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GOP lawmaker calls for tax on millionaires in symbolic break with party

 

A freshman Republican congressman broke Thursday with his party's leaders by calling for a surtax on millionaires, a symbolic break with his own party's united front against new taxes of any sort.

Arkansas Rep. Rick Crawford announced in his district today that he would introduce legislation that would impose a 5 percent surtax on individual income exceeding $1 million per year. His legislation would require passage of a balanced budget amendment in exchange.

"I hope Republicans consider passing a balanced budget amendment important enough to allow asking millionaires to pay a little more on their income over $1 million," Crawford said in a statement, "And I hope Democrats will recognize this good-faith effort and stop blocking a balanced budget amendment that will fundamentally alter the way Washington spends taxpayer dollars."

Crawford's announcement represents a crack in the Republican opposition to anything that even smacks of a tax hike. His announcement is sure to ruffle feathers on Capitol Hill, where Republicans have fought ferociously to pursue spending cuts as a primary means of deficit reduction.

Crawford's plan is especially significant given the fact that the millionaire surtax has been a pillar of Democrats' strategy -- both to reduce the deficit, as well as put Republicans in a difficult political situation.

"We look forward to more Republicans recognizing that addressing the deficit must include additional revenues from those who can and should contribute more," a Democratic leadership aide said in response to the proposal, "We have been prepared to, and participated in, efforts to do just that, but Republican leadership consistently walks away from the table."

Democrats had proposed a variety of spending initiatives throughout the fall, the cost of which was offset by various millionaire surtaxes, or closed loopholes for corporations (especially oil companies).

The surtax has become a favorite finance mechanism for legislative initiatives because it tests well with voters. Seventy-two percent of Americans expressed support for such a proposal in a February poll conducted by ABC News and the Washington Post, for instance.

But Republicans have stood steadfast against anything even smacking of a tax increase, even through last year's fights over spending and the debt-ceiling. Some Republicans had floated a broad-based tax reform that would close loopholes, but many GOP leaders insisted that those reforms have a neutral impact on taxpayers.

Crawford must also reckon with anti-tax activists like Grover Norquist, the president of Americans for Tax Reform, whose "Taxpayer Protection Pledge" he signed before running for congress.

Other Republicans have come out in support of a balanced approach to deficit reduction that included tax increases that were coupled with entitlement reforms, and some have even openly spurned Norquist's pledge. But Republicans will likely brush this proposal aside and continue with their no-new-tax mantra, a strategy they've found is in their political benefit.

"This is an issue that we shouldn’t open the door to," a GOP strategist told NBC, "As Republicans we should be the party against tax increases."

House Republican leadership has failed to comment on the legislation, with aides only saying, "We'll take a look at it."

Norquist called the proposal "too silly to comment on," but likened the inclusion of the millionaire surtax to "the willingness to raise taxes in return for green unicorns jumping," alluding to the fact that this legislation is unlikely to pass.

The legislation will likely never become law considering a balanced budget amendment has nowhere near the 2/3rds majority support needed in Congress to be sent to the states for a vote, a point echoed by Norquist.

"It's never going to happen," Norquist said of the idea that Congress could pass the balanced budget amendment. "The modern democratic party has refused to provide the votes."

But the overall popularity of this type of surtax may well have played into Crawford's decision to introduce the proposal, since only 1 percent of the residents in his Arkansas district earn over $200,000 annually. Its unemployment rate of 9.3 percent is above the national average, according to U.S. Census data.