Popular Support for Taxing Wealth (in Theory)

Reuters/Ipsos Poll: Majority of Americans support higher taxes on the wealthy. Nearly two-thirds, of the survey’s 4,441 respondents strongly or somewhat agree that “the very rich should contribute an extra share of their total wealth each year to support public programs.” The results carried across gender, race, and household income. Support among Democrats was 77 percent; among Republicans, 53 percent.

So…. Should the US tax system reduce wealth inequality? Find out on Thursday: Join TPC at a January 16 conference featuring Jason Furman, former chairman of the Council of Economic Advisers in the Obama administration, and panels of other experts. They will discuss wealth inequality, whether reducing after-tax wealth would affect the political power of the wealthy and public policy, and whether the tax code is an optimal tool to reduce inequality. Register for the event here, or watch it webcast live here.

And…. new year, new head tax? Seattle lawmakers, advocates, and business leaders are about to do battle over another push to tax large corporations. Local progressives want to leverage the national discussion about taxing wealthy individuals, but have not settled on how to do. Two years ago, the Seattle City Council passed and quickly repealed an employee “head tax” on large corporations.

Communities in Massachusetts want the state to let them tax big real estate deals to support affordable housing. The cities and towns, including Boston, Somerville, and Nantucket, have proposed a bill that would allow them to assess a 2-percent tax on some real estate deals without state approval. The bill would allow the cities to impose transfer taxes on real estate transactions above the statewide median sale price for single-family homes. Boston, for example, would tax deals above $2 million.

Maryland Democrats look to tax online ads. Seeking funds to enchance K-12 education, two powerful Democrats are looking at ways to tax digital advertising. “I figure it’s better the Russian trolls help fund education than property tax, or income tax, or sales tax,” said former State Senate president Mike Miller. Backers acknowledge that designing such a tax won’t be easy and likely would rely on self-reporting by search engines and other social media companies. 

Middle- and upper-middle income households are outsized winners from ACA tax repeal.  TPC’s Gordon Mermin reports that TPC estimates the 2019 budget agreement’s repeal of a tax on high-cost employer-provided health benefits, an annual fee on health insurance providers, and a tax on medical device manufacturers and importers will reduce taxes by an average of $350. The tax cut ranges from $40 for the lowest-income households to over $1,000 for the highest-income 20 percent of households. But relative to income, the biggest beneficiaries are those earning between $58,000 and $182,000 annually. Gordon concludes that the repeal “represents a lost opportunity to better target tax subsidies for health care and to help control health care costs.”

For the latest tax news, subscribe to the Tax Policy Center’s Daily Deduction. Sign up here to have it delivered to your inbox weekdays at 8:00 am (Mondays only when Congress is in recess). We welcome tips on new research or other news. Email Renu Zaretsky at [email protected].