So, we’ve committed to spending tons of money just as we’re not bringing in enough cash to pay the bills. Moving the tax threshold to $1 million does not help that issue. Taxing household income above $1 million is estimated to bring in $463 billion over 10 years, whereas taxing rich families above the $250,000 threshold rakes in $829 billion, according to an analysis by the left-leaning Center on Budget and Policy Priorities. That’s a big difference.
But, the most significant problem with the $1 million mark is that politically it creates a false sense that we’ve solved the budget problem by raising taxes on the uber-rich. Not even close. If Americans want to keep the programs everyone seems to enjoy (and not drastically change the make-up of the federal government by cutting agencies, medical research, or education, as the Ryan budget proposes), then a greater share of people are going to have to pay more in taxes—and that inevitably will include families who earn more than $250,000 but also probably families that make over $100,000 a year. That’s because the bulk of the money in the tax code comes from households making between $100,000 and $200,000.
Setting the standard of only taxing millionaires lets politicians off the hook–both Democrats and Republicans.