Clinton Tax Plan Would Place 4% Surcharge on Incomes Over $5 MillionBy
Hillary Clinton called Monday for a 4 percent “surcharge” on Americans making more than $5 million annually, the first of several proposals she plans to unveil this week aimed at ensuring the wealthy pay a higher effective tax rate than the middle class.
“Right now we’re behind and we have to get the wealthy and the corporations to pay their fair share,” the Democratic presidential front-runner said at a campaign rally in Waterloo, Iowa.
The measure would apply to annual income above $5 million, raising $150 billion over a decade, said a campaign official who asked not to be named. It would affect two out of every 10,000 taxpayers, the official said.
Clinton has said a tax code that favors nurses and truck drivers over hedge fund managers could pay for job, infrastructure, and health research initiatives. Earlier this month she vowed to “go beyond” Warren Buffett's plan to set the minimum effective tax rate for those earning $1 million per year at 30 percent. The billionaire endorsed her in December.
Clinton's surcharge proposal comes as her leading rival for the Democratic nomination, Vermont Senator Bernie Sanders, gathers strength in key early-state polls. He also wants to raise taxes on the wealthy and use the revenue to fund a range of proposals, including a single-payer health care system.
Sanders communications director Michael Briggs said Clinton's proposal amounts to “too little too late," and that the country needs "real tax reform which demands that Wall Street, corporate America and the top 2 percent start paying their fair share.”
Overseas, Clinton's “fair share surcharge” bears some similarity to a French measure introduced in 2011. The French version applies a 4 percent surcharge to incomes exceeding 500,000 euros, according to an analysis published last year by Ernst & Young LLP, which called such surcharges an “increasingly popular way for governments too extract additional revenue,” particularly in Europe. French taxpayers earning from 250,000 to 500,000 euros pay a 3 percent surcharge.
The Republican presidential field in the U.S., in contrast to the Democrats, is largely opposed to raising taxes. During a Monday speech in his home state, Florida Senator Marco Rubio charged that Clinton’s “answer to every problem is to raise taxes and create a new government program,” according to prepared remarks. And, he noted, some in the GOP—including Senators Ted Cruz and Rand Paul—back the introduction of a value-added tax. “It’s not just her, or the avowed socialist running against her. Believe it or not, multiple Republican candidates for president support new taxes on the American people,” he said.
A rhetorical outlier: Front-runner Donald Trump, who said Saturday in Iowa, “Wall Street has caused tremendous problems for us. We're going to tax Wall Street.“
—With assistance from John Voskuhl in Washington.
To continue reading this article you must be a Bloomberg Professional Service Subscriber.
If you believe that you may have received this message in error please let us know.