If you believe conservative commentators, liberals are a bunch of whining, carping, envious wimps, always complaining about some puffed up abuse of indigents or some other lefty lament. But believe me when I say that no group whines, moans, beats its heads against the wall in torment about a perceived injustice more than the very rich or their champions.
Take the 5.4 percent surtax that is part of the House of Representatives’ health care reform measure, a surtax that would be imposed on those making $1 million a year or more. This 5.4 percent would come out to $54,000 for every million dollars of a high earners’ income.
To hear the anguished cries issuing from the usual defenders of the victimized rich, this additional tax burden in itself is akin to the worst horrors inflicted during the Red Guard era in China. But bad as it is in itself, combined with other tax rates in some parts of the country, the consequences for our own national economy would be devastating. Add this 5.4 percent surcharge to existing highest earner taxes in New York, California or New Jersey, for example, and it adds up to than 47 percent of total income.
This 47 percent assumes, of course, that folks making more than a million a year aren’t smart enough to hire an accountant to do their taxes, or take deductions for things like home interest payments. But let’s forget that for the moment (conservative whiners always do) and work with their numbers instead. You would be left with just $946,000 a year to live on after a 5.4 percent exaction on a million dollars, and in the above mentioned high tax states would have a mere $476,000.
Dear God! Could you live on $476,000 a year? Could I? Could anyone we know? Could we hire that second nanny for our second child? Could we even afford 10 days in the Hamptons? And what about the way this crushing added burden would affect our plans to open a new factory in Duluth that would employ thousands? Or that new DOS system we were about to introduce, but have now decided against doing so because that 5.4 surtax makes it seem not worth the trouble?
Such, in essence, are the arguments against this proposed surtax, and indeed, all new taxes on those who can actually still afford to pay new taxes. The rich, we are told endlessly, have different basic needs than the rest of us, and respond in very different ways to tax stress, We worry about not having a job, or unpaid furloughs from a job we still have. They and their spokespeople worry about personal nanny deficits, lost days in the Hamptons, and diminished incentives to do exactly what they would have done anyway. They also don’t see an increased payment to the government that makes possible health coverage to their less fortunate fellow Americans as something that more than offsets their own crimped spending power.
But hey. I don’t want to seem cruel here. Especially to wealthy unfortunates. So let me make an alternative tax suggestion to this health care surtax. I suggest we simply apply the same Social Security 6.2 percent tax on income paid by all those making $106,800 or less to those making a million or more—while capping maximum Social Security payouts at current levels for these new payers inasmuch as they won’t be forced to live on Social Security in the future anyway.
This isn’t a new tax. It’s also not one of those awful progressive taxes where rich pay more than poor. Everyone would pay the same rate. A kind of flat tax. What could be fairer than that?
If those now whining about a 5.4 percent health care surtax accept this offer, I think we can deal.