President Obama and Democrats in Congress have aligned on a populist,
"tax the rich" strategy for the 2012 campaign. Now they have to figure
out exactly who that is.
It was clear they had not resolved the thorny question last week, as Senate Democrats unveiled a new "millionaires tax" to pay for the president's jobs bill. The proposal neatly replaced Obama's preferred funding plan and probably bolstered the bill's chances in the Senate. But it also appeared to depart from the party's previous characterization of "the haves we're asking to have less."
Obama and his fellow Democrats for years have described the wealthy as couples making
It was clear they had not resolved the thorny question last week, as Senate Democrats unveiled a new "millionaires tax" to pay for the president's jobs bill. The proposal neatly replaced Obama's preferred funding plan and probably bolstered the bill's chances in the Senate. But it also appeared to depart from the party's previous characterization of "the haves we're asking to have less."
Obama and his fellow Democrats for years have described the wealthy as couples making
more
than $250,000 and individuals making more than $200,000 — 3% of U.S.
households. By shifting away from that number in hopes of benefiting
from the sound-bite punch of a millionaires tax, the administration may
find it difficult to return to casting the broader net.
Since his presidential campaign, Obama and most Democrats have advocated allowing the George W. Bush administration's tax cuts to
Since his presidential campaign, Obama and most Democrats have advocated allowing the George W. Bush administration's tax cuts to
expire
for incomes exceeding $250,000. The president used the same cutoff
last month in outlining his plan to pay for the $447-billion jobs
package.
Those efforts have not been abandoned, the president said, even as he endorsed the Senate Democrats' proposal.
But the smaller footprint of a tax only for people who make more than $1 million a year proved too appealing for Democrats. Facing a fierce campaign season in an ugly economy, raising taxes is a risky proposition. Raising taxes on the wealthy — a 5.6% tax on income exceeding $1 million — is far less so.
The Senate Democrats' plan would affect just two-tenths of 1% of U.S. households, according to the nonpartisan Tax Policy Center.
Those efforts have not been abandoned, the president said, even as he endorsed the Senate Democrats' proposal.
But the smaller footprint of a tax only for people who make more than $1 million a year proved too appealing for Democrats. Facing a fierce campaign season in an ugly economy, raising taxes is a risky proposition. Raising taxes on the wealthy — a 5.6% tax on income exceeding $1 million — is far less so.
The Senate Democrats' plan would affect just two-tenths of 1% of U.S. households, according to the nonpartisan Tax Policy Center.
The
shift marked a victory for Democrats from parts of the country where
the cost of living is high. Families earning $250,000 in their
regions, lawmakers argued, look more like middle-class, dual-income
worker bees than tony yacht owners.
"They are not rich," said Sen. Charles E. Schumer (D-N.Y.), a leading proponent of the tax on wealthier people. "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's associated with wealth in America."
But critics see a dangerous policy precedent in defining "the rich" by what they can buy, not by how their incomes compare with those of other taxpayers.
Households making a combined $250,000 are earning about five times the national average,
"They are not rich," said Sen. Charles E. Schumer (D-N.Y.), a leading proponent of the tax on wealthier people. "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's associated with wealth in America."
But critics see a dangerous policy precedent in defining "the rich" by what they can buy, not by how their incomes compare with those of other taxpayers.
Households making a combined $250,000 are earning about five times the national average,
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