Making A Splash, Disagreement Within the Party: Talking With Rep. Polis

White House Chief of Staff Rahm Emanuel and Rep. Jared Polis (D-CO) (Image from Polis House Web site.)

This past week, freshman U.S. Rep. Jared Polis — a Democrat elected to represent Colorado’s Second District — decided it was time to take a stand.  For business owners.  Leading 21 other freshmen members of Congress to send a letter to Speaker of the House Nancy Pelosi is not the usual course of business for a new member of Congress, but Polis didn’t seem concerned.

The letter, which spread quickly, far and wide, outlined concerns with the House’s funding of the health care reform bill, particularly its “surcharge” tax on incomes over $1 million.  This opposition led Polis to be one of three Democrats on the Education and Labor Committee to vote against the House health care reform bill.

I asked Polis about the letter and why he, as a freshman, would do such a thing and he said:

First of all, what we wrote on . . . certainly didn’t contradict any of the principles that President Obama has laid down in terms of what he wants for health care reform.  These remarks were specific to the House version of the bill, and even more specific, to how we pay for the House version of the bill.  Among the signers, there might very well be some who have issues with different parts of the plan.  I do not.  I strongly support a public option.  I strongly support the exchanges.  I think, overall, it’s a very good bill.

With that, though, Polis explained the freshman group’s opposition to the funding:

The reservations that we have are around the way the House is choosing to pay for it.  The current House version chooses to pay for it with a surcharge on high wage earners.  Now, that hits wealthy individuals, but as we pointed out in the letter, and where we are directly concerned, is that it hits successful small businesses.  These might be community-owned businesses, a chain of five or ten stores, they have S-class status for how they file their taxes, they file it as individuals.  We are, of course, already raising their taxes, through the expiration of the Bush tax cuts, from a marginal rate of 35% to 39.6%.  Now, we’re hitting them with another 5.4% surcharge above $1 million, which actually would put them at a significant disadvantage against their corporate competitors that are effectively paying the corporate tax rate of 35%.  So, you could have successful S-class businesses, which tend to be closely held community-owned businesses, family-run businesses, that will be paying a tax 25% higher, 45% rather than 35%, that are engaged in the same substantive business as the corporate businesses.

Polis expressed hope that the response to the letter will lead to a solution that could gain the support of the freshmen members:

I’m confident that we can work with the leadership on this tax issue of how we’re paying for it, whether it’s a combination of extracting more savings from health care reform and also perhaps broadening the base of who we’re collecting it from, so it’s not as large a tax that could potentially penalize small business.

I think both leadership in the House and the Administration have been very willing to listen to these concerns, and I think it’s just a matter of what solutions are offered up, and we should be seeing that in the next week.  But in order to get the support of many of these newly elected Democrats, we’ll have to see a way to pay for it that doesn’t put the burden squarely on the shoulders of small business.

Regardless, though, as Polis admitted, some of the signatories to the letter might also oppose the bill for other reasons.  So, solving Polis’s “surcharge” tax concerns, might not equate to a gain of 22 votes.  Also, it seems a little strange to me — and, please, someone, explain to me why this is insane — that we don’t somehow separate out the S-class businesses in the tax code so that they are not included in the same tax area as individuals with incomes over $1 million.  If the problem with taxing individual incomes over $1 million is that it ropes in small businesses, why don’t we address that rather than just saying “we can’t tax that group because it will hurt small businesses”?

Finally, I asked Polis about Markos Moulitsas’s tweet of last week that — regarding the letter — “Rep. Jared Polis is shaping up to be a serious pain in the ass” and how Moulitsas and other progressives might be viewing Polis’s actions this week as in some way hindering the President’s health care reform efforts.

Well, I hope that “pain in the ass” is not a veiled homophobic remark, but I will have to talk to Markos about that.

Look, progressives need this plan to succeed; we don’t want to pass a plan that hurts small business.  Small business is the backbone of our economy.  Giving big multinational publicly-traded companies yet another advantage over small, family-owned businesses is not consistent with our values as progressives, which is why we had people from across the ideological spectrum sign this letter, in terms of new members.

So, I’m confident we can continue to work with leadership and the Administration to find a way to pay for health care reform that can actually benefit small business.  There are many other benefits for small business in this plan, whether it’s a tax credit, whether we can help them get coverage, but we have to make sure the full burden of paying for it doesn’t fall on their shoulders or it could be a net detriment to small businesses and to job growth in our country.

To hear, Rep. Polis’s response to Markos’s “pain in the ass” comment, download Polis-Monday.

[NOTE: There are a lot of lengthy quotes here, and I apologize, but I felt that due to both the importance of the issue and my lack of expertise on it, the full context of any of Polis's remarks was very important.]

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I wanted to thank Rep. Jared Polis for his time on Saturday.  He was a pleasure, and I look forward to seeing how he progresses in the House.  I also want to thank his and Rep. Mary Jo Kilroy’s staff for their assistance in making this interview happen and the Ohio Democratic Party for providing us space to have our conversation.

Finally, I’d encourage folks to do what they can to engage their and other members of Congress on the issues that concern them.  Even if you don’t leave in agreement on all points, it’s often an enlightening experience — at least, it is for me.

PREVIOUSLY IN THIS SERIES:

NEW TO CONGRESS, BUT NOT TO POLITICS: Law Dork talks To Rep. Jared Polis about who he is and what he’s doing in Congress.

CHANGE, CONGRESS & LGBT ISSUES:  A wide-ranging discussion with Representative Polis on LGBT issues, from legislation being considered in Congress to the Department of Justice’s brief defending the Defense of Marriage Act to President Obama’s efforts in the past months to advance LGBT equality.

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