Republicans seem to think the words “tax increase” are a lethal weapon. Democrats seem to agree with them. House Democratic Caucus chair Joe Crowley just declined to say whether he would repeal the Tax Cuts and Jobs Act, offering the lifeless alternative of “[restoring] balance.” There’s no excuse for such meekness. Tax politics have changed, and Democrats need to stop fearing the issue like a rogue torpedo.
Both parties seem trapped in the 1980’s on taxes. That was a time when taxes really were high and the median voter really did want them cut. Reagan-Bush dominated the decade because of the issue. Since then, taxes have fallen, and middle-class Americans show far less concern that they are taxed too much. Anti-tax sentiment now resides largely within the donor class.
Consultants don’t seem to have noticed the change. We’re supposedly a “center-right nation” on the size of government. According to the best data, this just isn’t true anymore. A plurality of Americans favor “a bigger government with more services.” Even conservative Republicans show some support for higher taxes on the rich. Cutting taxes is now a niche interest of rich people and the supply-side movement.
In a fact-based world, Republicans would be playing defense on taxes. And the Democrats would play their winning hand without apology. They would emphasize that rich people pay too little, and higher taxes will fund popular programs. Voters are ready to hear that message.
Sadly, Washington Democrats may be too milquetoast to own taxes. But reticence on this winning issue is foolish. They should at least stop running scared.
Alexander Jones is an original contributor to PoliticsNC.
Ebrun, there was a time in the history of this country when the tax rates were that high and there was unbelievable growth! So your argument doesn’t hold water. Although, I don’t think we really need to go quite that high with tax rates to get ourselves back to a place where we can take care of the least among us like a civilized society. I also think you missed the irony of Christopher’s post. Now, if we can just take some of the money we are spending on 45’s golf trips and use it to pay for health insurance or college tuition for someone who needs it, we’d be headed in the right direction.
I can only imagine how the federal government would spend $260,000,000.
Then he would have to pay taxes in DC and New York
County taxes and what else
So you have no problem taking probably 90% from a person
I believe that is a little much.
Here’s my tax plan. I wish the Democratic party would adopt it. (I know it’s a bit long, but tax returns, like tax laws, will NEVER fit on a postcard, regardless of GOP rhetoric.)
Eight income brackets for both individuals and families.
Adjusted Gross Income up to each dollar level is taxed at the indicated rate, for billionaires and minimum-wage workers alike. Only income above each dollar level is taxed at the next higher rate. (It is necessary to point this out over and over and over, because anti-tax fanatics pretend [lie] that the highest rates apply to every dollar earned. Progressives MUST learn to say “This is a lie” every time that claim is made.)
Tax rate on Adjusted Gross Income (AGI) for an individual/for a couple or family
5% on every dollar… up to $25K (individual)/$50K (family)
(The first $25,000 you make, after all deductions and exemptions, would cost you $24/week in taxes—a total of $1,250).
10% on every dollar… above $25K up to $50K/above $50K up to $100K
(The first $25,000 is STILL at the 5% rate; only the NEXT $25,000 is at 10%.)
15% on every dollar… above $50K up to $100K/above $100K up to $200K
25% “ “ “ above $100K up to $200K/above $200K up to $500K
35% “ “ “ above $200K up to $500K/above $500K up to $1M
50% “ “ “ above $500K up to $1M/above $1M up to $5M
65% “ “ “ above $1M up to $5M/above $5M up to $10M
75% on … all income above $5M/above $10M
To calculate AGI, a taxpayer would deduct, from total earnings:
• $25,000 for each child under 18 and for dependent adult children or others (elderly parents, someone disabled, etc.) living at home
• the mortgage interest on one primary residence (where you live at least 180 days a year) up to the median value of all homes in your county of residence; OR, for renters, 1/2 of the monthly rent paid for a primary residence
• all documented medical expenses not covered by insurance
• all costs of education at an accredited school, college, or university through master’s level
• deductions to legitimate charitable 501c3 organizations that do not engage in partisan political activities, up to 25% of total gross income
So, let’s say the Smiths, a married couple with one 12-year-old child, gross $150,000 this year.
– First, they deduct $25K for their child, leaving $125,000.
– They’ve bought a $275,000 house—the median value for their county—and pay $2,300 a month for the mortgage: for the year, their deductible interest on the mortgage totals $8,000, leaving $117,000 in AGI.
– Their $4,000 in family dental care (including braces for the child) isn’t covered by their insurance, and they paid $2,000 in medical exclusions and co-pays, so they deduct $6,000, leaving $111,000.
– One spouse is working to earn a master’s degree, which cost her $9,000 for the year, leaving $102,000.
– They give $300/month ($3,600/year) to their church and another $1,400 annually to other charities, totaling $5,000, thus leaving $97,000 as their Adjusted Gross Income (AGI).
So, the first $50,000 is taxed at 5%: they owe $2,500. The next $47,000 is taxed at 10%: they owe another $4,700. Total tax bill: $7,200, or 7.4% of AGI, which turns out to be about 4.8% of their original (unadjusted) gross earnings of $150,000. Withholdings from their paychecks would total $600 a month.
In comparison, let’s assume—as he claims—that Donald Trump brings in $350,000,000 a year (from various licensing deals, schemes, and occasional graft and corruption). He gives away a total of $1,000 to charities (his youngest child’s school endowment), nothing to any church, he enjoys free medical and dental care from taxpayers, and he’s entitled to deduct $25,000 for his one child living at home and the mortgage interest on a primary residence—not the triplex at Trump Tower, which has no mortgage, as he owns it outright; and not the White House, which he does not own but is his primary residence, so … no mortgage deduction. So his total deductions are $26,000, leaving a personal AGI of $349,074,000.
His tax bill starts off identical to the other couple outlined above: $2,500 on the first $50,000 of income. And, like the Smiths, for the next $50,000, he owes 10%, or $5,000 more. A total of $7,500 on his first $100,000 of adjusted gross income, or 7.5% of AGI. Almost identical to the 7.4% paid by the middle-class Smiths.
For the next $100,000, Mr. Trump owes 15%, or $15,000;
for the next $300,000, 25%, or $75,000;
for the next $500,000, 35%, or $105,000;
for the next $4 million, 50%, or $2,000,000;
for the next $5 million, 65%, or $3,250,000; and
for the rest—for the remaining $339,074,000—he owes 75% in taxes, or $254,305,500.
That means that Mr. Trump would pay $259,758,000 on a gross income of $350,000,000, an overall tax rate of 74%. So while his gross income is 2,333 times as large as the Smiths’, his tax rate is only 10 times as big as theirs. What a bargain!
That tax rate would leave him a paltry $90,242,000 to support his wife and son. $7.5 MILLION per month. $1.735 MILLION per week. $247,238.35—almost the price of the Smiths’ house—a quarter of a million dollars every day, seven days a week, 365 days a year.
Try as I might, I can’t think of a single person I know who would find it hard to survive on $90 million a year. Can you?
This is a tax proposal that truly would Make America Great Again.
This is classic redistributive economics that can only function through big brother government. There would be little capital available for private investment, which is the fuel for a dynamic market economy. Liberals will contend that the government can be responsible for necessary capital expenditures.. But such a scheme would create an all powerful central government, even much more powerful than contemporary liberal administrations. Cronyism. logrolling and red tape would prevail over market forces.
The U.S economy would stagnate. Yes, income equality would not be as big an issue, but America’s role as a force for stability in the world rapidly diminish. In effect, what you advocate is Socialism 101 .
But even in Socialist regimes, an elite class is created. This elite class is not based on wealth, but on political power. Those running big government—those deciding who gets what and how much–constitute the upper, or ruling,class. Yes, there would be equality among all the rest are who not part of the government class. We’d all be equal–equally fed, clothed and housed–and equally devoid of the independence, individualism and entrepreneurial spirit that is characteristic of a democratic capitalist system.