Writing for Bloomberg News, Seattle venture capitalist and entrepreneur Nick Hanauer (who was active in last year's campaign for I-1098, the failed income tax on those making more than $200,000) says Congress should pass an income tax on the rich, arguing that putting money in the pockets of the "average middle-class consumer" actually creates more jobs than tax breaks for the very rich, because the superrich can only consume so much stuff.

Hanauer writes:
It is unquestionably true that without entrepreneurs and investors, you can’t have a dynamic and growing capitalist economy. But it’s equally true that without consumers, you can’t have entrepreneurs and investors. And the more we have happy customers with lots of disposable income, the better our businesses will do.

That’s why our current policies are so upside down. When the American middle class defends a tax system in which the lion’s share of benefits accrues to the richest, all in the name of job creation, all that happens is that the rich get richer.

And that’s what has been happening in the U.S. for the last 30 years.

Since 1980, Hanauer notes, the wealthiest 0.1 percent of Americans' share of the nation's income has increased 400 percent, while the bottom 50 percent have seen their income decline 33 percent.
Significant tax increases on the about $1.5 trillion in collective income of those of us in the top 1 percent could create hundreds of billions of dollars to invest in our economy, rather than letting it pile up in a few bank accounts like a huge clot in our nation’s economic circulatory system.

Consider, for example, that a puny 3 percent surtax on incomes above $1 million would be enough to maintain and expand the current payroll tax cut beyond December, preventing a $1,000 increase on the average worker’s taxes at the worst possible time for the economy. With a few more pennies on the dollar, we could invest in rebuilding schools and infrastructure. And even if we imposed a millionaires’ surtax and rolled back the Bush- era tax cuts for those at the top, the taxes on the richest Americans would still be historically low, and their incomes would still be astronomically high.

Read Hanauer's whole argument here.
Show Comments