Congress should give the H.O.T. tax a warm welcome.
No American should be forced to endure a tax cut that he does not want. Thus, Congress should adopt my idea: The Higher-rate Optional Tax (H.O.T. tax) would shield tax lovers from the GOP-sponsored Tax Cuts and Jobs Act. Republicans should bring that bill and this friendly amendment to the U.S. Senate floor after Thanksgiving.
While most Americans welcome lower taxes, some 400 loaded taxpayers greet tax cuts like lead ingots in their Christmas stockings.
“Do not cut our taxes,” plead these members of Responsible Wealth, a group of self-described “high-net-worth individuals, many in the top 1 percent.”
“The Republican tax plan would disproportionately benefit wealthy individuals and corporations with provisions including repealing the estate tax, repealing the Alternative Minimum Tax, and slashing the top pass-through tax rate,” these millionaires and billionaires complained last week, in an open letter to Congress. “Such proposals that benefit the wealthy would exacerbate the current wealth disparity in the U.S. where the top 1 percent of households hold 42 percent of the wealth.”
This communique’s signatories include fashion designer Eileen Fisher, show-biz heiress Abigail Disney, and the far Left’s Daddy Warbucks, George Soros.
“High-net-worth people like me have done very well in the last few decades and in the current bull market,” said former American Airlines CEO Robert Crandall. “The last thing we need is a huge tax cut.”
“These proposed tax cuts are not about economic stimulus or job creation,” said Responsible Wealth’s director, Mike Lapham. “They are simply about greed.”
These swells don’t just oppose tax cuts. They actually favor tax increases. As their letter states: “We call on Congress to raise our taxes to bring in additional much-needed revenue and to restore investments to vital services.”
These mega-elitists are entitled to their liberal guilt. However, they shouldn’t exorcise their self-inflicted socioeconomic demons with other people’s money. This is perverse.
Many — likely most — top earners feel no shame about their success and are eager to retain, reinvest, and otherwise enjoy more of their own money, rather than lob it atop the fiscal bonfires on the Potomac.
Thankfully, a perfect solution would let the Soros set pay higher taxes while freeing everyone else to relish the tax cuts they so richly deserve. Here’s how:
Congress should add the H.O.T. tax to the legislation now coursing through Capitol Hill. It would be simple, fair, and voluntary. Any taxpayer who feels undertaxed could fill the H.O.T. line on IRS Form 1040 with whatever higher tax rate makes her happy, multiply by taxable income, and submit that larger total.
The H.O.T. tax will let the Soros crowd ease their financial shame in one step.
Psychologically, the H.O.T. tax will let the Soros crowd ease their financial shame in one step. If Responsible Wealth’s 400 members want to pay self-imposed tax rates of 50 percent, 75 percent, or even 99 percent (imagine: top 1 percenters who choose to keep just 1 percent of their incomes), then praise the Lord and pass the certified checks. Americans will be grateful for those who put their millions where their mouths are.
Economically, however, this may generate few federal revenues.
Massachusetts hints at how little those who clamor for higher taxes actually pay when so empowered. The Bay State cut its 5.85 percent tax rate in 2000, down to 5.1 percent today. Back then, Citizens for Limited Taxation proposed that the 5.85 percent rate remain available to anyone who rejected the lower levy. Since 2002, an average annual 1,200 of this state’s roughly 3.5 million tax filers have embraced the higher rate. The quarter-million dollars they collectively generate is like a pint of Sam Adams lager in the Boston Harbor that is Massachusetts’ $40.3 billion state budget.
Still, if the H.O.T. tax yields nominal federal revenue, every penny could be earmarked to reduce America’s $20.5 trillion national debt. The Treasury should report that figure annually, as a measure of limousine-liberal sincerity.
Politically, the H.O.T. tax will enfeeble the Left’s “We hate tax cuts!” chant. Free-marketeers will respond: “Great. Pay the H.O.T. tax. Less tax relief for you; more tax relief for us.” Pro-tax Leftists will be embarrassed if they spurn the H.O.T. tax. This fate befell Senator Elizabeth Warren (D., Mass.). As a candidate, she was asked if she paid her state’s higher tax rate. “I paid the taxes that I legally owed,” she conceded in 2012. “I did not make a charitable contribution to the state.”
This reform costs nothing. Its benefits are priceless. Please contact your representatives in Washington, D.C., and ask them to introduce and enact the H.O.T. tax!
READ MORE:
House and Senate Tax Plans: A Comparison
The Senate GOP’s Corporate-Tax-Cut Delay: A Recipe for Recession