A proposed Fairness in Taxation Act would create a higher federal tax rate for millionaire and billionaire households. Introduced by Rep. Jan Schakowsky (D-IL), a member of President Obama’s 18-member Fiscal Commission, the new legislation would create five new tax brackets for wealth levels ranging from $1 million to $1 billion and over.
The Fairness in Taxation Act would realize the worst fears of millionaire households. According to our research, nearly three-quarters are most concerned about an increase in taxes, while nearly 40% would have to adjust their investment strategy accordingly. In another survey of those with over $500,000 of investible assets, more than half of respondents said that cutting government spending was the best way to reduce the deficit. Not surprisingly only 14% recommended raising taxes.
The current top tax bracket begins at $373,000 in income and fails, Sharkowsky said, “to distinguish between the ‘well off’ (who make several hundred thousand dollars a year) and billionaires.”
The new tax brackets would be:
$1-10 million: 45%
$10-20 million: 46%
$20-100 million: 47%
$100 million to $1 billion: 48%
$1 billion and over: $49%
The bill would also tax capital gains and dividend income as ordinary income for those taxpayers with income over $1 million. Schakowsky estimates that the legislation, if enacted in 2011, would raise more than $78 billion.
In a statement, she said, “In the United States today, the richest 1% owns 34 % of our nation's wealth - that's more than the entire bottom 90%, who own just 29% of the country's wealth. And the top one-hundredth of 1% now makes an average of $27 million per household per year. The average income for the bottom 90% of Americans? $31,244. It's time for millionaires and billionaires to pay their fair share. This isn't about punishment or revenge. It's about fairness. It's about avoiding budget cuts that harm middle class families and those who aspire to it. We can choose to cut education, job creation and health care, or we can choose to ask those who can contribute more to do so."