Ill. pol to revive millionaire tax debate

A leading liberal House Democrat will introduce a bill Thursday to hike taxes on millionaires, arguing it is needed to battle issues of inequality while pushing back against the idea that the country faces a fiscal crisis.

Rep. Jan Schakowsky (D-Ill.), the chief deputy whip, said too much attention is being paid to trying to bring down deficits and curb the growth in debt.


“The crisis that we face in this country is a crisis of equality,” she said at POLITICO's Emerging Tax Leaders event on Thursday. “I don’t believe we have a huge deficit problem; I don’t think we have a scarcity problem. We have a problem of inequality.”

The proposal is dead on arrival in the GOP-controlled House, but it represents a continuing concern among liberals that the debate in Washington is focusing on how to cut spending, particularly in programs such as Medicare and Social Security, rather than boosting taxes on the wealthy.

Schakowsky said she wants to “start the conversation as what I see as major crisis in the United States: The fact that we have this growing concentration of wealth at the top. ... Ordinary Americans have not seen their incomes grow for decades.”

Wealth concentration has political ramifications, she argued — pointing to the controversial Citizens United v. Federal Election Commission Supreme Court case that barred the government from capping certain political spending.

“You empower millionaires and billionaires to influence the system,” she said.

She argued her proposal would even that out.

Known as the Fairness in Taxation Act, her bill would increase the top rate from the current 39.6 percent rate to 45 percent for people earning between $1 million and $10 million; 46 percent for those making $10 million to $20 million; 47 percent for earnings between $20 million and $100 million; 48 percent for those making $100 million to $1 billion; and 49 percent for anyone earning more than $1 billion.

Those rates “are lower than what they were in the [President Ronald] Reagan years,” she said.

It would also tax capital gains and dividends as ordinary income for millionaires and billionaires.

Schakowsky’s office estimates the legislation would raise between $785 billion and $849 billion for the Treasury in the next 10 years, but those numbers include behavioral assumptions and calculations from the left-leaning Citizens for Tax Justice as opposed to the Joint Committee on Taxation, the congressional scorekeeper for tax proposals.

This article first appeared on POLITICO Pro at 9:56 a.m. on April 25, 2013.

CORRECTION: A previous version of this story misstated the amount the legislation would raise based on incorrect information from Schakowsky's office. The bill would raise between $785 billion and $849 billion over 10 years.

CORRECTION: Corrected by: Andrea Drusch @ 04/25/2013 11:25 AM CORRECTION: A previous version of this story misstated the amount the legislation would raise based on incorrect information from Schakowsky's office. The bill would raise between $785 billion and $849 billion over 10 years.