Steve Bannon is causing a stir inside the administration by pushing an idea that’s anathema to most Republicans: raising taxes on the wealthiest Americans to pay for steep middle and working-class tax cuts. (Some officials who’ve heard Bannon’s idea think it’s crazy, but the President’s chief strategist believes it’s a potent populist idea.)
Bannon has told colleagues he wants the top income tax bracket to “have a 4 in front of it.” (The top bracket is currently 39.6% for Americans who earn more than $418,400.)
I’m actually not too much opposed to this, depending on how it would be implemented. Under Obama, Bush, and Clinton, the amount of wealth in the upper income ranges grew dramatically while middle-class and working class incomes stagnated (and in many cases declined). Most of those affluent people vote for Democrats, so maybe they should get what’s coming to them. Good and hard.
There are a lot of ways to accomplish this ends through tax reform without dramatically raising rates on the uppermost levels of income. For example, the elimination of the deduction for state and local taxes would primarily hit upper income levels in blue states like New York and California. There are all kinds of other carve outs in the tax code that could be also eliminated. Were it up to me, I’d deep-six all deductions except for mortgage interest on your primary residence, and charitable contributions. Of course, were it up to me, there’d be just a flat income tax and a consumption tax. No one listens to Zathros.
Under our current system, taxes are paid primarily by people who aren’t poor enough to avoid them and aren’t rich enough to evade them. This, above all else, is what needs fixing.