Today's clarion call from the Republican Party is "redistribution." At the root of this charge is that President Obama is suggesting that the marginal tax rate on Adjusted Gross Income above $250,000 be increased from its current value of 35% to 39.6%, the value is was under President Clinton when the budget was last balanced.
So if I am fortunate enough to attain a AGI of $250,001, on that last dollar I pay 39.6 cents in tax rather than 35 cents. Rest assured fellow Kossacks, I'll never notice this if it happens and I be happy to pay it if I did.
I made a graph of the incremental tax burdens which would accrue to people making between $250,000 and $1,000,000 dollar to illustrate that this change in tax policy is not very significant. A data table showing the impact is below the fold
AGI Extra Tax
$250,000 $0
$300,000 $2,300
$350,000 $4,600
$400,000 $6,900
$450,000 $9,200
$500,000 $11,500
$550,000 $13,800
$600,000 $16,100
$650,000 $18,400
$700,000 $20,700
$750,000 $23,000
$800,000 $25,300
$850,000 $27,600
$900,000 $29,900
$950,000 $32,200
$1,000,000 $34,500
These are not big numbers. Consider someone with an AGI of $500,000. People in this income bracket tend to have large investment holdings which often change in value by more than the $11,500 incremental tax burden that is in play. My point is, that they are not likely to even notice this incremental burden, while the benefits of balancing the bugdet would be felt by the whole country.
These numbers are not large enough to support the dire apocalpytic warnings that the republicans are pushing. Perhaps there concern is that this is the first step in delving into the whole rigged game. Someday we'll have a truly progressive president who goes after the preferential treatment of investment income over salaries. That is a day that I am really looking forward to.