If we are going to achieve the 40% social investment economy, the public sector will require more revenue. More public sector revenue basically means more taxes. Clearly, the only new taxes that will be politically feasible will those targeted toward higher income groups. The best options are to repeal all Bush-era tax cuts, put a tax on all carbon (if this means 100% auctions on cap and trade, that's fine, too), and to eliminate the income cap on Social Security income taxes.
Another major difference between the House and Senate budget resolutions concerns the estate tax. In the House version, they basically adopt Obama's proposal to make the 2009 levels permanent, indexed to inflation. This means that estates worth up to $3.5 million (per person) pay no estate tax. Assets above that amount are taxed at a 45 percent rate. Personally, I think this is too generous considering the amazing tax benefits wealthy Americans already enjoy, but it could be a lot worse.
Unfortunately, the Senate has decided to make it worse. Blanche Lincoln and Jon Kyl introduced an amendment to the budget resolution that would raise the exemption to $5 million per person and lower the rate to 35 percent. Insane. The Center on Budget and Policy Priorities estimates that we'll lose $91 billion in revenue over 10 years as compared to the current estate tax levels (over $440 billion compared to 2011 levels).
In a $3.5 trillion budget, losing about $9.1 billion in public revenue isn't huge. However, during a time when we need to be increasing public revenue to meet the 40% social investment economy, any lost opportunities like this are terrible.
Some people might defend Democrats like Blanche Lincoln, by claiming they are "voting their districts" with bills like these. However, the absurdity of this argument is made clear by the graphic from Gallup at the beginning of this post. In every state and every congressional district in the country, either a huge majority or a clear plurality believe that higher income earners should be paying more taxes. Further, not only are higher taxes on the rich wildly popular, but the House version of the estate tax does not even return it to pre-Bush era levels.
One could argue that while higher taxes on the rich are popular in the abstract, individual higher tax proposals on the rich don't poll as well. This is true, but relying on such an argument to justify voting for the Lincoln amendment on the estate tax demonstrates not only an unwillingness to fight against conservative policies, but also an unwillingness to fight against conservative messaging. Given the Gallup polling numbers, arguments over issues such as the estate are eminently winnable anywhere in the country as long as they are framed as making the rich pay their fair share.
Voting for the estate tax isn't about 'voting your district," it is just about voting for rich people and nothing else. In the end, that is the truly unpopular position, and what we should be rallying against on tax day.