By Chuck Collins
As lawmakers scramble to finalize a historic package of jobs and infrastructure, huge fights are underway to find a way to fund it.
The easiest, most efficient and popular way is to tax the extremely wealthy, like billionaires who saw their collective wealth increase by $ 1.8 trillion during the pandemic. Unfortunately, lawmakers have missed several opportunities to do so.
For example, the House Ways and Means Committee hasn’t taken obvious steps like taxing income from stocks at the same rate as labor income, or filling loopholes that billionaires use to avoid federal estate tax.
On the other hand, the Committee also suggested powerful reforms to tackle inequalities which should be included in the final legislation. One of these promising proposals is a “millionaire surtax”.
The idea is simple: Any income multimillionaires earn over a certain amount would be subject to a modest additional tax.
The millionaire surtax was originally introduced in 2019 and reintroduced in 2021 by Maryland Senator Chris Van Hollen and Virginia Representative Don Beyer. This bill would institute a 10% surtax on the income of couples earning $ 2 million or more (the richest 0.2%). The Tax Policy Center estimated that this would raise $ 635 billion over 10 years.
The Americans for Tax Fairness coalition coordinated a national campaign that now places the concept at the center of federal budget negotiations.
The recently released House Ways and Means plan differs slightly from this original proposal. It would impose a 3% surtax on the incomes of ultra-rich households earning $ 5 million or more per year, raising around $ 127 billion over 10 years. It also applies to income from investments, including trusts.
It’s a smaller transport, sure, but it’s worth relying on.
Of course, the holy grail of tax reform would be a total abolition of preferential treatment of capital gains, taxing income from property at the same rate as income from wages. Below that, a surtax on the income of ultra-millionaires is an important step towards equalizing the treatment of capital income and wages.
The millionaire surtax is easy to understand, simple to apply, and effective, as it covers all kinds of income, making it difficult for the rich to avoid. He’s laser focused on the super-rich. If you’re not a multimillionaire, you won’t pay a dime more.
The surcharge is extremely popular.
According to a Hart Research Associates poll, 73% of voters support the idea, including 76% of independents and moderates. Even a majority of Trump voters (57%) and Republicans (53%) support the policy. Millionaire surtax legislation has been approved by a wide range of 72 national organizations.
In the coming weeks, Congress will be debating the size of the Build Back Better plan and how to pay for it. The millionaire surtax should continue to be part of that mix and could even be broadened by increasing the rate from 3% to 10% and lowering the income threshold to $ 2 million.
While the millionaire surtax does not address colossal wealth inequalities, it does focus on taxing the income that largely derives from wealth. Learn more about the Millionaire Surtax on the campaign website created by Americans for Tax Fairness: www.surtax.org.
Previously posted on other words with Creative Commons licenses
You might also like these from the Good Men Project
Join The Good Men Project as a Premium Member today.
All Premium members can view The Good Men Project without ads.
A $ 50 annual membership gives you an all-access pass. You can be a part of every call, group, class and community.
A $ 25 annual membership gives you access to a class, social interest group, and our online communities.
An annual subscription of $ 12 gives you access to our Friday calls with the publisher, our online community.
Register a new account
Need more information ? A full list of benefits is here.
Photo credit: iStock