The million-dollar tax bracket is on the table – it should go back onto the books
People in Maryland and across the nation are angry and frustrated with the continued lack of jobs in the US economy. The
“Occupy WallStreet” protest will soon be entering its fourth week.
I visited Occupy Baltimore on Friday, its third day in the city. The folks there say they are prepared to continue their protest for the long haul. They are upset that ordinary people can’t find jobs, while big banks and oil companies are earning record profits. They are upset that these big businesses and the richest 1% of individuals get tax breaks while ordinary Marylanders suffer from cuts in vital services.
They also point to many other problems: racial double standards in the criminal justice system, the lack of affordable housing, members of Congress and other public officials who are out of touch with struggling Marylanders. There is a gusher of dissatisfaction.
I asked some of the protesters, “What do you want to have happen as a result of this demonstration?” The answers were “I want change.” And “I want the big banks to give us our money back.” They have a sense that neither prosperity nor sacrifice are being shared equitably, that corporate executives and investors are enjoying a recovery while the great majority of ordinary Marylanders remain in an extended recession.
They are right.
The Capital News Service recently ran a s
tory by JeffBenzing about millionaires being “stung” by proposals to increase taxes on high-income earners.Benzing quotes Washington Wizards and Capitals owner Ted Leonsis as saying, “business leaders and anyone who has achieved success in terms of rank or fiscal success is being cast as a bad guy in a black hat.” I do think that the Occupy Baltimore protesters I spoke to are reacting in that way.
But the real case for requiring the top earners and the big corporations to help balance the state budget and reduce the federal deficit is not about punishing anyone. It’s about everyone pulling their weight. As Benzing quotes me: “Those who are doing the best ought to be paying the larger part.” Millionaires should pay their fair share for the public structures and services that help make their success possible.
A recent
report from our friends at“United for a Fair Economy” helps to illustrate the impact. Marylanders with incomes over $107,000 pay an average of 7.3% of what they make a year in state and local income, sales and property tax. People with incomes under $22,000 -- about the poverty level for a family of four -- pay
9.9% of what they make. What if the two groups traded tax rates? And what if the second-richest (with a 9% average state an local tax rate) and the second-poorest fifth (10% of income for state and local taxes) also traded rates? The result would be that state, county and city governments in Maryland would have an additional $5.3 billion a year for education, healthcare, roads and transit, workforce training, and other needs – all of which would help create jobs and build a strong economy.
To move towards this goal, Maryland should reinstate the additional ¾% tax on income over $1 million that was in effect for three years and expired in 2010. And it should plug loopholes in corporation income taxes. It should also help low-wage workers by expanding the state earned income tax credit and giving income tax refunds to offset the disproportionate sales taxes paid by families with poverty and near-poverty wage levels.
The energy and enthusiasm at Occupy Baltimore is as tangible as the anger and frustration. Let’s channel it into positive policy change that will make Maryland a more prosperous state.
