Republican congressman proposes millionaire tax in exchange for balanced budget


Freshman Republican Rick Crawford of Arkansas has announced he will introduce legislation to offer tax-hungry Democrats a 5 percent surtax on millionaires – by which he means people who actually have income over $1 million per year, not the highly flexible Democrat definition of “millionaire.”  This fresh new revenue stream would be uncorked only after Democrats and Republicans pass, not merely vote upon, a Balanced Budget Amendment.

In keeping with the perfectly bipartisan tradition of giving absurdly manipulative names to legislation, Crawford’s bill is called the “Shared Responsibility in Preserving America’s Future Act.”  Thus does the extraction of more tax revenue from American citizens become equated with the awesome “responsibility” that Congress would demonstrate by merely doing its job, and spending no more money than it takes in, outside of major national emergencies. 

Maybe Crawford should have gone for broke and named his bill the “Stop Handing Our Children the Bill For Your Irresponsible Spending Binges Act.”  That, of course, would have sacrificed the bipartisan spirit he’s shooting for, since only one American political party even pretends to care about crushing future generations under massive debt burdens… and their pretense is not always convincing.

In an interview with Arkansas ABC affiliate KAIT, Crawford explained his bipartisan thinking:

“The balanced budget amendment is supported by roughly 75% of Americans. The millionaire’s tax, roughly 65% of Americans, so you’ve got one side saying, ‘Let’s tax millionaires,’ the other saying, ‘Let’s do a balanced budget amendment.’ So my bill basically brings the two together, and says ‘Let’s compromise,’ Crawford said.  “We’re talking about some pretty important issues here in our country. We are almost $16-trillion in debt and we certainly need to cut spending, but the real thing that I think would move our country forward measurably is that if we have the fundamental reform so that Congress can’t put us into this position again.”

Crawford said his bill also includes provisions for small business owners. He said party politics have played a role in how Congress has addressed the issue in the past. He said his bill, if approved, would not affect a majority of Americans.

“My biggest concern is that we don’t see marginal rates increased for every taxpayer,” said Crawford. This is a very clear deal, 5% on income above $1-million and small business exemptions. If you’re a small business and you’ve got at least one employee, there’s an exemption there.”

As the International Business Times points out, Crawford previously signed the Taxpayer Protection Pledge, which obliges him to “oppose any and all efforts to increase the marginal income tax rate for individuals and businesses.”  His proposal is a fairly clear violation of that pledge.

The IBT also notes that Crawford rolled into office on the Tea Party wave, and is “the first Republican elected to represent Arkansas’ First Congressional District since Reconstruction,” so his perception of “bipartisanship” might be somewhat different than if he held a safer, redder seat.

But putting such electoral considerations aside, Crawford is hardly the first person to adopt this “something’s gotta give” attitude.  Perhaps he knows Democrats would never accept the deal he’s offering, no matter how much they babble about needing more taxes on the Evil Rich to achieve fiscal sanity, and he wants to prove a point by obliging them to vote against his bill.

He’s also not the first Republican to put tax increases on the table in exchange for fiscal restraint from the Democrats, and he wouldn’t be the first Charlie Brown to end up flat on his back when the deficit-reduction football was pulled away at the last second.  Coincidentally, when writing about inflation the other day, I came across the speech Gerald Ford delivered when launching his “Whip Inflation Now” initiative in 1975, and he made exactly the same “bipartisan” offer Crawford is making now: a surtax on high income earners, in exchange for federal spending caps to reduce the deficit.  

Ronald Reagan offered the Democrats tax increases in exchange for spending cuts, and was promptly stabbed in the back.  Much the same thing happened to his successor, the first President Bush.  He won office inviting everyone to read his lips, and understand how inalterably opposed to tax increases he was.  Later, he put tax increases on the table in a deal to reduce the deficit.  The deficit soared ever upwards, and here we are, with President Barack Obama adding a staggering $6 trillion and counting to the national debt in less than one full term.

In a press release, Rep. Crawford notes that “the era of yearly trillion-dollar deficits is unsustainable.”  He’s certainly right about that, but it’s extremely dangerous to sustain the Democrat fantasy that their irresponsible spending can somehow be balanced by hiking taxes on a small, faceless group of “millionaires and billionaires.”  Republicans who offer packages of tax increases and spending cuts are implicitly conceding that Americans aren’t taxed quite enough yet, and the government has a duty to squeeze a little more blood out of job creators.  Since they’ll never actually get Democrats to agree to a balanced budget, they’re just volunteering themselves for duty in liberal talking points about how “even Tea Party Republicans agree that taxes should be raised.”

Crawford’s tax increase plan also feeds into class-warfare rhetoric by providing an exemption for millionaire small-business owners.  Who’s earning over a million dollars a year without owning a small business with at least one employee?  Investors and CEOs?  The “idle rich?”  One suspects the number of millionaires who suddenly own small businesses with at least one employee would sharply increase, in the face of Crawford’s surtax.  That’s not the right way to stimulate health small-business formation.

In his KAIT interview, Crawford also mentions that his tax would “go away after 10 years” due to a sunset provision.  Does he really think the Democrats would allow a tax on millionaires to expire, especially if they had already agreed to pass nothing but balanced budgets forever?  Just imagine what the arguments against allowing that tax, or any other, to “sunset” would be like.

A Balanced Budget Amendment is a potentially hazardous instrument for demanding fiscal balance, unless it’s accompanied by other vital measures, as in the Cut, Cap & Balance Act.  Merely requiring a balanced budget, without cast-iron spending caps, creates a legislative cudgel for endless tax increases… and they most certainly will not be restricted to “millionaires.”

Anyone serious about pursuing “bipartisan” solutions to the deficit needs to understand that Democrats are deeply opposed to the notion of a balanced budget amendment.  They want money to spend, they want government to grow, and they spend a great deal of time assuring each other that requiring the government to live within its means would somehow destroy the U.S. economy.  (I’m not kidding.  Look for the discussion of balanced budget amendments on any liberal website.  They seriously believe that balancing the federal budget is objectively dangerous, no matter what exceptions for genuine national emergencies are included in the amendment.)

Let me put it simply: the Democrat Party will never come anywhere near balancing the federal budget.  No inducement will be sufficient to get them on board.  Even if you offered to cover all current spending with $1.3 trillion in immediate tax increases – which would completely shut down the American economy, in a “food riots” kind of way – they would not accept a firm requirement to avoid red ink in the future.  Forgetting this essential truth is not bipartisanship, it’s daydreaming.