by John Lawrence / Will Blog For Food / April 11, 2011
The Tea Party says we are Taxed Enough Already. But who exactly is “We.” Are upper income individuals and families taxed enough already or is it just lower income individuals and families? Here’s the tax brackets for 2010:
How many middle class families would object to adding a few higher brackets like say a Tax Rate of 40% for Married Couples and Individuals with Incomes over $500,000. Why not 50% for incomes over $1 million, 60% for incomes over $5 million, 70% for incomes over $10 million, 80% for incomes over $100 million and 90% for incomes over $1 billion? Even at the 90% tax rate, a billionaire filing would still have 10% of $1 billion left over in disposable income which is $100 million.
Pity the poor person who can’t live on that! And then why are the real high earners whose income is mostly capital gains only taxed 15% when everyone who makes at least $16,750. or higher by the sweat of their brow is taxed at least 15%. A married couple making $16, 570 is poverty level. Why is some single billionaire taxed at the same rate as a poverty level family? Note there is no reduction in tax rate when there are children in the family. CEOs take most of their income in stock options. When they cash them in, their profit is all capital gains taxed at 15%. And please note that adding higher tax brackets for millionaires and billionaires while keeping the lower brackets exactly the way they are will not add one iota of taxation to the poor and middle class.
On January 28, 2011, it was reported in various news media on television and online that John Paulson earned at least $5,000,000,000 (five billion USD) in 2010. Since Paulson is a hedge fund manager he paid taxes at the 15% rate due to the tax loophole of “carried interest.” If capital gains were taxed the same as regular income, he would have paid at the 35% rate, the same as someone making $373,650. If my tax table given above was in effect he would have paid at a 90% rate.
The reason why the Federal government has such large deficits is that tax rates for the rich under Republican Presidents have been systematically lowered. Tax breaks have been given to the rich with the result that now there is a debt crisis and Republicans are attemtping at this late date to balance the budget on the backs of the poor and middle class while continuing to give even greater tax breaks to the rich.
From 1946 to 1954 the top tax rate was either 89% or 90%. From 1956 to 1960 the top rate was 75%. Does it make sense that millionaires and billionaires, if they are not paying most of their tax at the 15% capital gains rate, are paying at the same rate as those making $373,650? Shouldn’t there be a few higher brackets in the tax code say for income over $1 million and income over $1 billion at least?
For the remainder of this article, please go here.