no joke: introducing the millionaire’s tax!

Happy April Fool’s Day 2011.

As Julia Roberts’ Vivian Ward noted years ago in Pretty Woman: “Never joke about money.” So we won’t. Not even on our nationally-observed day for humor and verbal jest.

Which works just fine for my new favorite congressperson, Representative Jan Schakowsky (D-IL).

Last month, Schakowsky introduced the Fairness in Taxation Act, commonly known as the Millionaire’s Tax. It is a bill which proposes to “create new tax brackets for millionaires and billionaires,” so that someone making $1 million a year will be taxed at a higher percentage than some making $250,000 a year, just as someone making $50,000 a year is taxed at a higher percentage than someone making $10,000 a year. (Or at least, that’s how it’s supposed to work.)

Currently, our federal tax code sees all income of $373,650 and up as taxed at the same rate (35%). Which seems a bit odd. “This means that someone making two hundred thousand dollars a year and someone making two hundred million dollars a year pay at similar tax rates,” financial columnist for The New Yorker James Sorowiecki pointed out. “LeBron James and LeBron James’s dentist: same difference.” Which of course is ridiculous. Those zeroes at the end of one’s salary figure do matter. 

This goes back to the unnecessarily-annoying debate during the 2008 presidential campaign, which seems like a lifetime ago, when then-candidate Obama and candidate McCain argued endlessly about raising taxes on those with an income at or above $250,000. In this age of executive excess, why pick such a relatively low number?

Apparently, Rep. Schakowsky wondered the same thing. And decided to do something about it.

“The top one-hundredth of 1% now makes an average of $27 million per household per year. The average income for the bottom 90% of Americans? $31,244. It’s time for millionaires and billionaires to pay their fair share,” the congresswoman explains.

“The top tax bracket begins at $373,000 in annual income and fails to distinguish the merely “well-off,” from the “super-duper rich,” she wrote in The Huffington Post. “By introducing new tax brackets, we ensure a basic principal of fairness: those who have benefited the most from the opportunities that our great country provides should also invest in making those opportunities a reality for all Americans.”

Amen to that. (Oops. Sorry. Separation of church and state and all.)

Here’s the “fair and balanced” tax breakdown proposed in the Fairness and Taxation Act:

  • $1-10 million: 45%
  • $10-20 million: 46%
  • $20-100 million: 47%
  • $100 million to $1 billion: 48%
  • $1 billion and over: 49%

And the best part? The tax would magically create $78 billion in annual tax revenue. All without touching the piggybanks of 98% of us.

So who could possibly not support that? (Hint: Congress, of course, unfortunately, which now boasts 261 millionaires in its service.)

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Filed under Accountable Wealth, American Dream, Economic Justice, Fair Taxation

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