A recent OpEd in the Los Angeles Times made fun of those silly little tea parties that took place yesterday. A pretty lame piece overall, what struck me most was the way it started. The byline asked, “What, exactly, are the protesters protesting? The marginal tax rate rising 3% for millionaires?”. Without going into the very reasonable grievances expressed at those rallies yesterday (though I’d agree the execution wasn’t the best), I’d like to explore the wonderfully misleading nature of that byline.
The last I checked, one could be considered a millionaire in the U.S. when his or her net worth exceeded $1 million. There are two very important yet subtle points baked into that statement. First, $1 million expressed numerically is $1,000,000. That’s a one followed by six zeroes. Second, one’s net worth is basically the sum of one’s hard (land, cars) and soft (stocks, bonds, cash) assets minus one’s liabilities (debt).
So let’s now look at Obama’s proposed tax hike on the “rich”. His plan calls for those individuals making more than $200,000 per year ($250,000 for couples) to have their income tax rate increase from 35% to 39.6%. Now try to reconcile that with the byline above. Never mind, I’ll do it for you. For one, people making $200,000 per year are by no means millionaires by default. Indeed, they could very well have net worths substantially below $1 million. That’s a common misconception that doesn’t get corrected enough. And I’m not sure who decided that $200,000 in gross income qualifies as “rich”. My guess is that a survey of those individuals would reveal that many of them consider themselves middle class or upper middle class – certainly not rich. And regarding the hike itself, the actual increase looks to be 4.6% instead of the 3% the title indicates.
Similarly distasteful in the mislabeling department is the “millionaire’s tax” that is about to be imposed on New Yorkers earning more than $200,000 per year ($300,000 for couples).
Making such liberal use of the word “millionaire” appears to be part of a marketing campaign designed to paint these earners as filthy rich and thus less impacted by an increase in their tax rates. As Obama would say himself, they can afford it. But, Mr. President, an annual salary on its own does not a millionaire make!
Fair enough, the op-ed was bogus. But do you haul in more than $250,000 a year? How about those who were out in the streets yesterday, how many of them fell into that category.
Those that were there to protest deficits, debt, TARP and bailouts, I get. Though I would have to ask, if the deficits and debt are such a big deal to these folks, where were they for the last 8 years?
I agree wholeheartedly that there is a fair amount of hypocrisy baked into conservatives’ newfound religion when it comes to fiscal responsibility. At a higher level, my beef is with the tax structure as a whole. The productive subsidizing the unproductive isn’t fair by any stretch in my view. We all take from the system (in the form of roads, military, police, etc.), so we should all pay something in return. Instead, 50% of the population pays nothing yet enjoys those social benefits nonetheless. And who’s to say what’s fair for the “rich” to pay? Joe Biden? No thanks.
I think people making $200,000 or more a year should form a union. This would at best, allow the group many perks and protections and at worst, confuse the current administration until the next election.