Mulvaney acknowledged that his proposal would likely be seen as unpopular — especially as the election season approaches — because it would impose some level of tax on millions of workers.
Still, some Republicans have made similar calls to ensure that all employed people pay some income tax. They have argued that the current system only encourages people who don’t pay income taxes to vote for federal policies that encourage more federal spending, even in the face of a $1 trillion budget deficit.
The Heritage Foundation this week announced the results of a study that shows nearly half of all working Americans, 49.5 percent, pay no income taxes.
Mulvaney’s proposal stands in direct contrast to that of Democrats, who have argued for the last year that Republicans can get closer to a balanced budget if they work with Democrats to both cut spending and increase taxes on higher-income earners.
Senate Democrats have tried several times this year to raise taxes on annual income higher than $1 million, which some have cast as a “surcharge” on the wealthy to pay for various government priorities. But House Republicans have so far beaten back those proposals.
In the most recent tax battle, Republicans opted to extend the payroll tax holiday without paying for it at all rather than paying for it with a tax increase on the wealthy. Other aspects of that bill, which also extended unemployment insurance and avoided cuts to Medicare physicians’ payments, were paid for in part by requiring new federal workers to contribute more to their retirement plans.