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Law, Money and Finance, Politics, Public Policy

Progressive + Surtax

The Democrats want to spend, so they have proposed adding a “surtax” of 5.6% for family incomes of more than $1M dollars. In effect, they propose a new bracket, for those making over $500,000 a year, regardless of where the income originates – all to cover one month of the current deficit spending.

Single Married, filing jointly Head of Household
10% Bracket $0 – $8,500 $0 – $17,000 $0 – $12,150
15% Bracket $8,500 – $34,500 $17,000 – $69,000 $12,150 – $46,250
25% Bracket $34,500 – $83,600 $69,000 – $139,350 $46,250 – $119,400
28% Bracket $83,600 – $174,400 $139,350 – $212,300 $119,400 – $193,350
33% Bracket $174,400 – $379,150 $212,300 – $379,150 $193,350 – $379,150
35% Bracket $379,150+ $379,150+ $379,150+

The “rich” already pay more income tax the more they earn. Even the mortgage deduction disappears under the “alternative minimum tax.”

Here’s what the “progressive tax” means in dollars paid:
$0 – $17,000 10% of taxable income
$17,000 – $69,000 $1,700 plus 15% of excess over $17,000
$69,000 – $139,350 $9,500 plus 25% of excess over $69,000
$139,350 – $212,300 $27,087.50 plus 28% of excess over $139,350
$212,300 – $379,150 $47,513.50 plus 33% of excess over $212,300
$379,150 – $1,000,000 $102,574 plus 35% of excess over $379,150
$1,000,000 + $217,297 plus 41.6% of excess over $1,000,000

From the CBO letter to Senator Reid

Dear Mr. Leader:
As you requested, CBO and the staff of the Joint Committee on Taxation (JCT) have
estimated the budget impact of S. 1660, the American Jobs Act of 2011, as introduced in
the Senate on October 5, 2011. CBO and JCT estimate that, in total, enacting S. 1660
would decrease deficits by about $6 billion over the 2012-2021 period (see enclosed table).
That estimated deficit reduction of $6 billion over the coming decade is the net effect of
$447 billion in additional spending and tax cuts in titles II through III and $453 billion in
additional tax revenue from the surtax specified in title IV.
S. 1660 is similar to S. 1549, the American Jobs Act of 2011, as introduced in the Senate on
September 13, 2011. Provisions in title I, II, and III related to both federal revenues and
spending are identical for the two bills. The only difference between the bills is that S. 1660
replaces the provisions in title IV (Offsets) of S. 1549 with a surtax of 5.6 percent, starting
in 2013, on a taxpayer’s modified adjusted gross income in excess of $1 million (or
$500,000 in the case of a married individual filing a separate return), indexed for inflation.
JCT estimates that title IV of S. 1660 would increase revenues by $453 billion over the
2012-2021 period, whereas title IV of S. 1549 would increase revenues by $450 billion
over that period.
If you wish further details on this estimate, we will be pleased to provide them. The
primary CBO staff contact is Theresa Gullo.
Sincerely,
Douglas W. Elmendorf

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Conservative Christian Family Doctor, promoting conservative news and views. (Hot Air under the right wing!)

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