How much could a tax on millionaires raise?
On Monday, the Obama administration will call for a new tax on income over 1,000,000. The details aren’t available yet, but various versions of of a millionaire’s tax have been floating around for some time now, so it’s possible to get a rough sense of what the tax could raise. (Andrew Harrer - BLOOMBERG) Back in early-2009, House Democrats proposed offsetting health-care reform by imposing a 5.4 percent surtax on income over 1,000,000 for joint filers, and 500,000 for single filers. The Joint Committee on Taxation estimated that the proposal would raise 460 billion between 2010 and 2019. Adjust for economic growth and a similar proposal scored from 2012 to 2021 would likely raise more than 500 billion. That would more than pay for the president’s jobs bill.Another option would be to create a series of tax brackets for millionaires. After all, someone making 1,500,000 annually is in a very different position than someone making 10 million annually. <a href="http://www.jordanheelswomen.net/"><strong>Air Jordan Heels</strong></a> Rep. Jan Schakowsky has advanced a proposal along these lines that would tax income between 1 million and 10 million at 45 percent, income between 10 million and 20 million at 46 percent, income between 20 million and 100 million at 47 percent, income between 100 million and 1 billion at 48 percent, and income over 1 billion at 49 percent. Her office estimates this proposal would generate 78 billion in revenue in 2011, which implies that it would raise close to, or perhaps more than, 1 trillion over the next 10 years, depending on how fast incomes rise.Something of a compromise proposal can be found in the Center for American Progress’s deficit-reduction plan (pdf), which proposed four version of a graduated surtax on incomes over 1,000,000. The lightest of <a href="http://www.jordanheelswomen.net/"><strong>Nike Dunk Heels</strong></a> these proposals raised 10 billion over three years with a surtax of one percent on all income over 1 million. The heaviest raised 75 billion over three years through a surtax of five percent on income between 500,000 and 5,000,000 and seven percent on income above 5 million.A final possibility would be to simply sunset the Bush tax cuts for income over 1 million. This is a proposal advanced by, among others, Sen. Chuck Schumer. The Center on Budget and Policy Priorities looked at this option and concluded it would raise about 400 billion when compared to a world in which all of the Bush tax cuts were extended. But compared to a world in which all of the tax <a href="http://www.jordanheelswomen.net/"><strong>Women Dunk SB Heels</strong></a> cuts for income over 250,000 expire — which is, remember, the administration’s current position -- the proposal is actually a tax cut of about 400 billion.The bottom line is that a proposal to tax income over 1 million could raise anything from very little money, as in the Center for American Progress’s plan for a one percent surtax, to around a trillion dollars, as in Schakowsky’s plan. There’s also the possibility for it to be, in reality, a large tax cut, if the administration trades their option to let some portion of the the Bush tax cuts expire in return for a small and politically popular tax increase on income over 1 million. We’ll know more tomorrow.
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