Sen. Carl Levin Urges Tax Increase for Millionaires

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Joann M. Weiner

Contributor
Posted:
10/22/09
It's not often that an elected official is applauded when he promises to raise taxes. But that's exactly what happened in Washington on Wednesday night when Democratic Sen. Carl Levin of Michigan said, "We ought to have a 3 percent surcharge on those who make more than a million dollars."

Levin's call was cheered by the 100-plus attendees at the Royal Phoenix Hotel to celebrate the 30th anniversary of Citizens for Tax Justice (CTJ) and to recognize the achievements of its director, Robert McIntyre.

Levin's statement did not come out of the blue. He was speaking to honor the work of a nonpartisan research and advocacy group with a long and proud history of fighting for fairness in taxation. As Levin said, "CTJ has been a voice for fairness and a voice for those who believe that closing special-interest loopholes is essential not only for tax justice but for justice in general."



Bringing that about is difficult, as Levin recognized. "The odds are against us" he said. As an example, he cited the obstacles faced by the Senate's Permanent Subcommittee on Investigations as it tries to shut down abusive offshore tax shelters that abet tax evasion.

"These tax havens siphon off some $100 billion in revenue each year" from the Treasury, said Levin, who chairs the Senate committee. "Yet, the Congressional Budget Office scores our proposal as raising about $20.95."

That joke aside, Levin said he'll work with the Senate Finance Committee to find ways to fund the overhaul of health care coverage, offering one specific plan to raise revenue: "We should have a 3 percent surcharge on incomes above $1 million. We need to collect those revenues so that we can create a health care bill that has adequate funding."

Sen. Ron Wyden (D-Ore.) focused on a slightly different aspect of the tax problem -- loopholes that grant far too many tax breaks.

"Everybody knows that there are a gazillion tax breaks out there for everything from buggy whips to rock stars," Wyden said, asserting that "more than 10,000 tax breaks have been added to the code" since the 1986 Tax Reform Act.

Noting that Citizens for Tax Justice had played a crucial role in that milestone overhaul of the tax code, Wyden seemed to be calling on CTJ to take up the reins once again.

"There was a book written about tax reform called 'Showdown at Gucci Gulch' that revealed the tense negotiations that went into the bill that eventually became the historic tax reform act. Twenty years ago, Bob McIntyre was the sheriff who cleaned out Dodge City," Wyden said.

Rounding out the program, Rep. Lloyd Doggett (D-Tex.) said that "in 33 months of Democratic control [of Congress], I have not seen a greater interest in going after tax breaks in the tax code" than now. Doggett revealed his populist streak, saying that it is time to "go after the abuses," such as "Goldman Sachs paying a 1 percent effective tax rate" because it is able to strategically distribute its income across geographic locations.

CTJ came to prominence in 1984 when President Reagan was told by his Treasury secretary that a former employer's "secretary paid more in federal taxes last year than all of those giant companies [General Electric and dozens of other major corporations] put together." That charge eventually led to the historic Tax Reform Act, which brought about an unprecedented broadening of the tax base, tax-rate reductions (top individual rates were cut from a nominal 50 percent rate to 28 percent, and corporate tax rates were cut from a top 48 percent to 34 percent) and the elimination of preferences and loopholes that had appeared in the code since the federal income tax was created in 1913.