The top 1% paid $318 billion on AGI of $1.3 trillion. Raising that by half would cover 1.5 month of deficit.
To: Barack H. Obama, President of the United States
John Boehner, Speaker of the US House of Representatives
As you know only too well, the nation is facing a fiscal cliff at year end. In the absence of compromise legislation, tax rates in place for the past decade will rise to their previous levels and certain federal expenditures (principally defense) will be slashed.
You, Mr. President, maintain that before we can discuss cutting expenditures, we must raise the amount of tax revenue collected from those with incomes of $250,000 and above.
Another way in which you have described this is that the top one percent should do more, should assume more of their fair share, towards solving the nation’s fiscal burdens.
According to data from the US Treasury, cited by the Taxpayers Foundation, in 2009 there were 138 million returns filed by payers with positive adjusted gross income. The top one percent, 1.38 million filers, paid $318 billion on total incomes of $1.34 trillion. It was an effective rate of 24 percent.
How much more do you gentlemen think that we can get from them?
For the sake of argument, let’s assume that we were to raise the effective rate they are paying from 24% to 36%. If everything else were equal, it would raise $159 billion more in tax revenues.
Our deficit in October just passed was $120 billion, up from $98 billion the same month a year ago. At this rate, the increased tax revenue would cover a month and a half.
What are we going to do in addressing the other ten and a half months of red ink?
Here is another concern you might address: In the event that $159 billion was taken from the hands of these one-percenters, some part of it would not be spent on maids, yard work, boats, jewelry, cars and other disposable and or durable purchases. I don’t think you doubt this is true; the President believes we should take these revenues whatever the effect on economy, because it’s the fair thing to do.
But those now missing purchases would mean less people working to make the boats, fix the beds, or buy the automobiles which might have to be kept a year or so longer before trade in time. I don’t think you doubt it would have a negative effect, you just disagree on the amount.
I am not suggesting here a solution to the problem. Rather, I am trying to frame the debate in such a way that we can know just what might reasonably be expected from the top one percent.
I am hopeful you can include this in your debate. Please remember also what my grandmother used to say: When your outgo exceeds your income, then your upkeep becomes your downfall.
http://taxfoundation.org/sites/taxfoundation.org/files/docs/fed_indincometax_irssummary-2009-20111019-6.pdf This is the most recent data I can find available, and is quoted by the Taxpayers Foundation. Feel free to freshen the link.