Any plan to tax me and my fellow wealthy Americans needs to be relatively easy to enact and relatively hard to avoid. The "millionaires surtax," which was recently introduced in Congress, hits both targets.
This tax would simply add 10 percentage points to the existing tax rates paid by couples making over $2 million a year and singles making over a million. Though it would only apply to the wealthiest 0.2 percent of taxpayers like me (or about 330,000 taxpayers) the millionaires surtax would raise an estimated $635 billion over 10 years, according to the Tax Policy Center.
We can use that money to help shore up Social Security, Medicare and Medicaid or expand health care, improve education, fix our infrastructure, defend our planet from climate change or better fund many other public services and investments vital to non-wealthy Americans.
One big reason this tax would bring in so much revenue even though 99.8 percent of American households won’t pay a nickel extra is that it would apply both to regular income (like salaries and private business income) and to all investment income, including capital gains and dividends.
You may have heard about other tax plans from Democratic presidential candidates. Many have merit and I support them, but unlike the millionaires surtax they almost all involve a major new and sometimes complicated tax or overhaul of the existing tax system.
The more novel and complicated a plan is, the easier it is for the wealthy to kill it. And even if it does become law, complexity gives rich taxpayers more ways to avoid paying their fair share.
The millionaires surtax, in contrast, simply builds on the existing tax structure, so no one can claim it’s unworkable or unconstitutional. It’s easy to understand, explain and implement, and in the midst of our deep political divide, a progressive tax plan with a decent shot at attracting bipartisan support.
You may well ask: Why would anyone push to pay higher taxes, like I’m doing by supporting the millionaires surtax? It’s because I know it’s not actually in my long-term economic interests for the United States to become more and more like a developing nation, with a tiny elite at the top of the mountain and everybody else struggling for a foothold.
Plus, I’m not just a rich person — I’m a citizen with a duty to try to redirect my country when I know it’s on the wrong track.
The millionaires surtax is a good first step on a better path.
Morris Pearl, a former managing director at Blackrock, Inc., is chair of the Patriotic Millionaires.