The Democratic can no longer claim to be the party of the common man against the party of the rich Republicans.
Not only did Obama win 52% of the vote of those earning at least $250,000; 14 of the 25 richest districts in the country are represented by Democratic Congressperson. The Democratic is increasingly taxing its own base if it intends to raise taxes on the rich.
Not surprising, even liberal hearts are not keen on paying too much taxes. And several Democratic Congressmen and women representing wealthy districts made it clear to President Obama and and their Congressional leaders that they will have a hard time going along with such high tax increases targeting solely the upper-class.
President Obama and liberal Democrats intend to pay for the president’s domestic agenda through taxing the rich. The initial plan for health care reform was that all household incomes from $350,000 to $500,000 will be face a 1% surtax that would incrementally raise to 5.4% to incomes +$1 million.
Such a proposed tax increase when combined with other increases would push the top American marginal tax rate to +50%; higher than all but three European nations. Needless to say, not even most Democrats are content to see the government take away 50% of their income and two Democrats voted against the health care bill in committee.
Fearing a intra-party rebellion after several Democrats wrote to President Obama expression their reservations about tax increases, Speaker Pelosi has offered a compromise: only those making +$500,000 will face a surtax.
This, of course, is not much of a compromise since the marginal tax rate will still be too high but will just encompass less people. Nonetheless, the moral and practical implications of such a high tax burden placed on so few a people is still present.
Maybe the Democrats will restrain themselves recognizing that their progressive tax gone to extreme is too much even for most party members, or better still maybe this dispute over funding will kill the entire health care reform package which will only ration care, reduce quality care and add trillions to nation debt.
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