Another day in Washington DC, another ironically named piece of legislation is proposed.
Meet the Fairness In Taxation Act.
The current top tax bracket is 35%. The new Schakowsky tax brackets, for income starting at $1 million would be:
* $1-10 million: 45%
* $10-20 million: 46%
* $20-100 million: 47%
* $100 million to $1 billion: 48%
* $1 billion and over: 49%
That is just the Federal Income Tax rate being proposed. We must remember that many Americans pay income tax on a state and local level. Cities and counties in Alabama, Arkansas, Colorado, DC, Delaware, Iowa, Indiana, Kentucky, Maryland, Missouri, New York, Ohio, Oregon and Pennsylvania all have individual income taxes.
If you combine the new rates with the individual state income taxes levied by 43 of the 50 states, top earners will easily eclipse the 50% taxation mark. And for people who live and work in New York City where the combined top personal tax rate is 12.62%, their rate would now pass 60%.
It is not as if these new taxes would dig us out of the massive deficit hole in which we are currently wallowing. According to the very liberal organization Citizens for Tax Justice, the Fairness in Taxation Act would only raise about $79 billion if enacted in 2011. The current estimate for the 2011 fiscal deficit is $1.267 TRILLION. By collecting another $79 billion from wealthy people (who might otherwise spend that money on goods and services which might, in turn, create jobs for some of the million of unemployed), Schakowsky's "fairness" tax barely dents the deficit.
When you are trying to sow the seeds of class warfare, the chant of 'tax the rich' may appeal to your base, but it is not a feasible solution.
According to a recent National Review story from Kevin D. Williamson, there are not enough rich people to tax away the deficit... even if we taxed them at 100%. He makes some very clear points:
But say we wanted to balance the budget by jacking up taxes on Club 250K. That’s a problem: The 2012 deficit is forecast to hit $1.1 trillion under Obama’s budget. (Thanks, Mr. President!) Spread that deficit over all the households in Club 250K and you have to jack up their taxes by an average of $500,000. Which you simply can’t do, since a lot of them don’t have $500,000 in income to seize: Most of them are making $250,000 to $450,000 and paying about half in taxes already. You can squeeze that goose all day, but that’s not going to make it push out a golden egg.
He further clarifies with unimpeachable stats:
The Bush “tax cuts for the rich” cost the Treasury about $800 billion in forgone revenue; the Bush tax cuts for the middle class cost trillions – 2.2 of them, to be precise.
Williams' piece concludes with this bit of brilliance:
there simply aren’t enough rich people for us to pillage or enough loot to make it all work. We have finally, as the lady predicted, run out of other people’s money.
And yet Congresswoman Schakowsky will continue with her folly. The Illinois Democrat and her nine co-sponsors (all Democrats) have proposed this piece of legislation claiming that they are only doing what a majority of the American people are asking them to do. I wonder if she felt the same way when a majority of Americans were against the Healthcare Bill?
Here, for your edification, is the Congresswoman making her pitch for the new tax brackets.