Liberals to Pelosi: Stop helping the 2 percent!
At first glance, Nancy Pelosi’s call to extend tax breaks to everyone earning under $1 million seems firmly in line with the liberal consensus. “It is unacceptable to hold tax cuts for the middle class hostage to extending multi-billion dollar tax breaks for millionaires,” the House Minority Leader wrote in a letter to John Boehner, demanding an immediate vote for a permanent extension of middle-class tax cuts. But a group of liberal advocates believe she’s giving away too much already.
Contra Pelosi, a new liberal coalition called Americans for Tax Fairness believes the threshold for extending the Bush tax cuts should be $250,000, not $1 million. By moving the threshold from $250,000 to $1 million, the government would receive 43 percent less revenue, or between $26 billion and $30 billion in 2013 alone, the group argues, citing analysis from Citizens for Tax Justice. CTJ, a member of the coalition, also points out that those earning more than $1 million would disproportionately benefit from a higher threshold, because they would pay a lower marginal rate on all their income from $250,000 to $1 million. Former White House adviser Jared Bernstein isn’t happy about Pelosi’s proposal, either.
So if Pelosi is advocating ending tax breaks for the richest 1 percent — whose average income in 2011 was $1.5 million — liberal advocates want her to extend it to the richest 2 percent, who’d be hit by tax increases over $250,000. This doesn’t mean civil war on the left just yet: Americans for Tax Fairness didn’t call Pelosi out by name, only vaguely alluding to “proposals on the table” in Congress. But it’s a warning shot.