A group of millionaires — the definition of which is any individual with an annual income of over $1,000,000, not a net worth of $1,000,000 — has assembled to let the government know that they’d like the tax cuts for that income level expire, in patriotic duty to the fiscal solvency of the United States.
Less than 1% of all American taxpayers earn over $1,000,000. While a reversion structured like this wouldn’t affect many Americans, relatively speaking, it could go far to reduce the deficit. Use of the term “millionaire” is worrisome; many more people consider themselves millionaires than are reflected by this proposal. A small business owner, with an income of $300,000 a year, may have used that income to amass a nest egg and an expensive house or two, and may value their wealth at a value well over $1,000,000, but this is not who would be affected by this campaign.
Here is the organization‘s call to action:
We are writing to urge you to stand firm against those who would put politics ahead of their country.
For the fiscal health of our nation and the well-being of our fellow citizens, we ask that you allow tax cuts on incomes over $1,000,000 to expire at the end of this year as scheduled.
We make this request as loyal citizens who now or in the past earned an income of $1,000,000 per year or more.
We have done very well over the last several years. Now, during our nation’s moment of need, we are eager to do our fair share. We don’t need more tax cuts, and we understand that cutting our taxes will increase the deficit and the debt burden carried by other taxpayers. The country needs to meet its financial obligations in a just and responsible way.
Letting tax cuts for incomes over $1,000,000 expire, is an important step in that direction.
The often-cited argument for keeping lower tax rates for the rich is trickle-down economic theory, which has never worked as promised in American society. The theory says that if the rich can keep more of their money, they will stimulate the economy by hiring workers for their own companies and investing in other businesses.
That’s not what happens, though, as we’ve seen over the past few years. Companies build up their cash reserves. Again, in theory, this would be a good thing as it allows banks to increase the money supply by lending out more than they’ve accepted in deposits. If the banks aren’t lending to businesses and the middle class, with risk aversion swinging too far to the conservative side, all those tax cuts don’t trickle down anywhere.
It looks like Democrats and Republicans are ready to compromise and extend at least part of the Bush era tax cuts. What do you think of the proposal to allow tax cuts to expire for those earning over $1,000,000 a year?
Updated December 26, 2017 and originally published November 19, 2010.