Robert Reich: A Surtax is Fair and Easy

[flpoljunkie]

A Surtax is Fair and Easy

Robert Reich, a professor at the Goldman School of Public Policy at the University of California at Berkeley, was secretary of labor in the Clinton administration. He is the author, most recently, of “Supercapitalism,” and he blogs at Robert Reich’s Blog.

A surtax on high-end taxpayers isn’t ideal — I’d prefer capping tax-free employer-provided health benefits or limiting deductions for the very rich — but a surtax isn’t all that bad, either. In fact, it has three big virtues.

First, it’s fair. According to the most recent data (for 2007), the wealthiest 1 percent of American households take home about 20 percent of total income — the highest percentage since 1928.

Taxing employer-provided health benefits would be even less popular.

Of course, those opposed to higher taxes will say that these are the very people who invest, hire and keep the economy going. So raising their taxes will burden the economy and hurt those who are supposed to be helped. But there’s no reason to suppose that taking a tiny sliver of the incomes of the top 1 percent will reduce all that much of their economic ardor. If a surtax makes affordable health care possible for a larger number of Americans, who will then be able to stay healthy and productive, the positive effect on the American economy is likely to be far greater.

Second virtue: A surtax is relatively easy to administer. Third virtue (never to be underestimated): It’s easy to understand.

Will it hurt Democrats politically? Not as much as taxing employer-provided health benefits (labor hates this) or limiting the tax deductions of the wealthy (every nonprofit that depends on contributions from the wealthy is lined up against this one).

Besides, most taxpayers in the top 1 percent of earnings are located in safely Democratic precincts like New York, San Francisco, and L.A. anyway.

http://roomfordebate.blogs.nytimes.com/2009/07/20/should-the-rich-pay-for-the-uninsured/

[Rosa Luxemburg]

1. one can pay this 'donation' through our salary

like they do in the UK.