Wednesday, October 5, 2011

The 5% solution?

Top Senate Democrats want to pay for Obama's Jobs Bill by tacking on another 5 points to the tax rate on income in excess of one million dollars (say it in the Dr Evil voice). With loopholes and deductions we are probably talking about going from an effective rate of 28% to 33% which is still one of the lowest rates in the developed world. Compare that to the 48% effective rate people in that income bracket paid in 1961 (adjusted for inflation).

JFK ran on the idea of raising taxes by cutting the rate from 91% down to 72% and closing all the loopholes thus raising taxes. This is how Republicans get away with the lie that cutting tax rates increases revenue. It only works if you close some loopholes. The Republicans don't believe in closing loopholes, just creating new ones. But only for the rich.

Most of the Republican candidates seriously propose cutting capital gains taxes to zero, and they say with a straight face that this too will increase revenue. When Bush cut the rate to 15% what he wanted was zero. Why should the rich pay taxes? Taxes are what you levy on the peasants.