Hillary Clinton's campaign has spent much of the past week
trumpeting
her pledge to protect the middle class from tax increases. Clinton has
"proposed a bold, aggressive agenda," campaign press secretary Brian
Fallon said in a
statement
this week, "but when it comes to paying for it, she will make sure the
wealthiest Americans finally start paying their fair share, not force
the middle class to pay even more than they already do."
The former senator and secretary of state hasn't been shy
about using that pledge to bludgeon her Democratic opponents, Sen.
Bernie Sanders and former Gov. Martin O'Malley, as too eager to take
money away from the middle class. "If you are truly concerned about
raising incomes for middle-class families, the last thing you should do
is cut their take-home pay right off the bat by raising their taxes,"
Fallon said. "Yet Bernie Sanders has called for a roughly 9 percent tax
hike on middle-class families just to cover his health care plan, and
simple math dictates he'll need to tax workers even more to pay for the
rest of his at least $18-20 trillion agenda." Twitter accounts
affiliated with Clinton's campaign have eschewed subtlety to attack
Sanders and O'Malley on this point.
There's a problem with Clinton's line of attack: She is
promising to exempt a lot of indisputably rich people from paying more
in taxes. Clinton pledged last week that, should she become president,
she wouldn't allow taxes to be raised on households earning less than
$250,000 per year—by any measure a very high ceiling for the middle
class.
The median household income for 2014,
according to the US Census Bureau, was $53,657, about where it has been for the past three years (though still down quite a bit from the $57,357 mark
in 2007,
before the recession hit). To get into the top 20 percent, a family
needs to make more than $112,000 per year. Entry into the top 5 percent
requires more than $206,000 in annual income. A typical definition of
the middle class wouldn't include the top 5 percent of earners, who took
in more than half the money earned nationwide in 2014. And yet
Clinton's bar is even higher.
The overwhelming majority of Americans
like to think of themselves as belonging to the middle class, even when they have far more buying power than the average resident. With wealth growing
increasingly concentrated
at the very top tier of the superrich, it's easy for someone making
$150,000 to look up the chain and feel less than wealthy, even while
liberated from many of the concerns of those closer to the actual middle
bracket of annual income.
Clinton didn't draw her number out of thin air: $250,000 is the
same pledge she made in her 2008 campaign, and the level that President Barack Obama has also used to define the middle class. As the
New York Times explained
in 2011, that demarcation probably came from Bill Clinton's decision to
set the highest income tax bracket at $250,000. (Thanks to inflation,
the highest tax bracket is
now
income more than $464,000 for married couples.) But by setting such a
high marker, Clinton would make it much harder to find the funding to
pass many of the ambitious progressive goals she has suggested on the
campaign trail.
If Clinton (and Obama) had defined the middle class as making up to
$150,000 in yearly income, that slice of the country would exclude all
but the wealthiest 11.3 percent of households—perhaps a more reasonable
metric.
Of course, Clinton's own finances may influence her sense of income
norms. From the time she left the State Department to her presidential
campaign launch, Clinton went on the speaking circuit,
raking in millions, with a typical fee of around $200,000 per speech. Since the Clintons left the White House in 2001, the pair have
earned more than $230 million together, and financial disclosures from the current campaign show that the Clintons have a net worth
between $11 million and $53 million.
Sanders has proposed a broad reimagining of the social safety
net—most prominently single-payer health care—that would require raising
substantial new revenue through taxes. But even less sweeping
progressive legislation, such as Clinton's proposals, would likely force
the government to bump up taxes on a wider swath of the population than
just those making more than $250,000 a year.
"This is the kind of argument that conservatives make," the
Huffington Post's
Jonathan Cohn wrote
of Clinton's attacks on Sanders. "It might or might not help Clinton
win in November. It’s hard to see how it can help progressives win in
the long run."
Take the Family Act, a
bill
introduced by Sen. Kirsten Gillibrand (D-N.Y.) to wide acclaim from
progressive groups, which would institute paid family leave for workers.
To offset the cost of that new benefit, Gillibrand's bill would
institute a small increase in payroll taxes, which would hit many of the
same people for whom Clinton has pledged to not raise taxes. Clinton
has endorsed paid family leave in concept but has yet to explain how
she'd pay for it.
On Tuesday, Lis Smith, O'Malley's deputy campaign manager, lit into
Clinton over the recent attacks and called on her to explain how she'd
pay for family leave. "Secretary Clinton is right: Governor O’Malley
does support paid family leave, and he supports paying for it," Smith
said in a statement. "She is trying to have it both ways on this
issue—making promises she can’t pay for, and playing the age-old
Washington game of promising a chicken in every pot."
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