The accidental truth on tax rates

THE ACCIDENTAL TRUTH ON TAX RATES…. Sen. Chuck Schumer’s (D-N.Y.) compromise proposal on tax policy — everyone making less than $1 million gets a tax cut, millionaires and billionaires go back to Clinton-era tax rates — would give Republicans 90% of the tax package they want. But the GOP still won’t accept it, because the party’s obvious goal to protect the very wealthy, literally at all costs.

But during a floor debate yesterday, there was an interesting exchange. Schumer made his case for his compromise — the third major Democratic compromise proposal on taxes — and urged Sen. Lamar Alexander (R-Tenn.) to concede it’s a good idea. The Republican refused, but the conservative Tennessean made an observation that’s worth repeating.

“As I was listening to [Schumer], I was reminded that most of the people whose taxes he is trying to raise live in New York,” Alexander said. “I mean they’re not in Tennessee, we’re a relatively low income state. So I admire him for his courage … to be so specific that we’re gonna raise taxes on just a small number of people, most of whom live on Wall Street in New York.”

There’s certainly some truth to that. There are, in fact, a lot of millionaires in and around Manhattan, and fewer in Tennessee. Schumer’s plan would still guarantee tax cuts for everyone, but would raise the top rate on Wall Street’s wealthiest workers, who happen to be his constituents.

The problem, of course, is that Alexander was undermining his own party’s misleading talking points. To hear his Republican Party tell it, allowing top rates to go up on millionaires would be awful for small businesses and those poor mom-and-pop stores with seven-figure incomes.

Which is what makes Alexander’s accidental accuracy so refreshing. Schumer’s plan would, as the GOP senator acknowledge, “raise taxes on just a small number of people, most of whom live on Wall Street.”

With that in mind, if that’s true — and it is — why are Alexander and his Republican colleagues fighting so hard for this “small number of people,” holding the chamber and middle-class tax cuts hostage until these Wall Street folks get a large tax break they don’t need?