The higher marginal tax rate proposal is better than the current 39%, but it’s not enough at all, and I think this higher tax rate proposal may ultimately be a smokescreen. If the other parts of the Trump regime’s tax plans pass, a slightly higher marginal tax rate won’t be that significant. The pass-through tax rate proposal of 15 percent is of particular concern.
There is enormous corporate welfare and tax breaks for the rich already. Government welfare that helps poorer people is ultimately sort of like a minor part of a mountain.
TOP WHITE HOUSE adviser Steve Bannon is pushing for tax reform to include a new 44 percent top marginal tax rate, hitting people who earn more than $5 million a year, with the revenue paying for tax cuts for the rest, according to three people who’ve spoken to him recently.
The top rate is now 39.6 percent and most Republicans have been planning to lower it significantly as part of tax reform. The plan Trump put out previously would have only three brackets, with the top one brought down to 35 percent.
According to IRS data, just over 43,000 people filed tax returns for the year 2014 claiming income of at least $5 million, accounting for $600 billion in taxes, or 8.8 percent of the total taxes paid.
The new rate would only apply to about a third of that money, as the 44 percent kicks in at the $5 million level. Still, the hike would pull in around $18 billion per year, or $180 billion over 10 years.