$1M not equal to $250K

To switch the tax hike cutoff to $1 million,from the previous $250,000 cutoff of the Bush era, makes an already tight tax base too tight to raise the revenue we need

  • close
    President Barack Obama speaks at the White House Forum on American Latino Heritage, Wednesday, Oct., 12, 2011, at the Interior Department in Washington. The author argues that Obama's proposed tax hikes won't help the economic crisis if the income cutoff rate for the taxes is $1million, rather than $250,000.

    Pablo Martinez Monsivais/AP
    View Caption
  • About video ads
    View Caption
of

I get that the Senate D’s want to pay for the President’s jobs bill by raising a tax surcharge on millionaires and billionaires, and I understand the rationale.

I also get that red is the new black, or something to that effect.

But it’s very important that we don’t allow $1 million to become the new $250,000.

That is, when people talk about sunsetting the highend Bush tax cuts, we’re using $250K as a cutoff, not $1m. To switch to the higher number makes an already tight tax base too tight to raise the revenue we need. Remember, just above 2% of households, and about the same share of small businesses,* are above $250K, so the lower cutoff is not biting the middle class. And moving to the $1m cutoff loses you slightly less than half the revenue from the highend sunset.

*The majority of “small businesses” above $1m are law practices, hedge funds, self-incorporated consultants who are not going to hire anybody, etc…not mom and pop shops.

The Christian Science Monitor has assembled a diverse group of the best economy-related bloggers out there. Our guest bloggers are not employed or directed by the Monitor and the views expressed are the bloggers' own, as is responsibility for the content of their blogs. To contact us about a blogger, click here. To add or view a comment on a guest blog, please go to the blogger's own site by clicking on jaredbernsteinblog.com.

We want to hear, did we miss an angle we should have covered? Should we come back to this topic? Or just give us a rating for this story. We want to hear from you.

Loading...

Loading...

Loading...