When I was a kid, to me, millionaire meant someone who had amassed net wealth of a million dollars. As my life enters it's 8th decade, a lot of inflation has happened and now a millionaire is someone with an adjusted gross income of one million dollars or more in a year. I just paid our taxes. I can say with complete confidence that our annual household income will never get close to a million dollars, though we do expect our federal taxes to be going up significantly after this year.
Our particular tax household is temporarily (until retirement in a few years) doing well enough that a small part of our adjusted gross income lies north of the income threshold that will see an increase in marginal tax rate when the Bush Tax Cuts expire at the end of 2012. Our federal taxes will also rise if the Scrap the Cap movement in Congress succeeds in repealing the FICA limit that caps our liability. I strongly support both the Expiration and Scrap initiatives, even though the measures will cost my household a lot of money (for a year or two, until we retire and fall back below the income threshold). I suppose that makes us a little like the benighted people of Kansas in Thomas Frank's book, What's the Matter with Kansas, who vote against their personal economic interests because of social issues. I do the same for the sake of a little economic justice in the tax code.
After I finished my taxes I followed the advice in Joan McCarter's front page piece yesterday and checked to see how the millionaires were doing compared to the Left household. Read on to see how the results convinced me more than ever that the Buffet Rule/Reagan Rule, must be implemented as a matter of simple tax progression and economic justice.
Nobody who makes more money than we do should pay less federal tax. Yet, as it turns out, even though our household is far ahead in earned income of the average American household, we come up worse off than those average households in terms of number of millionaires paying less federal tax. The White House site with a Buffet Rule calculator says this:
About 55,000 millionaires pay a lower effective tax rate than millions of middle-income Americans.When I ran the numbers from our tax return, the calculator told me that 56,300 millionaires enjoyed a lower Buffet Number than our household. It suggested to me that our effective tax rate is really high compared to millionaires, if we're doing that much worse against them than the average American household.
How many millionaires paid a lower effective tax rate than you? Find your Buffett Number using the calculator on the right.
The answer is not to lower, or even to refuse to raise our taxes. Scrap the Cap will solve future Social Security problems and expiration of the Bush Tax cuts on higher earning households is well neigh inevitable. But none of that is enough. Millionaires must not enjoy a lower effective tax rate than my hard working household. Millionaires didn't succeed that much without the support of the community and commonwealth and needn't be coddled at tax time. They have large disposable incomes. Unless they are idiots they can afford to pay their fair share. I want my household to pay its fair share, but I sure as hell want those doing even better to pitch in commensurate with their success as well.
President Obama has taken an unequivocal stance on the Buffet Rule. Every Kossack, from the most suspicious Obama doubter to the most besotted Obamabot, should support, call Congress, call the White House, comment, diary and vote to convince the next Congress and the present one to enact a millionaire surtax rule, or Buffett Rule, or Reagan Rule or Tax Justice Rule No. 1 or whatever you name it. Let's get 'er done.