TightWind is written by Kyle Baxter. Stay Hungry. Stay Foolish.

Ezra Klein explains the magic of a millionaire’s tax bracket:

This all seems a bit absurd right now, but the magic of both inflation and economic growth means that the ranks of millionaires will grow very, very quickly in the next few decades, and so setting up a millionaires’ bracket — or even a couple of them — will bring in quite a bit of money over time. I’d much rather see Democrats retrench to this position than fold on the tax cuts for the rich entirely.

It will just magically bring in a lot more tax revenue in the future.

What Klein hints at, but doesn’t explicitly state, is how it will do so. He says it will bring in quite a bit more money in future decades due to the “magic” of inflation and economic growth.

Let’s state this explicitly: what Klein is saying is a new tax bracket for millionaires (with a higher tax rate than lower tax brackets) will significantly increase tax revenue in the future because over time, as the economy grows and inflation occurs, what today is a large income—say, a million dollars—will be merely a respectable income, an upper-middle class or even middle class income, so if we create a millionaire’s tax bracket today, we will trap more non-”rich” families in a bracket with a much higher tax rate.

Effectively, Klein is arguing for a backdoor tax increase on Americans, by using economic growth and inflation. He’s taking advantage of the current dislike of the wealthy to place higher taxes on them (they’re not paying their fair share!) so over time the middle class will be subjected to the same tax rate.

This isn’t magic. It’s just using misplaced anger toward certain segments of society to rope people into higher taxes.