In praising Congress’s huge new tax increase on the wealthiest Americans, President Obama was quoted New Year’s Day in the Wall Street Journal as saying that “millionaires and billionaires” will finally “pay their fair share.”
According to preliminary numbers from Tax Foundation Chief Economist William McBride,
The tax plan approved this week raises the top marginal rate to 39.5 percent on those making over $400,000/$450,000 and their capital gains rate rises from 15 to 20 percent. Two other provisions also limit the value of their deductions. Taken together, McBride estimates the top .7 percent — roughly 1.1 million of 143 million tax returns — will pay about 40 percent of all federal income taxes.
At the other end of the wealth scale, the bottom 40% do not pay federal income tax, and in some cases, actually receive refunds from the government,
“It creates huge divisions in society and breeds contempt. It’s class warfare. It is also unsustainable because it disconnects voters. The bottom half of the population pays no income tax. That’s hugely disruptive. Those folks now have an incentive to lobby for more federal spending and it disconnects them from the cost of the federal government.”
The top .7% earn about 20% of the nation’s income, but will now pay 40% of the federal taxes – double their share of the total income, while the bottom 40% pay no federal taxes, and some even receive refunds having paid no taxes at all.
Do you think Obama agrees that the wealthy are now paying their fair share, as he stated Tuesday, or will he raise their taxes even higher at some future date to pay for his overspending?