Democrats unveil proposal for 'millionaires surtax'

Democrats unveil proposal for 'millionaires surtax'
© Greg Nash

Rep. Don Beyer (D-Va.) and Sen. Chris Van HollenChristopher (Chris) Van HollenOvernight Defense: Lawmakers call for probe into aircraft carrier captain's firing | Sailors cheer ousted commander | Hospital ship to ease screening process for patients Lawmakers call for investigation into aircraft carrier captain's firing Lawmakers call for unemployment benefits for evacuated Peace Corps volunteers MORE (D-Md.) on Thursday rolled out a proposal for a “millionaires surtax,” amid a growing interest from Democrats in increasing taxes on the wealthy.

“This is a bill designed to address two major problems of public policy: the lack of revenue, and inequality,” Beyer said on a call with reporters. “It’s a laser-focused solution that requires those who benefited the most from the economy to contribute in a way they simply haven’t been asked to before.”

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The lawmakers’ bill, which is being co-sponsored by Sen. Sherrod BrownSherrod Campbell BrownDemocrats urge administration to automatically issue coronavirus checks to more people Lawmakers press IRS to get coronavirus checks to seniors Democrats press Mnuchin to defend T coronavirus stimulus IG MORE (D-Ohio), would create a 10 percentage point surtax on all income above $2 million for married couples and $1 million for single tax filers. 

The surtax would result in the top tax rate on income from wages and salaries increasing from 37 percent to 47 percent, plus a 3.8 percent Medicare surtax. It would result in the top rate on capital gains increasing from 20 percent to 30 percent, plus a 3.8 percent net investment tax.

The Tax Policy Center, a joint project of the Urban Institute and the Brookings Institution, has estimated that such a surtax would raise nearly $635 billion over 10 years.

“This is revenue generated that we can then invest in helping other Americans succeed,” Van Hollen said.

The release of Beyer and Van Hollen’s proposal comes as Democratic presidential candidates and lawmakers have been offering a host of proposal to tax the rich more in order to combat inequality and raise revenue to pay for spending priorities. Of note, Sens. Elizabeth WarrenElizabeth WarrenOvernight Health Care: CDC recommends face coverings in public | Resistance to social distancing sparks new worries | Controversy over change of national stockpile definition | McConnell signals fourth coronavirus bill Democratic senators want probe into change of national stockpile description Democrats ask EPA, Interior to pause rulemaking amid coronavirus MORE (D-Mass.) and Bernie SandersBernie SandersOvernight Energy: Oil giants meet with Trump at White House | Interior extends tenure of controversial land management chief | Oil prices tick up on hopes of Russia-Saudi deal Oil giants meet at White House amid talk of buying strategic reserves The Hill's Campaign Report: Biden struggles to stay in the spotlight MORE (I-Vt.), who are both running for president, have proposed wealth taxes on multimillionaires and billionaires.

Van Hollen said his proposal isn’t “in conflict” with other tax-the-rich proposals, and that the surtax proposal “will become part of that broader debate.”

Beyer said there has been a debate about whether a wealth tax would be constitutional, but there shouldn’t be any constitutional issues with their surtax. He also said that the surtax proposal was simpler than a wealth tax.

The “millionaires surtax” proposal is backed by progressive tax groups such as the Patriotic Millionaires and Americans for Tax Fairness. Supporters of the proposal have released a calculator that allows people to see what the revenue raised by the surtax could fully or partially fund.

Supporters of the proposal also released polling data from Hart Research that found that 73 percent of voters would support a Democratic proposal creating such a surtax — including a majority of Republicans and of those who voted for President TrumpDonald John TrumpTrump fires intelligence community inspector general who flagged Ukraine whistleblower complaint Trump organization has laid off over 1000 employees due to pandemic: report Trump invokes Defense Production Act to prevent export of surgical masks, gloves MORE.