This morning, as part of his broader deficit reduction plan, President Obama called for a new rule that would raise taxes on the the wealthiest Americans. The proposal was quick to spark reaction from Republicans, who labeled it “class warfare.”
But politics aside, we thought it would be helpful to run through what’s actually known about the proposal, the impact it might have on the deficit, and the history behind it all.
So what, exactly, is the plan?
President Obama’s plan would require households making more than $1 million annually — and the president is one of them — to pay a certain minimum percentage in taxes that matches the rate at which middle-class households are taxed. (Think of it as a simpler version of the overly complicated alternative minimum tax, which was enacted to ensure that even with their many deductions, rich taxpayers still paid a minimum percentage in income taxes.)
Are there any more details?
Nope. The White House has left it quite vague. In fact, it’s unclear how serious the proposal is at this stage.
The president hasn’t yet specified at what rate the millionaires should be taxed. And as the New York Times puts it, administration officials have said that the plan is more of a guiding principle for negotiations. Indeed, they haven’t included its potential ...