Under current law our income tax system is progressive. The rate increases as income increases. However, all of the progressiveness of the income tax stops after we reach the top bracket with an income of $363,650. The difference between upper middle income families at the bottom of the top bracket and families with multimillion dollar incomes, in the same tax bracket, is like living on a different planet, but they are subject to the same tax rate. Timothy Noah explains why we need to extend the progressiveness of the tax system above the current maximum income of $363,650. He points out that under Richard Nixon and Jerry Ford the tax rate for incomes equivalent to $1 million today was 70%. This is a 50% reduction in the tax rate for those with incomes over $1 million.
While I agree completely with idea, actually getting it done is virtually impossible. If this was brought up at all when the Democrats held the majority, it was with little fanfare because I did not hear about it. Nevermind getting this done now. If I remember, this was an option in the "balance the budget" game on the NYTimes. Not going to fix everything by itself, but a good start.ReplyDelete