House Minority Leader Nancy Pelosi explained on Thursday why she proposed a tax increase on millionaires this year but won’t support it now as part of the House Republican plan to avoid the fiscal cliff.
“We must ask the very wealthiest Americans to pay their fair share. Democrats believe that tax cuts for those earning over a million dollars a year should expire and that we should use the resulting revenues to pay down the deficit,” Pelosi, a California Democrat, wrote in a May 23, 2012 letter to Speaker of the House John Boehner.
Boehner’s fiscal cliff “Plan B” would allow the current Bush-era tax rates to expire at the end of the year for families making over $1 million annually.
“At that time we were trying to smoke out the Republicans to see just how bad it was,” Pelosi told TheDC at her weekly press briefing on Capitol Hill. “Could they not touch the hair on the head of even people making a million dollars a year? And if they would go to that place, what kind of other package would go with it? But to say they’re bringing this to the floor — they’ve already become a little bit pregnant on their tax pledge that they’re not going to ever raise rates.”
“So they’ve done that, and that’s a victory for the president, I believe,” she continued. “But you just can’t do that and not say we’re going to have another side to this in terms of how we, again, reduce the deficit, grow the economy, because the higher up you go, the less deficit reduction you get… if you’re talking about dollar for dollar, the higher up you go, the less in revenue you bring in, but the less in cuts you can expect to have if it’s dollar for dollar.”
Pelosi concluded that Democrats “did smoke them out” because “they said they would protect everybody up to a million dollars, but don’t worry about it because we’re still going to give you $50,000 a year tax cut if you make over a million dollars a year.”
She added, “so, actually, really, they sort of pulled their punch on it.”
Rates would rise for all taxpayers if the White House and congressional leaders do not reach an agreement on the fiscal cliff before the end of the year.