Schumer on taxes: 'High-end people are not the whole answer to the problem'

Sen. Charles Schumer (D-N.Y.), a vocal advocate for President Obama's proposed "Buffett Rule" that would raise tax rates for millionaires on investment income to mirror rates owed from personal income, acknowledged Monday that the plan would not be enough to balance the country's budget. But Schumer said the proposal was "a question simply of fairness" and maintained there was "no class warfare involved" during an interview with CBS News.

Schumer was asked to respond to a statement by New York City Mayor Michael Bloomberg, who noted that because most of the country was part of the middle class, a tax hike on the richest would only "get you halfway to a balanced budget — everybody's taxes have to go up."

The senator then acknowledged "it is true that, you know, the high-end people are not the whole answer to the problem."

Still, the New York lawmaker said it was fair to ask the wealthiest to contribute more when middle-class families were struggling — especially when the richest Americans were securing a greater proportion of the nation's wealth than they had in the past. He also dismissed conservative claims that Democrats were politicizing the issue and targeting the wealthy to earn populist credibility for November.

"You know, this is such a bogus argument," Schumer said. "We have believed as a country that higher-income people should pay a higher percentage of income since the 16th Amendment, which was 1912. It came in with Woodrow Wilson and the progressives. And, you know, some of the people who, I guess, believe that the way to get this economy going is reduce taxes on the wealthiest people make that argument, but there's no class warfare involved. It's a question simply of fairness."

Schumer added that most of those who would be affected by the tax increases likely believed that the increase was the fair thing to do, but that their silent majority was overshadowed by those who were anti-tax and contributed heavily to political action committees.

"So if you don't want to do more deficit spending, and there's a consensus there, you've got to find the money somewhere, and this is a logical place to do it. But no question, Bloomberg is right, it's not going to answer the whole question. That's not an argument against it. You've got to start somewhere," Schumer said.

The senator also touched on his proposal to require airlines to disclose fees charged for carry-on bags when quoting the total cost of tickets. Last week, Schumer sent a letter asking the Department of Transportation to consider such a rule after Allegiant Air — a discount airline that provides service between regional airports — announced that it would begin charging travelers between $10 and $35 for bags that need to be stored in overhead compartments. Those fees are in addition to the fees that Allegiant — like other major carriers — charge for checked baggage that the airline handles.

"Look, what's happened is there's competition in the airlines because of the Internet. You can go on and find out the best costs. So they try to hide the fees in other places. … But when you go online they'll say the price of the ticket's $300. Now, if for each bag you carry on it's another $50, that raises the price a lot," Schumer said.

"So the only thing we're asking for right now, we've asked — I've asked all the airlines to make a commitment not to charge for carry-on baggage. The big airlines, to their credit, have made that commitment. But the smaller airlines are doing it. We can't stop them. I don't think we should pass legislation for this."

Allegiant pushed back in a letter sent to Schumer on Monday, arguing that its travelers don't necessarily carry bags on during every flight — and appreciate the flexibility its policy offers.

"I can’t think of a better example than the above to illustrate why government-imposed, one-size-fits-all solutions do not work," said Allegiant CEO Maurice Gallagher in the letter. "Allegiant has built a travel experience that provides customers with our lowest possible airfares and empowers them to choose the options that meet their needs and their budget, so that more people can afford to travel. This philosophy recognizes that not all travelers are the same and that people should not be forced to pay for options they do not need or want."

---