If enacted, People’s Lobby’s Fair Tax Bracket Re-institution Act (FTBRA) would add an IRS tax bracket so that:
- Those amounts earned over $5 million annually will be taxed at a 50% flat rate
- Those amounts earned over $10 million annually will be taxed at a 70% flat rate.
- These will be flat tax rate brackets with no deductions, so that loopholes do not allow the effective tax rate to be significantly less than IRS codes purportedly call for on the rich.
The $5 million household would have to struggle by on a net income of about $4 million per year; the $200 million household on about $126,500,000 per year; the $1 billion household on about $646,500,000 per year.
If we had kept the site even more progressive tax rates that existed during the Eisenhower, Kennedy, and Nixon administrations, we would not have the wealth disparity and economic breakdowns that we are having today.
| If FTBRA existed, net income would look something like this. | ||||
| Income | Ested Tax % | FTBRA % | FTBRA % | Net Ested |
| 20% | 50% | 70% | Income | |
| $1,000,000 | $200,000 | $800,000 | ||
| $2,000,000 | $400,000 | $1,600,000 | ||
| $3,000,000 | $600,000 | $2,400,000 | ||
| $4,000,000 | $800,000 | $3,200,000 | ||
| $5,000,000 | $1,000,000 | $4,000,000 | ||
| $10,000,000 | $1,000,000 | $2,500,000 | $6,500,000 | |
| $20,000,000 | $1,000,000 | $2,500,000 | $7,000,000 | $9,500,000 |
| $50,000,000 | $1,000,000 | $2,500,000 | $21,000,000 | $25,500,000 |
| $100,000,000 | $1,000,000 | $2,500,000 | $35,000,000 | $61,500,000 |
| $200,000,000 | $1,000,000 | $2,500,000 | $70,000,000 | $126,500,000 |
| $500,000,000 | $1,000,000 | $2,500,000 | $210,000,000 | $286,500,000 |
| $1,000,000,000 | $1,000,000 | $2,500,000 | $350,000,000 | $646,500,000 |
| The second thing to note is that the overall tax rates are really not that high. Contrary to concerns about socialism or a government takeover, the richest Americans, those earning an average of $345 million in 2007, paid about 16.5 percent in federal income taxes. | ||||
Today’s top tax bracket, depending on whether Bush’s tax cuts expire or not in January 2011, are supposed to pay 35% now or 39.6% if the Clinton rates are reinstated.
As a recent IRS tax analysis by the Quick & the ED shows: “The second thing to note is that the overall tax rates are really not that high. Contrary to concerns about socialism or a government takeover, the richest Americans, those earning an average of $345 million in 2007, paid about 16.5 percent in federal income taxes.” http://www.quickanded.com/2010/02/effective-tax-rates-of-the-richest-400-americans.html
Forbes comes to a similar conclusion, as do tax experts like Author David Cay Johnston of Perfectly Legal.
