted on 10/06/2011 1:15:43 PM PDT by SeekAndFind (u)
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To: skeeter
while planning to lower it back to 250k - or even 75k - tomorrow. ... After the election
5 posted on 10/06/2011 1:16:23 PM PDT by farmguy
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To: SeekAndFind

They’ll just find some other term to use instead of using a specific dollar figure.

When you deal exclusively with lies, you try to obfuscate what you mean the best that you can.

They’ll probably just start demonizing some undefined “millionaires” instead.


6 posted on 10/06/2011 1:18:13 PM PDT by MrB (The difference between a Humanist and a Satanist - the latter knows whom he's working for)
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To: SeekAndFind

Unfortunately for the Dems, there are too few people making more than $1 million a year to raise significant revenue. They will have to think of something else.


7 posted on 10/06/2011 1:18:17 PM PDT by proxy_user
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To: SeekAndFind

Why won’t Barry pay his fair share?

When will Barry write a check to the government?


8 posted on 10/06/2011 1:19:10 PM PDT by School of Rational Thought (Fun for women ages 21 - 35)
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To: proxy_user

No, no, they don’t mean “making more than $1 million a year”,
they mean “millionaires”, as in, net-worth millionaires.

If you have any sort of savings and a paid off house, you might qualify.


9 posted on 10/06/2011 1:21:58 PM PDT by MrB (The difference between a Humanist and a Satanist - the latter knows whom he's working for)
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To: proxy_user
Thats why their raising the earnings limit defining who's rich is purely rhetorical.

They'll go after the middle class eventually because thats where the money is. Right now, they have to fool the electorate.

10 posted on 10/06/2011 1:22:42 PM PDT by skeeter
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To: skeeter
I think we feel millionaires — that’s the fairest way to go.”

Scary stuff. Nice to know that a handful of know-nothing hacks think that they can decide who's rich and who's poor.

Amazing arrogance on display here. Simply amazing.

11 posted on 10/06/2011 1:22:55 PM PDT by wbill
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To: SeekAndFind

Obama wants 250k because ‘millionaires and billionaires’ just isn’t enough tax base for the money they want to spend


12 posted on 10/06/2011 1:26:26 PM PDT by ari-freedom (We need a Steve Jobs Plan: encourage innovation, not regulation.)
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To: School of Rational Thought

RE: Why won’t Barry pay his fair share?

When will Barry write a check to the government?

___________________________________________________

Curious as to how much Barry paid in taxes? see here:

http://www.huffingtonpost.com/2011/04/18/barack-obama-tax-returns_n_850672.html


13 posted on 10/06/2011 1:26:41 PM PDT by SeekAndFind (u)
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To: SeekAndFind
Added liberal California Sen. Barbara Boxer of the Democrats’ latest proposal: “I think we feel millionaires — that’s the fairest way to go.”

Don't people get it yet?

That this is all a grand and premeditated LIE?

The definition of the term "millionaire" would be tortured into submission if (or when) they ever get their way with a "millionaires' tax"

.

14 posted on 10/06/2011 1:29:26 PM PDT by Seaplaner (Never give in. Never give in. Never...except to convictions of honour and good sense. W. Churchill)
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To: SeekAndFind
Obama really wanted to raise taxes on billionaires, millionaires and thousandaires, but the polling was against it so he had to back off a little.
15 posted on 10/06/2011 1:34:53 PM PDT by KarlInOhio (Compare "Delay is preferable to error" - Thomas Jefferson // "Pass this bill now!" - Barack Obama)
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To: Seaplaner
All that is needed,to make everyone millionaires, is a good bout of hyperinflation. Just keep printing money, to “stimulate” the economy, and soon everyone will be rich enough to tax.
16 posted on 10/06/2011 1:35:36 PM PDT by USFRIENDINVICTORIA
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To: MrB

Except that net worth is not reported to the IRS et al.

Short of a radical new privacy invasion, they won’t know who owns how much.
Worse, net worth is an ill-defined concept in law. Should net worth reporting be required (I don’t see how), an awful lot of “rich” would soon not be, as they downgrade homes to $900,000 and relocate savings to non-cash forms. (Recall some movie where the rich bad guy is asked where he stashed all that wealth: “See this cane? it was Charlie Chaplin’s. You get the idea.”)

And remember that once you reach “rich”, money can be redirected as needed. Favorite example: Steve Jobs’ salary was $1.


17 posted on 10/06/2011 1:41:33 PM PDT by ctdonath2 ($1 meals: http://abuckaplate.blogspot.com/)
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To: USFRIENDINVICTORIA
All that is needed,to make everyone millionaires, is a good bout of hyperinflation. Just keep printing money, to “stimulate” the economy, and soon everyone will be rich enough to tax.

That won't work, either, because when you have hyperinflation not only do you get a revenue boost, but an expense boost as well as government would have to pay more for paperclips and such.

18 posted on 10/06/2011 1:42:52 PM PDT by asinclair (Talk is cheap, actions are priceless)
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To: SeekAndFind

Finally they get it. Now their biggest problem, taxing just
millionaires punitively won’t generate enough revenue to amount to a tinkers damn.


19 posted on 10/06/2011 1:44:03 PM PDT by traderrob6
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To: skeeter
They'll go after the middle class eventually because thats where the money is.

What are you CRAZY? The Republicans are eroding this class completely and they only want the millionaires to have any money! The Republicans want people to die and to hang people from trees and to push people off cliffs! And on top of all of that E-V-I-L, the middle-class is disappearing as fast as I can type! /sarc

Honestly though, doesn't this move by the Dems PROVE that all of the above class-warfare crap is one LIE after another? I mean, if the middle class is dieing, because of those evil republicans, then wouldn't the definition of rich be RECEDING, not INCREASING?!?!
20 posted on 10/06/2011 1:44:59 PM PDT by ExTxMarine (PRAYER: It's the only HOPE for real CHANGE in America!)
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To: ctdonath2
Short of a radical new privacy invasion, they won’t know who owns how much.

I guess, then, they'll just have to go with the "employed Caucasian" tax. It's really what they want to do anyway.

21 posted on 10/06/2011 1:45:11 PM PDT by MrB (The difference between a Humanist and a Satanist - the latter knows whom he's working for)
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To: asinclair

True, but you’d have a lot more millionaires to tax. /s


22 posted on 10/06/2011 1:50:16 PM PDT by USFRIENDINVICTORIA
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To: proxy_user

The IRS reports about 237K have an AGI of $1M+ in a given year. Since there will not be a new bracket the surcharge must be on the total tax owed. But my unscientific calc says that the 48B needed each year(principle and int on 447B)would require an additional average $202K in taxes from each of those 237K million dollar earners each year.My math challenged mind reels at forming an algorithm to process what the taxes would actually for individuals.


23 posted on 10/06/2011 1:51:45 PM PDT by xkaydet65 (IACTA ALEA EST!!!')
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To: traderrob6

RE: taxing just millionaires punitively won’t generate enough revenue to amount to a tinkers damn.

Of course they know that. However that isn’t their real goal — it is CONTROL (using the “fairness” buzzword and stalking envy to achieve it)


24 posted on 10/06/2011 2:03:03 PM PDT by SeekAndFind (u)
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To: SeekAndFind

Schumer knows how his constituency will react to $250,000 being the number. Sadly that’s not a lot of money in NY and Chuckie knows it.


25 posted on 10/06/2011 2:05:11 PM PDT by PBRSTREETGANG
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To: SeekAndFind
But in the jobs bill Obama wants passed-couples making 125,000.00 per year will get some itemized deductions taken away giving them a tax increase. The democrats in congress are liars unless they are just stupid actually I think it is both.
26 posted on 10/06/2011 2:10:59 PM PDT by funfan
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To: skeeter

I’m guessing that ‘rich” will never go lower than $174,000 a year. That’s the base pay for a congress member.


27 posted on 10/06/2011 2:13:21 PM PDT by Billthedrill
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To: SeekAndFind

28 posted on 10/08/2011 6:59:52 AM PDT by combat_boots (The Lion of Judah cometh. Hallelujah. Gloria Patri, Filio et Spiritui Sancto.)
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