It was recently announced that President Obama is going to be seeking a new top tax bracket for millionaires. As Aravosis mentioned, it is “politically quite smart to put the Republicans on the defensive regarding tax increases on the wealthy.” A higher tax rate on the people who can most afford is the best way to increase revenues and reduce the deficit.
Unfortunately, as has recently been the case with President Obama, ostensibly good ideas (push for job creation, pay for job creation with tax hikes on the rich and corporations, tax millionaires), are mediated by being pairing to very conservative ideas (cut Medicare & Medicaid, prolong payroll tax cuts). While I think this is a good general direction for Obama to go in, specifics matter. As a progressive, I’m looking not for better optics from President Obama, but better policy solutions that help more people.
While Warren Buffett is certainly a well-regarded figure in the world of finance and an ostensibly less evil Master Of The Universe than we usually get, I still have real problems with the outsourcing of idea creation from the White House to Warren Buffett.
He will call it the “Buffett Rule,” a nod to billionaire investor Warren Buffett, who has criticized a system that allows the rich to pay a smaller portion of their income in taxes than middle- and working-class Americans because wages are taxed at a higher rate than investment income.
It is unclear how much the new tax rate for millionaires would raise, but it would impact only 0.3 percent of taxpayers, a White House official said.
Like Warren Buffett, the President will not be making a specific proposal for what the new rate on millionaires will be. Will it be Reagan’s 50% rate? Eisenhower’s 91% rate? We don’t know, though I would guess it’s more likely to be in the 35-40% range.
Like Warren Buffett, the President is pushing for cuts to Medicare and Medicaid:
The proposal is expected to include hundreds of billions of dollars in cuts to Medicare, Medicaid and defense programs, as well as a call on Congress to overhaul the Tax Code.
Like Warren Buffett, the President has called for the Super Congress to exceed their $1.5 trillion mandate for cuts and wants to see hundreds of billions of dollars more taken out of the deficit.
Beyond taking very clear cues from Warren Buffett as to what policy path he should advocate for as President, the administration seems to be grossly overestimating the level of support taxing millionaires will garner while simultaneously advocating for cuts to Medicaid and Medicare.
Democrats have balked at the idea of accepting cuts to entitlement programs without forcing Republicans to agree to new tax revenue. The proposal is certain to energize the progressive base, which has wanted Obama to draw sharper contrast with Republicans for defending tax breaks for the wealthy.
I find it very troubling that the administration will provide specific ways that they plan on cutting hundreds of billions of dollars from two of the three major social support programs, while refusing to say specifically how much they want to tax millionaires, and yet they still expect this to be a plan which “energize[s] the progressive base.” Given today’s current political realities, a plan to cut Medicare and Medicaid is almost certain to have a shot at coming into law, while a new tax bracket for millionaires is almost certain to never become law.
I’ve been waiting for President Obama to start pushing towards job creation and forcing the rich to pay more in taxes for a long while. I’m glad that he’s doing these things now. I just am not at all enamored by the decision to pair these genuinely liberal policy objectives with deficit reduction, cuts to our greatest social support programs, and austerity. These don’t have to be paired together and when the climate suggests that the conservative ideas will be actualized while the liberal ideas are tossed aside, the liberal ideas just become a Trojan Horse for conservativism. Not only does that energize me, but it makes me disinclined to support this platform at all.
Oh well, Robert Reich thinks the President is going to impose a millionaire tax rate around 20%. If that proves true, this is beyond a joke, it’s an assault on Medicare and Medicaid via a feckless attempt to get the rich to chip in.
The Wall Street Journal is now reporting that President Obama will not propose raising the Medicare eligibility age. That’s good news and hopefully it’s accurate. We’ll see tomorrow.