Annie Lowrey has further thoughts on the politics and policy of a special millionaires tax bracket:
I think we’ll hear a lot more about taxes on millionaires and billionaires in the coming weeks, as Democrats decide which tax packages to move on and then wrangle for Republican votes. One might, might, be able to argue that raising taxes on a family making $250,000 a year does not make sense — particularly if that family is actually a small business. (Though, again, the tax bump would be only a few hundred dollars for a family or business with those earnings.) Millionaires? It will be hard to see Republicans defend them. That is why, again, I would not be surprised to see this rhetorical shift become a literal legislative change.
I think there are good things to be said about making the tax code more progressive. But I do think it’s important to note that it’s dangerous for liberals to embrace the view that revenue should come exclusively from the hyper-rich. For one thing, there’s always a sorites problem around any particular arbitrary number.
But for another thing, there are a lot of tax changes you could make to the tax code that would make the system more progressive that don’t meet the standard of literally placing the entire burden on rich people. For example, if we swapped out the home mortgage interest tax deduction for a reasonable housing tax credit, we’d be making the tax code more progressive. On average, poor people would win and rich people would lose. The government would have more revenue to support middle class programs like Social Security and Medicare, and middle class people would on average be paying the same taxes. But since different families’ financial situations differ, some middle class families would end up paying more taxes and others would pay less.
And that’s generally what will be the case if you go after abusive or misguided tax deductions and loopholes. You’ll raise revenue, you’ll boost growth by making the tax code more efficient, and you’ll be making the tax structure more progressive since these things primarily benefit rich people. But you won’t achieve the pristine standard of not a single dime more in taxes for a single middle class family. That’s a standard that sounds like a nice idea (hence its appeal as a political slogan), but it’s an impediment to a lot of the most sensible approaches to raising revenue.