This is a good sign. Instead of sitting around and waiting for leadership from the White House, liberal Congress members are taking the initiative to push tax legislation that will clearly draw the lines between the rich — and everybody else. From The Hill:
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 that while they still support what Obama wants to do, the president wasn’t able to convince the Democratic-led Congress to pass his tax blueprint last year.
The group of legislators, which includes 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 such as 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 Congress again extends existing high-income rates.
“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.”
Finally, some common sense proposals! D’ya think this will ever become REALITY? I think our nation’s future DEPENDS upon it!
I never studied economics,and I may well be crazy at this point in my life, but I have a theory. Back years ago when I was young, I recall hearing about people who complained that it did not benefit them when they got raises because it put them in a higher tax bracket and they nettted very little on the raise. (Often they preferred that the money be put into benefits and insurance, which is why we have the pension funds and insurance benefits that the right-wingers are so keen to bust now.) Anyhow, it seems that higher progressive income taxes discouraged companies from sucking out money to pay executives and stockholder dividends, and that money was retained in the company and used for boring stuff like maintenance, r&d, and (God forbid) paying the employees a little more.
Then in Reagan time, these taxes on high incomes and capital gains were cut, it became practical to start sucking money out of the companies to pay out in salaries, bonuses and dividends. Then they tied executive salaries to stock prices, which made it even more of an incentive to suck money into dividends to make the stock price go up. Money is then drawn out of the companies by cutting maintenance and upkeep, customer service, mergers and layoffs, cutting and plundering pensions and breaking contracts to extract pay cuts. Also off-shoring. This sends a flood of money to the upper classes, screws the employees and disembowels the industrial strength of America.
The next time you have lunch with your buddy Dr. Krugman, ask him what he thinks of my theory, please. If I am right, one might conclude that restoring the highly progressive income tax and taxing unearned income might help our country. If I am wrong, I think maybe we are screwed.
Those tax cuts create jobs remember?
I asked Jay Ackroyd, recovering economist, and he not only said you were right, he asked for you to call into his show Thursday night because it’s related to their topic. Email me for details.
Okay Charlie Brown.