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  • The Millionaire Surtax: Back from the Dead?

    The “millionaire surtax” is the Michael Meyers of bad tax policy. Like the villain in the Halloween movie franchise, it keeps rising from the dead.

    Just as the writers of the infamous horror movies keep coming up with more preposterous ways to revive Mr. Meyers, the surtax keeps coming back for a host of reasons. Usually it is a “pay for” for some new big-government spending program, or to unnecessarily “offset” the cost of keeping a tax cut in place.

    The current revival comes at the hands of freshman Representative Rick Crawford (R–AR). His plan would slap a 5 percent surtax on incomes over $1 million to get Democrat support for a balanced budget amendment to the Constitution.

    By indicating that tax hikes are necessary to lower the deficit, Crawford displays a misunderstanding of the cause of the problem—it is that the government spends too much, not that it taxes too little.

    Yes, the Congressman is proposing a balanced budget amendment as a way to cut spending. But why not leave it there and let Congress get down to the business of cutting spending?

    Giving Congress any more of our money— through higher taxes—to spend won’t rectify the problem. Congress spends every dime it takes in plus whatever it can get away with borrowing. That’s why tax hikes never lower the deficit.

    And its not as if taxing the rich could even come close to solving the deficit problem, even if it weren’t the exactly wrong approach. Just raising the top two rates to “cover the deficit” would require a top tax rate of 223 percent! Taxing 100 percent—much less 200 percent—of a taxpayer’s income is impossible. (Article continued below)

    To lower the deficit, Congress must cut spending. It is that simple.

    Crawford also doesn’t seem to understand that a surtax on millionaires would hurt middle-income and low-income Americans the hardest. That’s because the surtax would hit half of all the income earned by businesses that employ workers yet pay their business taxes through the individual income tax code, according to the Treasury Department.

    The surtax would strip these important employers of resources they could have used to hire new workers or pay their existing workers more. So much for soaking the rich.

    The pain inflicted on middle-income and low-income workers is probably why Congress has failed to pass the surtax time and time again—even when liberals were the majority in the House of Representatives and Nancy Pelosi (D–CA) was Speaker. If the misguided surtax couldn’t make it into law then, there is little chance of it passing now.

    All Americans can be thankful for that.

    Posted in Featured [slideshow_deploy]

    10 Responses to The Millionaire Surtax: Back from the Dead?

    1. SoquelCreek says:

      Also, never mind that millionaires ALREADY pay a significantly higher effective tax rate. Meanwhile, more than 45% pay no federal income tax. http://www.twitpic.com/7hkke9/full

      • Loudmouth Elephant says:

        This study is dead on. We conducted a similar study at The Elephant in the Room to discover what kind of tax increases on millionaires' final effective tax rates were needed to have a dent in the deficit. Just as the Heritage found, it would require HUGE increases to even have a small dent. Check it out; pass it on: http://loudmouthelephant.blogspot.com/2012/03/tax

        Using a hollow, inefficient, unproductive campaign proposition such as "tax the rich" and "the rich need to pay their fair share" is nothing but class warfare.

    2. Stirling says:

      Liberals (and RINO's) as long as they hold office will never stop the class warfare, which is why they need to be deafeated in elections year after year. Hopefully until the idea of a millionaire tax or any other disquised name for it causes them fear of being singled out for critisism.

      ."to get Democrat support for a balanced budget amendment to the Constitution". – Sounds a lot like a "Pay to Play" scheme to me, or Chicago Politics.. Personally I'm sick of the Arogance and Elitism, "Holier then God mentality" of those that run roughshot over our consitution and individual rights. Only lemings would not see clearly spending = debt = bankruptcy. which is why liberals will denny consequences until their blue in the face with anger.

    3. HexColor says:

      The market is wallstreet not the american people. You sound like you support that cizitens united decision that the supreme court gave when you say the market is the people. Ron Paul does not even support corporate personhood. Libertarians believe laws like the patriot act are designed to protect the government from us the people. Liberals know that? these laws are not only about protecting the government but also protecting wallstreet from the people since they fund the government.

      • chatmandu002 says:

        The Supreme Court decision in Citizens United did not give corporation human rights. It said that Corporations/Unions have the same right of free speech as people. I haven't seen a corporation or a union vote, have you?

    4. texac says:

      The dollar amount will do nothing to substantially reduce the deficit – true. But the perception among the vast majority of voters is very real. Some sort of a surtax is necessary to take the wind of out Obama's sails. The GOP needs to finally needs to get on the right side of this issue. Additionally, they should consider another surcharge for those with a Beverly Hills zip code.

    5. Lloyd Scallan says:

      The "millionaire surtax" was never dead. The leftist in Congress and the White House just rename or overhaul any of their schemes to raise taxes on everyone in attempts to distort and distract the American people from their final agenda. We had all better wake-up now to realize these socialist/Marxist will not stop until we stop them. They have been working on destroying Western way of life for 100 years. Obama is the "crown jewel". They are not going to stop now.

    6. Loudmouth Elephant says:

      This study is dead on. We conducted a similar study at The Elephant in the Room to discover what kind of tax increases on millionaires' final effective tax rates were needed to have a dent in the deficit. Just as the Heritage found, it would require HUGE increases to even have a small dent. Check it out: http://bit.ly/zHFA7t

    7. Pete Houston says:

      I think that a surtax for all millionairs that are members of congress and the executive branch would be a good place to start. So Harry Reid and Nancy Pelosi and the rest of the bunch of bums can either put up or shut up.

      • Bobbie says:

        I couldn't agree with you more, Mr. Houston. This mess is all reflective of too much government control and bias for themselves with their corruption and thievery covered. Democrat Government derelict millionaires off the backs of tax payers.

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