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New Millionaire Income Tax Bill Introduced

Posted By Jim On 03/17/2011 @ 2:20 pm In NEWS | 84 Comments

Representative Jan Schakowsky (D-Illinois) introduced [3] new legislation, the H.R. 1124 Fairness in Taxation Act [4], on Wednesday, March 16th, that would introduce new tax brackets for those who earned more than $1 million dollars a year. The current top income tax rate [5] is 35% on income starting at $373,650 and the new legislation would introduce five new brackets, starting at $1 million dollars.

The new brackets would be:

  • $1 – 10 million: 45%
  • $10 – 20 million: 46%
  • $20 – 100 million: 47%
  • $100 million – 1 billion: 45%
  • $1 billion+: 45%

I don’t know what’s more stunning: the reality that there are people who make over a $1 billion a year or that there are people who make over a billion a year and pay the same tax rates as someone making a fraction of that.

In addition to adding new brackets, the bill would also tax capital gains and dividend income as ordinary income for those whose income was over $1 million. According to the Citizens for Tax Justice, these new rates and changes would raise $78 billion, though it’s unclear how that number was calculated.

As for historical precedence, the last time the top rate was over 40% was back in 1986 when the top rate was 50%. Just a few years earlier, in 1981, the top rate was 70% for incomes over $215,400 ($524,421.99 in 2011 dollars). Before you think those rates were high, the top rates have always been very high, peaking into the ninety-percents through World War 2 until the early 60’s. The Tax Foundation has a list of historical tax rates since 1913 [6].

What do you think of these new rates? Would youl ike to see them implemented?

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[2] Email: mailto:?subject=http://www.bargaineering.com/articles/millionaire-income-tax-bill-introduced.html

[3] introduced: http://schakowsky.house.gov/index.php?option=com_content&view=article&id=2877:schakowsky-introduces-bill-to-tax-millionaires-and-billionaires&catid=22:2011-press-releases

[4] H.R. 1124 Fairness in Taxation Act: http://www.opencongress.org/bill/112-h1124/show

[5] income tax rate: http://www.bargaineering.com/articles/federal-income-irs-tax-brackets.html

[6] historical tax rates since 1913: http://www.taxfoundation.org/publications/show/151.html

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