Screw the Rich to Protect Super-Rich Campaign Contributors?
This item raised my eyebrows when I saw it. Joshua Tucker at The Monkey Cage points out that the Republicans are proposing we do exactly that.
The idea (NYT, emphasis mine):
…tax the entire salary earned by those making more than a certain level — $400,000 or so — at the top rate of 35 percent rather than allowing them to pay lower rates before they reach the target, as is the standard formula.
This to avoid the inevitably apocalyptic increase of the top marginal tax rate by 4.6%, from 35% to 39.6%.
As Tucker points out, this proposal increases the taxes for everybody making >$400K by the same amount – whether their income is $500K or $50 million.
Holding up my thumb and squinting, I’m thinking the extra taxes for those folks would be $50-100K. This would be a massive percentage increase for $400K earners, but a drop in the bucket even for $4-million earners, much less the $40-million crowd.
Avoiding that 4.6% top marginal tax rate increase saves a $20-million earner almost a $1 million a year.
As Tucker also points out, this is a stupendous gift to those who have the means to really give back to elected officials — the donors who can make or break a campaign by signing a single check.
But I’m sure the Republicans haven’t considered that. They’re just trying to do What’s Best for America.
Cross-posted at Angry Bear.