The Big Debate: Should We Raise Taxes on the Rich or the Poor?

Fight disinformation: Sign up for the free Mother Jones Daily newsletter and follow the news that matters.


Ezra Klein has said this before, and I’m pretty sure I’ve said it before too—possibly by linking to Ezra saying it—but it bears repeating: Both Democrats and Republicans want to raise taxes on certain people. The main difference is which people they want to raise taxes on:

Democrats do want to raise taxes on families making more than $250,000. You sometimes hear Democrats say they just want to “restore the Clinton-era rates” for these folks, but that’s misleading. In addition to letting the Bush tax cuts expire, the White House wants to add about $700 billion in further tax increases on these taxpayers. And that’s in addition to the high-income taxes passed in the health-care law. Under Obama’s plan, taxes on the richest Americans would be much higher than under the Clinton tax code.

So yes, Democrats want to raise some taxes. But so do Republicans. They want to let the payroll tax cut and the various stimulus tax credits (notably the expansion of the Earned Income Tax Credit and the Child Tax Credit) expire. Those are the tax cuts that primarily help poor and middle-class Americans. In fact, 87.8 percent of the payroll tax cut’s benefits go to taxpayers making less than $200,000 and 99.9 percent of the stimulus tax credits’ benefits go to taxpayers making less than $200,000.

But you want numbers, don’t you? How much do Democrats want to raise taxes on the rich? How much do Republicans want to raise taxes on the poor? This is a little tricky, since the healthcare taxes Ezra mentions are a done deal. They really shouldn’t be counted as part of the fiscal cliff negotiations at all. What’s more, I don’t have numbers for the entirety of Obama’s most recent proposal. However, the Tax Policy Center gives us a good rundown of the major points of contention in the chart below, which I’ve compressed and annotated. Bottom line: allowing the payroll tax cuts and the stimulus tax cuts to expire will raise taxes on the poorest Americans by nearly 3 points. Allowing the high-end Bush tax cuts to expire will raise taxes on the richest Americans by nearly 4 points. Take your pick.

AN IMPORTANT UPDATE

We’re falling behind our online fundraising goals and we can’t sustain coming up short on donations month after month. Perhaps you’ve heard? It is impossibly hard in the news business right now, with layoffs intensifying and fancy new startups and funding going kaput.

The crisis facing journalism and democracy isn’t going away anytime soon. And neither is Mother Jones, our readers, or our unique way of doing in-depth reporting that exists to bring about change.

Which is exactly why, despite the challenges we face, we just took a big gulp and joined forces with The Center for Investigative Reporting, a team of ace journalists who create the amazing podcast and public radio show Reveal.

If you can part with even just a few bucks, please help us pick up the pace of donations. We simply can’t afford to keep falling behind on our fundraising targets month after month.

Editor-in-Chief Clara Jeffery said it well to our team recently, and that team 100 percent includes readers like you who make it all possible: “This is a year to prove that we can pull off this merger, grow our audiences and impact, attract more funding and keep growing. More broadly, it’s a year when the very future of both journalism and democracy is on the line. We have to go for every important story, every reader/listener/viewer, and leave it all on the field. I’m very proud of all the hard work that’s gotten us to this moment, and confident that we can meet it.”

Let’s do this. If you can right now, please support Mother Jones and investigative journalism with an urgently needed donation today.

payment methods

AN IMPORTANT UPDATE

We’re falling behind our online fundraising goals and we can’t sustain coming up short on donations month after month. Perhaps you’ve heard? It is impossibly hard in the news business right now, with layoffs intensifying and fancy new startups and funding going kaput.

The crisis facing journalism and democracy isn’t going away anytime soon. And neither is Mother Jones, our readers, or our unique way of doing in-depth reporting that exists to bring about change.

Which is exactly why, despite the challenges we face, we just took a big gulp and joined forces with The Center for Investigative Reporting, a team of ace journalists who create the amazing podcast and public radio show Reveal.

If you can part with even just a few bucks, please help us pick up the pace of donations. We simply can’t afford to keep falling behind on our fundraising targets month after month.

Editor-in-Chief Clara Jeffery said it well to our team recently, and that team 100 percent includes readers like you who make it all possible: “This is a year to prove that we can pull off this merger, grow our audiences and impact, attract more funding and keep growing. More broadly, it’s a year when the very future of both journalism and democracy is on the line. We have to go for every important story, every reader/listener/viewer, and leave it all on the field. I’m very proud of all the hard work that’s gotten us to this moment, and confident that we can meet it.”

Let’s do this. If you can right now, please support Mother Jones and investigative journalism with an urgently needed donation today.

payment methods

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate