5 Reasons a Millionaire Tax is Dumb

5 Reasons a Millionaire Tax is Dumb

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Howard Gleckman of TaxVox writes in The Democrats Millionaire Tax: Smart Politics, Awful Policy:

Senate Democratic Leader Harry Reid’s plan to fund a $445 billion stimulus, err, jobs bill with a 5.6 percent surtax on millionaires is not all bad. After all, Tax the Rich does make a nice campaign bumper-sticker. But it is mostly bad.

Gleckman then gives 5 reasons in support of this conclusion. Here is the main thrust of each of those reasons:

    1. It perpetuates the dangerous myth that we can address our fiscal problems by taxing only a handful of rich people.
    2. If we are going to get serious about the deficit, people making $200,000 (or even $100,000) have got to help out.
    3. The Ds can set a top rate approaching 50 percent. But here is a clue: Rich people won’t pay it. They will, however, pay their accountants to help them game the system.
    4. Imagine what will happen to the stock market in 2012 as investors scramble to beat the 2013 [capital gains] tax hike. Just what we need: more volatility.
    5. Perversely, these high rates would wreck efforts to clean up the tax code. With rates this high, the political pressure to protect tax preferences will be enormous.

Make sure you read Gleckman’s entire post.

About Peter Pappas

Peter is a tax attorney and certified public acccountant with over 20 years experience helping taxpayers resolve their IRS and state tax problems.

He has represented thousands of taxpayers who have been experiencing difficulty dealing with the Internal Revenue Service or State tax officials.

He is a member of the American Association of Attorney-Certified Public Accountants, the Florida Bar Association and The Florida Institute of Certified Public Accountants and is admitted to practice before the United States Tax Court, the United States Supreme Court, U.S. District Courts - Middle District of Florida