Now the Republicans are turning millionaires into punching bags, too. That’s the news emerging from a series of moves by leading Republicans. It suggests that, after seeing President Obama’s success in 2012 with a campaign to raise taxes on millionaires and billionaires and depict Mitt Romney as an out-of-touch rich guy, the Republican Party is preparing to mount a class warfare campaign of its own.
In recent weeks:
•Senator Coburn, a Republican of Oklahoma, issued a press release heralding a 100 to 0 Senate vote to end childcare subsidies to families whose assets exceed $1 million. “Senate says no to childcare handouts for millionaires,” the release blared.
• Senate Republicans backed a deal to extend federal unemployment benefits, but as a condition they insisted that the government stop paying unemployment benefits to anyone whose adjusted gross income is more than $1 million a year.
• The Republican governor of Wisconsin, Scott Walker, a possible 2016 presidential contender, passed an income tax cut package. It did nothing to reduce the state’s top marginal income tax rate of 7.75%, which applies to couples who earn more than about $315,000 a year. Instead it reduced the lowest income tax bracket, which applies to the first $14,000 or so of income for a couple, to 4 percent from 4.4 percent.
• The Republican chairman of the House Ways and Means Committee, Dave Camp, proposed a 25 percent surtax on nonprofit organizations that pay individual employees more than $1 million a year.
• The influential center-right journal National Affairs published an article calling for reducing the home mortgage tax deduction via “reforms that reduce the benefit to upper-income taxpayers.” The article, co-authored by a fellow of the George W. Bush Institute, suggested lowering the limit on mortgage deductibility from the current $1 million level and eliminating the ability now provided in the law to take a tax deduction for a mortgage on a vacation home.
In a press release hailing the unemployment deal, Senator Coburn said, “Eliminating subsidies of the rich and famous in these and other programs is just one of the commonsense approaches Congress should be making to return commonsense to Washington's out of control budget that continues to spend money we do not have on things we do not need.”
On the unemployment issue, Mr. Coburn was joined by a host of other Republican senators, including Senators McCain, Portman, Heller, Collins, Kirk, and Murkowski.
Ordinarily, reducing government spending and subsidies would be a good thing. But there are plenty of reasons to be concerned about the Republicans joining the Democrats in piling on against the rich.
First of all, there’s a certain ugly element of a majority ganging up on a minority. That’s what successful businessmen like Kenneth Langone, Tom Perkins, and Steve Schwarzman are getting at, however clumsily, when they say the current political climate reminds them in some ways of Nazi Germany.
Second of all, on unemployment, no one is talking about letting $1 million earners or their employers opt out of paying unemployment taxes or premiums, or refunding them the taxes or premiums they have already paid. It’s just the benefits that are being taken away.
What’s next? Is the government going to take away Social Security or Medicare payments for which wealthy seniors have already paid taxes? Plenty of politicians want to do exactly that. I’m waiting for a politician, Republican or Democrat, to come out and propose special toll lanes on Interstate Highways with higher rates for cars with millionaire passengers. It’s the logical next step, followed by higher postage stamp rates for millionaire Christmas-card senders and higher passport fees for millionaire tourists and international business travelers.
Sure, one can argue that the value of the Social Security and Medicare benefits are worth a lot more than value of the premiums. But isn’t there some value, too, in the notion that we’re all in this together, in the idea that the government should treat everyone equally rather than picking some groups with incomes and assets to favor and other groups to milk, then punish?
A lot of millionaires got that way by working hard and providing something of value to customers. That doesn’t mean they should be immune from criticism or cutbacks. But we’d all be better off if the politicians from both parties spent more time and energy trying to create conditions that create more millionaires, rather than dreaming up new ways to punish the existing ones by taking stuff away from them.
Mr. Stoll is editor of FutureOfCapitalism.com.