by Richard Leonetti
The total raised from income taxes (all numbers the latest from 2008) is $1.031 trillion. To raise an additional $1.5 trillion, the current deficit, taxes would have to be increased across the board by 145%. If you do not want to cut spending, this is a big increase to sell.
But, the President only wants to raise them on the very rich. The top 1% of earners have incomes of $380,354 and up. For only the very rich to pay for the deficit, they would need to pay $1.5 million each. This will be tough for some of them–especially those not earning $1.5 million!
Even if it were spread out, the new top marginal tax rate would need to be a lot more than 100%. Alternatively, a flat tax of 87% would do it! Look what everyone can look forward to: if you can get you income up over $380,000 you will be left, after tax, with almost $50,000 to take care of your mortgage, house payments, state taxes, property taxes and the kid’s college tuition.
If this sounds like a problem, maybe we do need to look at spending, including the big entitlements, and get realistic about an ongoing, yearly deficit of $1.5 trillion.