After weeks of debate and negotiations between President Obama and House Speaker John Boehner over the looming “fiscal cliff” deadline, Boehner has decided to push his so-called Plan B to the House for a vote today, confident it would pass. That plan includes a return to pre-Bush era tax rates for those making $1 million or more annually. President Obama’s original plan had set the threshold to $250,000 and his compromise is $400,000 in annual earnings.
Ninety percent of Americans within our current regressive tax system actually pay higher payroll tax rates than top earners, specifically, 6.2%. Those making over a cap of $110,100 pay lower payroll taxes on their excess earnings – for example, someone making $5 million a year pays an effective rate of only 0.1%. Democrats want to see the $110,100 payroll tax cap increased to $250,000 but Republicans are adamantly against it.
In light of the on-going discussions over taxing the rich, Huffington Post reporter, Chris Weigant recently published an analysis entitled, “If We’re Going to Tax the Rich, Then Let’s Tax the Rich” which provides simple and obvious solutions that are not even being discussed by law makers or most of the media. Making the case of “how timid the proposals currently being discussed truly are,” Weigant breaks down the existing disproportionate tax rates Americans of different incomes pay, the various income caps, and the Alternate Minimum Tax – all of which serve to enrich the rich and impoverish the rest of us.
Weigant also offers up such specific ideas as capping deductions at $250,000 which would only affect wealthy folks, creating new tax brackets relevant to today’s economy, and implementing the same tax rate for all forms of income regardless of whether it’s from a salary or from capital gains and dividends.
GUEST: Chris Weigant, Huffington Post blogger, author of How Democrats Can Take Back Congress, published under the pseudonym of Tom Paine. Chris also blogs at www.chrisweigant.com
Click here to read Weigant’s article about tax structures and how to fix them.