$1M not equal to $250K(Read article summary)
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
Pablo Martinez Monsivais/AP
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.