SUBSCRIBE TO OUR FREE NEWSLETTER
Daily news & progressive opinion—funded by the people, not the corporations—delivered straight to your inbox.
5
#000000
#FFFFFF
5
#000000
#FFFFFF
Sens. Chuck Schumer (D-N.Y.) and Joe Manchin (D-W.Va.) talk with colleagues at the U.S. Capitol on November 16, 2016. (Photo: Tom Williams/CQ Roll Call)
Democrats Aim to End 'Ridiculous Giveaway' to Rich to Boost Medicare
"The Democratic plan to apply the investment income surtax to wealthy pass-through business owners is an important step in the right direction," said one advocate.
Jul 08, 2022
Progressives welcomed Thursday's news that Senate Democrats are finalizing a plan to raise taxes on some high-income households to bolster Medicare.
As The Associated Press reported, citing unnamed Democratic aides: "Under the latest proposal, people earning more than $400,000 a year and couples making more than $500,000 would have to pay a 3.8% tax on their earnings from tax-advantaged businesses called pass-throughs. Until now, many of them have been using a loophole to avoid paying that levy."
"Pass-throughs have been abused by wealthy Americans for years to reclassify their income and avoid paying the taxes they rightfully owe."
The modest tax hike on the rich owners of pass-through firms would raise an estimated $203 billion in revenue over a decade, which would be used to shore up Medicare--a program that analysts say is financially strong despite constant right-wing fearmongering.
"Pass-throughs have been abused by wealthy Americans for years to reclassify their income and avoid paying the taxes they rightfully owe," Morris Pearl, chair of Patriotic Millionaires, said in a statement. "The Democratic plan to apply the investment income surtax to wealthy pass-through business owners is an important step in the right direction toward fixing this problem and making rich people like me pay our fair share."
A majority of enterprises in the U.S.--ranging from one-person law offices to some large companies--are pass-throughs. Proprietors of these businesses count profits as income when they pay individual taxes but are exempt from corporate taxes.
"Voters are sick and tired of the rich and powerful playing by a different set of rules," said Pearl. "This change would close a ridiculous giveaway to only the richest Americans, and reinvest the windfall back into the American public."
"This moves us closer to fixing the out-of-control wealth inequality that plagues our nation, but there's still a lot of work to be done," he added. "Democrats should follow this change with more aggressive changes to make our tax code work for all Americans, not just the rich."
The proposed tax reform and Medicare funding initiative--part of the party's last-ditch effort to pass a scaled-backed economic package through the filibuster-proof budget reconciliation process before November's pivotal midterms--reportedly has the backing of right-wing Democratic Sen. Joe Manchin (W.Va.), who played a decisive role in torpedoing the more wide-ranging Build Back Better Act last year.
Senate Majority Leader Chuck Schumer (D-N.Y.) is expected to submit legislative text on the tax measure to the chamber's parliamentarian--an unelected official tasked with opining on whether bill provisions comply with the esoteric rules of budget reconciliation--in the coming days.
Earlier this week, Senate Democrats--including Manchin, whose vote is needed in a 50-50 Senate with unified Republican opposition--agreed on a separate plan that would allow Medicare to negotiate the prices of certain prescription drugs directly with pharmaceutical giants.
An Urgent Message From Our Co-Founder
Dear Common Dreams reader, It’s been nearly 30 years since I co-founded Common Dreams with my late wife, Lina Newhouser. We had the radical notion that journalism should serve the public good, not corporate profits. It was clear to us from the outset what it would take to build such a project. No paid advertisements. No corporate sponsors. No millionaire publisher telling us what to think or do. Many people said we wouldn't last a year, but we proved those doubters wrong. Together with a tremendous team of journalists and dedicated staff, we built an independent media outlet free from the constraints of profits and corporate control. Our mission has always been simple: To inform. To inspire. To ignite change for the common good. Building Common Dreams was not easy. Our survival was never guaranteed. When you take on the most powerful forces—Wall Street greed, fossil fuel industry destruction, Big Tech lobbyists, and uber-rich oligarchs who have spent billions upon billions rigging the economy and democracy in their favor—the only bulwark you have is supporters who believe in your work. But here’s the urgent message from me today. It's never been this bad out there. And it's never been this hard to keep us going. At the very moment Common Dreams is most needed, the threats we face are intensifying. We need your support now more than ever. We don't accept corporate advertising and never will. We don't have a paywall because we don't think people should be blocked from critical news based on their ability to pay. Everything we do is funded by the donations of readers like you. When everyone does the little they can afford, we are strong. But if that support retreats or dries up, so do we. Will you donate now to make sure Common Dreams not only survives but thrives? —Craig Brown, Co-founder |
Our work is licensed under Creative Commons (CC BY-NC-ND 3.0). Feel free to republish and share widely.
Kenny Stancil
Kenny Stancil is senior researcher at the Revolving Door Project and a former staff writer for Common Dreams.
Progressives welcomed Thursday's news that Senate Democrats are finalizing a plan to raise taxes on some high-income households to bolster Medicare.
As The Associated Press reported, citing unnamed Democratic aides: "Under the latest proposal, people earning more than $400,000 a year and couples making more than $500,000 would have to pay a 3.8% tax on their earnings from tax-advantaged businesses called pass-throughs. Until now, many of them have been using a loophole to avoid paying that levy."
"Pass-throughs have been abused by wealthy Americans for years to reclassify their income and avoid paying the taxes they rightfully owe."
The modest tax hike on the rich owners of pass-through firms would raise an estimated $203 billion in revenue over a decade, which would be used to shore up Medicare--a program that analysts say is financially strong despite constant right-wing fearmongering.
"Pass-throughs have been abused by wealthy Americans for years to reclassify their income and avoid paying the taxes they rightfully owe," Morris Pearl, chair of Patriotic Millionaires, said in a statement. "The Democratic plan to apply the investment income surtax to wealthy pass-through business owners is an important step in the right direction toward fixing this problem and making rich people like me pay our fair share."
A majority of enterprises in the U.S.--ranging from one-person law offices to some large companies--are pass-throughs. Proprietors of these businesses count profits as income when they pay individual taxes but are exempt from corporate taxes.
"Voters are sick and tired of the rich and powerful playing by a different set of rules," said Pearl. "This change would close a ridiculous giveaway to only the richest Americans, and reinvest the windfall back into the American public."
"This moves us closer to fixing the out-of-control wealth inequality that plagues our nation, but there's still a lot of work to be done," he added. "Democrats should follow this change with more aggressive changes to make our tax code work for all Americans, not just the rich."
The proposed tax reform and Medicare funding initiative--part of the party's last-ditch effort to pass a scaled-backed economic package through the filibuster-proof budget reconciliation process before November's pivotal midterms--reportedly has the backing of right-wing Democratic Sen. Joe Manchin (W.Va.), who played a decisive role in torpedoing the more wide-ranging Build Back Better Act last year.
Senate Majority Leader Chuck Schumer (D-N.Y.) is expected to submit legislative text on the tax measure to the chamber's parliamentarian--an unelected official tasked with opining on whether bill provisions comply with the esoteric rules of budget reconciliation--in the coming days.
Earlier this week, Senate Democrats--including Manchin, whose vote is needed in a 50-50 Senate with unified Republican opposition--agreed on a separate plan that would allow Medicare to negotiate the prices of certain prescription drugs directly with pharmaceutical giants.
Kenny Stancil
Kenny Stancil is senior researcher at the Revolving Door Project and a former staff writer for Common Dreams.
Progressives welcomed Thursday's news that Senate Democrats are finalizing a plan to raise taxes on some high-income households to bolster Medicare.
As The Associated Press reported, citing unnamed Democratic aides: "Under the latest proposal, people earning more than $400,000 a year and couples making more than $500,000 would have to pay a 3.8% tax on their earnings from tax-advantaged businesses called pass-throughs. Until now, many of them have been using a loophole to avoid paying that levy."
"Pass-throughs have been abused by wealthy Americans for years to reclassify their income and avoid paying the taxes they rightfully owe."
The modest tax hike on the rich owners of pass-through firms would raise an estimated $203 billion in revenue over a decade, which would be used to shore up Medicare--a program that analysts say is financially strong despite constant right-wing fearmongering.
"Pass-throughs have been abused by wealthy Americans for years to reclassify their income and avoid paying the taxes they rightfully owe," Morris Pearl, chair of Patriotic Millionaires, said in a statement. "The Democratic plan to apply the investment income surtax to wealthy pass-through business owners is an important step in the right direction toward fixing this problem and making rich people like me pay our fair share."
A majority of enterprises in the U.S.--ranging from one-person law offices to some large companies--are pass-throughs. Proprietors of these businesses count profits as income when they pay individual taxes but are exempt from corporate taxes.
"Voters are sick and tired of the rich and powerful playing by a different set of rules," said Pearl. "This change would close a ridiculous giveaway to only the richest Americans, and reinvest the windfall back into the American public."
"This moves us closer to fixing the out-of-control wealth inequality that plagues our nation, but there's still a lot of work to be done," he added. "Democrats should follow this change with more aggressive changes to make our tax code work for all Americans, not just the rich."
The proposed tax reform and Medicare funding initiative--part of the party's last-ditch effort to pass a scaled-backed economic package through the filibuster-proof budget reconciliation process before November's pivotal midterms--reportedly has the backing of right-wing Democratic Sen. Joe Manchin (W.Va.), who played a decisive role in torpedoing the more wide-ranging Build Back Better Act last year.
Senate Majority Leader Chuck Schumer (D-N.Y.) is expected to submit legislative text on the tax measure to the chamber's parliamentarian--an unelected official tasked with opining on whether bill provisions comply with the esoteric rules of budget reconciliation--in the coming days.
Earlier this week, Senate Democrats--including Manchin, whose vote is needed in a 50-50 Senate with unified Republican opposition--agreed on a separate plan that would allow Medicare to negotiate the prices of certain prescription drugs directly with pharmaceutical giants.
We've had enough. The 1% own and operate the corporate media. They are doing everything they can to defend the status quo, squash dissent and protect the wealthy and the powerful. The Common Dreams media model is different. We cover the news that matters to the 99%. Our mission? To inform. To inspire. To ignite change for the common good. How? Nonprofit. Independent. Reader-supported. Free to read. Free to republish. Free to share. With no advertising. No paywalls. No selling of your data. Thousands of small donations fund our newsroom and allow us to continue publishing. Can you chip in? We can't do it without you. Thank you.