Democrats propose new tax brackets for millionaires, billionaires
CBS
While Congress is primarily focused on cutting spending in the debate over reducing the federal budget deficit, some progressive lawmakers say it's time to start collecting more revenues from the wealthiest Americans.
Democratic Rep. Jan Schakowsky of Illinois unveiled a bill today to create new, higher tax brackets for Americans making more than $1 million a year.
"This isn't about punishment or revenge. It's about fairness," Schakowsky said. "It's about avoiding budget cuts that harm middle class families and those who aspire to it. We can choose to cut education, job creation and health care, or we can choose to ask those who can contribute more to do so."
Currently, the top tax bracket begins at an income of $373,000 per year; income above that level is taxed at 35 percent. Schakowsky contends this fails to distinguish between the "well off" and the superrich, such as a group of hedge fund managers whose average income last year topped $1 billion.
Schakowsky's bill, called the Fairness in Taxation Act, would tax income between $1 million and $10 million at a rate of 45 percent. Income between $10 and $20 million would be taxed at a rate of 46 percent, and income between $20 and $100 million would be taxed at 47 percent.
Income between $100 million and $1 billion would be taxed at a rate of 48 percent, and income over $1 billion would be taxed at 49 percent. For those making over $1 million a year, capital gains and dividends would also be taxed as income.
Schakowsky claims the bill could raise more than $78 billion for the government.
"A tax system where families earning several thousand dollars are taxed at the same rate as millionaires is unfair, and unsustainable," Rep. Donna Edwards (D-Md.), one of the bill's co-sponsors, said Wednesday. "At a time when House Republicans are demanding that working families, teachers, and firefighters bear the burden of reducing the deficit, millionaires should be required to contribute their fair share."
The bill's other co-sponsors include Reps. Raul Grijalva (D-Ariz.) and Rep. Keith Ellison (D-Minn.), the co-chairs of the Congressional Progressive Caucus; Reps. Jesse Jackson, Jr. (D-Ill.); Bob Filner (D-Calif.); Jerry Nadler (D-N.Y.); Steve Cohen (D-Tenn.); John Yarmuth (D-Ken.); and Peter DeFazio (D-Oregon).
Schakowsky said that it's time to make tax brackets fit the growing income disparity in the United States. According to analysis from the left-leaning Economic Policy Institute, the top 1 percent of Americans owns 34 percent of the nation's private net worth, while the bottom 90 percent owns just 29 percent.
Incomes for America's highest earners have grown faster than for the rest of the nation in recent years. With the nation struggling to reduce the deficit, progressives argue, high earners should have to contribute more.
Republicans last year blocked Democratic efforts to let the Bush-era tax cuts expire for the top 2 percent of income earners in America -- those making $250,000 or more. Democrats failed in part because some objected to increasing taxes on those making not much more than $250,000.
Congress ultimately passed a two-year extension of the Bush tax cuts, adding to the deficit and making some changes that actually slightly raised taxes for the poorest Americans.
Schakowsky was part of President Obama's 18-member bipartisan deficit commission, which searched for ways to reduce the deficit, though she voted against the final plan because she said it failed to address income disparity. The deficit commission plan, which included many elements, suggested reducing tax rates across the board while eliminating some tax deductions. It also called for modifying Social Security and Medicare.
A recent poll from CBS News' "60 Minutes" and Vanity Fair magazine found that between the choices of cutting defense spending, cutting Medicare, cutting Social Security, or raising taxes on the rich, 61 percent preferred raising taxes on the rich to balance the federal budget.
While the poor economy has resulted in relatively low income tax collections, conservatives argue that's no excuse to raise tax rates. Curtis Dubay of the Heritage Foundation writes that "tax reform is needed, but it's not because the tax code doesn't take enough of our money."
Too many deductions, credits and exemptions in the tax code are causing the government to "hemorrhage revenue" and creating a drag on the economy, Dubay argues.
Meanwhile, his colleague at the Heritage Foundation, David Weinberger, contends that income inequality does not matter -- because "equality of opportunity and equality of consumption have never been so ubiquitous."
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OR....insure that when they reach the median age of death, a Corporate "WILL" is probated for the death of the artificial Corporation and the estate is disbursed.
We do not need a corporate being, other than government, approaching perpetuity that is beyond the will of the people and acquiring the wealth of the nation and moving overseas. Corporate princes should not 'escape' but their enterprise should be consigned to the same kind of 'death' the ordinary citizen faces.
Death and taxes are the promise in life...and we should insure it for that artificial person endowed with our rights and immunities under the law.
Tax the rich, they can afford it. And they made all their money from OUR society and off the backs of ALL of us. Them keeping all the money is NOT WORKING. Not to pay fair share in un-American.
You've got it exactly backwards -- the only fair tax is progressive, not flat. A flat tax is just a simple way to make the very rich even richer.
Flat tax and national sales tax solves it all.
No liberal would go for that because then they would actually have to pay their fair share.
Flat tax and national sales tax solves it all.
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The "flat tax" would amount to the largest shift of the tax burden in our history and would cripple our consumer economy.
That was in 1928-29
Poor dolt, doen't realize that the US tax burden is being shifted to the working middle class were as the rich are enjoying the lowest rates in sixty years. Meanwhile, the US is being bankrupt to pay for these lower rates.
I know your mind is frozen wast land of liberal gibberish but the bankruptcy is being caused by OBAMA spending and the DEMOS spending since they took control of the spending in 2007.
It is doesn't not doen't just in case you liberals miss your slooow the spell checker.
Since your on the subject, you might want to run grammar check on that last sent.
jessy - how about tax payer subsidies (corporate welfare) to INTERNATIONAL Oil companies? Should we cut that? Why did the House GOP members vote UNANIMOUSLY to keep $15 BILLION a year welfare payments to Oil companies? How much would that save American tax payers? "Not hard to do the math when you actually want to."
First it should be eliminated and second it was passed by the democrats. The GOP as you say only have the HOUSE not the senate or the presidency.
Second I am not a fan of the GOP I just dislike the idiot democrats less that's all.
Third I am for cutting all spending until we have a balanced budget and a amendment to the constitution that required it every year.