Of course, what the chart doesn't show is that if most of the earnings of a millionaire come from investment earnings, the tax rate drops appreciably.
For nearly 50 years, corporations and the most affluent Americans have gotten one income tax break after another. There have been occasional minor upticks in their rates, but the trend has been steadily downward. The purveyors of the idea that the wealthy still pay too much and corporations suffer from their tax burden compared with their counterparts in nations with which the United States competes are forever hard at work getting those ideas transformed into policy. The field of reformers with corporate lobbyist credentials is large.
This past year, some new groups have formed to carry the fight forward. The likelihood of anything major happening in the coming election year is slim to nil, but everybody wants to hit the ground running in 2013, no matter what the outcome of the election. The lobbyists don't set up tent camps in public parks or do protest marches to close the ports. They prefer, in fact, to carry on much more quietly behind the scenes. Why mess with what works?
John Buckley, a tax professor at Georgetown University Law Center, said that during the most recent major U.S. tax overhaul in 1986, businesses formed a large coalition to support it.
"They were able to shape it," Buckley said, and "that's what people want to do now."
The uptick in lobbying activity follows a proposal two months ago by U.S. Representative Dave Camp, chairman of the tax-writing House Ways and Means Committee. Camp, a Republican from Michigan, said he wants a lower corporate rate, an exemption for overseas profits and other changes.
Among the newcomers are the Tax Reform Coalition, backed by companies like American Express and Xerox. The coalition filed its lobbying application papers with Congress last week.
Forming up in October was the RATE Coalition, Reforming America's Taxes Equitably. Lowering the corporate tax rate from the current 35 percent is the key issue for the coalition, which so far encompasses 25 heavy-hitting members, including Boeing, Verizon, Intel, Ford and UPS.
If the corporate tax rate were dropped to 35 percent to 28 percent, the rate some would prefer to see although they'd really prefer 25 percent, it would cost the Treasury $718 billion in revenue over 10 years.
Then there is the WIN America campaign. It seeks to repatriate $1.4 trillion in foreign profits to the States. Blocking this, WIN America says, are "disincentives" that keep the money "trapped" overseas. Those disincentives? Having to pay the 35 percent the corporate tax rate on that money earned overseas. Instead, the campaign says, the money gets spent on foreign acquisitions and creating jobs for foreigners. If it were returned here under a lower tax rate, it would generate 2.5 million to 2.9 million new American jobs, so they claim.
In addition to lowering the corporate tax rate, the range of "solutions" being proposed for comprehensive reform include variations on the regressive flat tax, a favorite of libertarians and the ultra-rich for decades. None is quite so draconian as Herman Cain's 9-9-9 proposal, but they all have in common one thing: smashing the whole concept of progressive taxation, a process that got seriously under way in the administration of Ronald Reagan with the elimination of several tax brackets on the grounds of "simplification."
In reality, as we have learned all too well over the past 30 years, the real purpose was an upward transfer of wealth. It worked beautifully. But it didn't achieve all its backers desired. Bill Clinton boosted taxes on the wealthy a bit, and George W. Bush reversed that move and then some, transferring hundreds of billions to the already-haves and setting the stage for gutting federal programs on the grounds that the government doesn't have the revenue to pay for them.
Now the same people, or ideological descendants such as the tax-cutting poster-boy Paul Ryan, want to do more of the same because they're just not satisfied with the wreckage and inequalities they've already created. We'll be hearing a lot more from them in 2012. Billions will be spent getting out their message and softening resistance. When the message is about taxes being too high, few Americans can resist saying yes regardless of the reality. The people the corporate lobbyists will actually be talking to, however, whispering to, sit on the House Ways and Means Committee.