Here’s a little bit of a quickie to make up for all those missing updates a week ago.
Watching Erin Burnett on CNN yesterday, she was talking about a congressional plan to fund the payroll tax deductions with a millionaire surcharge. I.e. anyone who makes over 1 million dollars will pay a flat-rate tax on every dollar they make after they hit the 1 million mark.
Generally each plan who suggests this is a 1 or 2 cent surcharge, per dollar. So that means that if you make 4 million dollars a year you pay the regular tax rates on your first million, then you pay an additional 1 cent per dollar on everything else. So of the remaining three million, you’d end up paying an extra $30,000 with this surcharge.
I don’t know about you, but if I’m making 4 million a year, I’d be willing to pay an extra 30 grand, myself; if it meant that social services in the country I live in will cease to function if I don’t.
What brings this all up is Ms. Burnett’s comment on the plan. She said (not verbatim, but as close as I can recall), “I hear this millionaire surcharge plan come up a lot. Now if everyone who suggested it got their way, there’d be like…20 surcharges on millionaires.”
She’s right; but you know what? I’m okay with that. If we assume that each surcharge is for the greater amount of 2 cents per dollar that means that each dollar a multi-millionaire income maker brings in would get a 40 cent surcharge. So using our example, they’d end up paying $1,200,000 in surcharges. It’s basically a 40% tax, admittedly on top of the 15% tax they’re already paying for a total of 55% effective tax rate.
And quite frankly, if you have a personal income of 4 million dollars…I don’t really mind you paying that much in taxes, to be totally honest.
Richard C. Shaffer 