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Tax the (upper) middle class, please

Taxes aren't punishment. They're part of our shared obligation. Politicians, starting with Bernie Sanders and Hillary Clinton, should learn to speak that language.

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The most recent tactical skirmish between Hillary Clinton and Bernie Sanders involves taxes: Will Sanders admit that the scale and scope of his plans for health care, higher education, family leave, and child care would require higher taxes on the middle class? With two exceptions, Sanders has avoided specifics, except to identify "the billionaire class" and "the very wealthy and corporations" as the source of revenue for his ambitious agenda.

The exceptions are his paid leave proposal, which like Sen. Kirsten Gillibrand's is funded by a payroll tax, and his single-payer health proposal, where a tax would replace the premiums we currently pay to private insurers. For the rest, which could cost $5 trillion or more, he's mostly been vague. It's hard to imagine funding that level of spending solely through taxes on the very wealthy — even if it were politically feasible, the high rates would further encourage tax evasion.

I don't blame Sanders for avoiding specifics, but in digging into his platform, I found, somewhat to my surprise, that when he is specific, he implicitly adopts the same limiting principle that has constrained tax choices in the Obama years: no tax increases for families making less than $250,000. Sanders hasn't made this promise as explicitly as Clinton has, but his proposals trim their sails just as if he had.

According to the Tax Policy Center's summary of candidates' tax plans, Sanders endorses "raising the top tax rate to over 50%." That rate, currently 39.6 percent, applies to household adjusted gross income above $465,000, well above the quarter-million line. While others have proposed lifting the cap on earnings that would be subject to the Social Security payroll tax, currently $118,000, Sanders does it in a tortured way: Only income above the magical $250,000 line would be taxed. So we'd pay tax on the first $118,000, then there would be a large "doughnut hole" spanning $132,000 before tax kicked in again.

Let's be clear about just what these numbers mean: The income threshold for the top 1 percent is $389,000. Every household paying the top tax rate, the one Sanders would increase, falls solidly within that blessed circle. The top 5 percent begins with households earning more than $230,000, so everyone who would pay Sanders's higher payroll tax is solidly in the group that earns more than 95 percent of Americans. (In reality, they earn even more: The payroll tax falls on individual wage and salary income, but many individuals who make this kind of salary live in households with total income that is much higher, whether from a spouse's income or from investments.) The $250,000 line is almost five times the median household income.

It is true that the most staggering gains in income, and in share of total income, have gone to the one percent and even more to the top one-tenth or one-hundredth of the 1 percent. They should bear a very large portion of the responsibility for the cost of programs that will restore economic opportunity for those whose wages have stagnated. But the upper middle class — those with incomes well into the six figures but short of the quarter-million mark — have also done well, very well and have responsibilities too. A politics that pretends all the costs can be borne by some "other," in its distant gated community, is a narrow and shortsighted view of democratic possibilities.

The "no tax increase over $250,000" dogma has at least four major downsides, all of which have been clear throughout the Obama era:

1) It constrains policy choices and makes them super complicated.  Remember the "Buffett Rule"? In 2011, Warren Buffett called attention to the inequity that his secretary paid a higher tax rate than he did. That's because his income is all capital gains and dividends, taxed at a preferable rate, while hers was salary income. The obvious "Buffett Rule" to remedy that idiosyncrasy would be to tax all income, whatever the source, at the same rate. But no! Because some people earning less than $250,000 do have capital gains, the "Buffett Rule" had to be crafted in a complex way that affected only millionaires. As introduced, it is a second level of the alternative minimum tax, an unnecessarily complex kludge in place of the simple rule that was promised. Many other similarly promising policies will be off limits just because they don't fall neatly along the $250,000 line.

2) It reinforces the idea that taxes are a kind of punishment. The point of progressive taxation isn't to harm those who have done very well — it's that everyone should contribute to shared priorities, determined democratically, based on their ability to contribute. Members of the "billionaire class" surely have an untapped ability to contribute to the social order that made their wealth possible. But so do many others who haven't reached quite the same level. As the political sociologist Vanessa Williamson has shown, Americans actually take pride in paying taxes and view being able to contribute as a patriotic act. Politicians should speak the same language of shared obligation, not punishment.

3) It invites a nonsensical debate about who is really "rich" or "very wealthy." This can edge into absurdity — you might remember the University of Chicago law professor who complained in 2010 that despite an income in the $400,000s, his family wasn't really rich, not after they paid for private school, nannies, gardeners, and house cleaners. (As Josh Barro put it recently "$400,000 isn't a lot of money — after you spend it.") Even Nancy Pelosi and Chuck Schumer questioned whether $250,000 was really "rich," which it might not be in San Francisco and brownstone Brooklyn. But if you stop talking about taxing only the "very wealthy," you avoid this silly fight.

4) It's the wrong line. American households in the top 20 percent (which corresponds to income of about $130,000) took more than 50 percent of total income in 2011. While the income gains of the top 1 percent from 1979 to 2011 total 174 percent, adjusted for inflation, the rest of the top 20 percent, excluding the 1 percent, gained 56 percent over that period, while the rest of the population stagnated. (All data from this Congressional Budget Office report.) The top 20 percent also got the greatest benefit from the Bush tax cuts, and while the 2011 budget deal raised the effective tax rate of the very wealthy by 4 percentage points, the "merely affluent" continued to do well — their taxes have gone up by only 1 percentage point. The line for those who should contribute more is somewhere around the top fifth, not $250,000.

It's too bad that even a self-described socialist can't be more daring and honest about taxes and adopts the same caution that has crippled policymaking for the past seven years. Taxes are not a punishment for the very wealthy. They are a means for all of us to contribute, as best we can, to the cost of a just society that creates equal opportunity.