Americans like the idea of taxing the rich. A new Politico/Morning Consult survey finds that 61 percent of Americans favor a “wealth tax” on those earning more than $50 million a year. Democratic presidential candidate Sen. Elizabeth Warren has proposed such a tax. Meanwhile, 45 percent of Americans support a 70 percent marginal tax rate on annual income over $10 million. Rep. Alexandria Ocasio-Cortez has proposed such a levy.
But there are better ways to tax the rich. TPC’s Howard Gleckman outlines a better alternative to taxing the wealthy. “Tax inherited wealth more efficiently,” and stop giving heirs of large estates a way to avoid tax on trillions of dollars of capital gains. It is easier to administer and is a relatively modest change to existing law. And it taxes only inherited wealth, not earned wealth.
Ready for the State of Union? Thanks to the government shutdown, it will be a week late but never fear, it isn’t likely to include much about taxes anyway. The White House promises that tonight’s speech will include a renewed call for an infrastructure bill, but there is no sign the president will offer a way to pay for it. And financing always has been the sticking point.
The municipal bond market might like high taxes on the rich. Bloomberg explains that higher tax rates on those with higher incomes tend to favor the $3.8 trillion state and local government bond market. Investors’ income from such bonds is exempt from federal taxes.
Getting off on the wrong foot. Not only is Congress still squabbling over the budget for fiscal 2019 (which began last October), it looks like it will get an especially late start with the 2020 budget. The president’s fiscal plan was due yesterday, but Politico reports the White House won’t have a budget until mid-March.
Will Ohio raise the gas tax on visiting, non-Ohio drivers? A state senator and a state representative think that Ohio could raise the gasoline tax only for non-Ohioans. Ohio drivers could use a rewards card or something like it to show they’ve prepaid a motor fuel tax upon registering their vehicle in Ohio. Then Ohio could levy a new tax for roads and infrastructure, and only drivers passing through the state would pay the extra tax when fueling their cars.
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- © Urban Institute, Brookings Institution, and individual authors, 2016.