They have a petition that calls on Congress and President Obama to immediately reverse the Bush-era tax cuts for people with taxable incomes over $235,000. The increased revenue, an estimated $43 billion a year, says the group, should go toward making long overdue investments in education, health, transportation, infrastructure, and green energy systems.
Those hit by the change would see a minimal tax increase-from 35 percent to 39.6 percent, a rate still far lower than the one under President Reagan. Even though this would raise $43 billion per year, it would only affect a very small fraction of US taxpayers-about 2.5 percent.
The Bush-era tax cuts gave $700 billion in breaks over eight years to people with annual incomes more than $200,000. The US borrowed money to make these tax cuts possible, even as the nation's schools, infrastructure, research institutions and social services were in need of new investments. Of course, it takes money to make money. So these wealthy Americans made out like bandits during the bubble economy that eventually burst.
Note that in 1955, the top 400 taxpayers paid 51 percent of their average income of $12.3 million (adjusted to 2006 dollars). In 2006, the most recent data available, the top 400 paid 17.2 percent of their average income of $263 million in federal taxes. And that 17.2 percent rate is much lower than tax rates for the rich in , When the rich paid much higher taxes there was high economic growth and much more shared national prosperity with low economic inequality.
Interestingly, as a presidential candidate, Barack Obama pledged to raise taxes on households with incomes over $250,000 by reversing the 2001 and 2003 Bush tax cuts. Nevertheless, a majority of these high-income individuals, 52 percent, still voted for him.
If so many of the wealthy seem to be good enough citizens to support this, then why don't we hear more about this? Why is there any reluctance by Congress to make this happen? What better time than now, when paying for genuine health care reform could benefit from taxing the wealthy more?