Yesterday we reported on the New York Times article “What Could Raising Taxes on the 1% Do? Surprising Amounts”
According to the New York Times article:
“To get the most accurate picture possible, throw in all the scraps of income, from the most obvious (like wages, interest and dividends) to the least (like employer contributions to health plans, overseas earnings and growth in retirement accounts). According to that measure — used by the Tax Policy Center, a joint project of the Urban Institute and the Brookings Institution — the top 1 percent includes about 1.13 million households earning an average income of $2.1 million.
“Raising their total tax burden to, say, 40 percent would generate about $157 billion in revenue the first year. Increasing it to 45 percent brings in a whopping $276 billion. Even taking account of state and local taxes, the average household in this group would still take home at least $1 million a year…”
Note that the article refers to “total tax burden”, not the top income tax bracket which is already 39.6% plus 1.5% sur-tax towards the Affordable Care Act (‘Obamacare.’)
Much more important is how we tax estates or, as Republicans like to refer to it, the “death tax.”
Not only is this a huge source of potential revenue, but it serves to mitigate the negative impact of huge fortunes passing from the reasonably responsible hands of the earners to the haphazard, inexperienced and untested recipients.
There are no taxes whatsoever on the initial $5,430,000, a lifetime exemption and, as a practical matters, will be available for most estates. So those readers whose estates are less than $5,430,000, need not have concerns for the estate tax impact upon their heirs.
After the $5,430,000 deduction has been utilized, the below tax rates are applicable:
“MOTLEY FOOL (figures from IRS):
Amount of Taxable Estate Tax Bracket
$0-$10,000 18%
$10,001-$20,000 20%
$20,001-$40,000 22%
$40,001-$60,000 24%
$60,001-$80,000 26%
$80,001-$100,000 28%
$100,001-$150,000 30%
$150,001-$250,000 32%
$250,001-$500,000 34%
$500,001-$750,000 37%
$750,001-$1 million 39%
Over $1 million 40%
SOURCE: IRS.”
We advocate an additional tax brackets of 50% for over $100 million and 60% for over a billion. It would both produce needed revenue and further the sense of the United States as a democracy, rather than a kleptocracy with an ever greater elite of heirs with huge wealth, immense political influence, and few constraints.
