The “Affordable Health Choices Act of 2009″ imposes a “surtax,” or income tax increase, on all Americans making $280,000 a year or more.

Under the bill, those making $280,000 ($350,000 for couples) will have their taxes increased by 1 percentage point, those making $400,000 ($500,000 for couples) by 1.5 percentage points, and those making more than $800,000 ($1 million for couples) by 5.4 percentage points.

This would make the top marginal federal tax rate 40.4% – the highest it has been since the Clinton years. If President Obama keeps his promise to let the Bush tax cuts expire (which he reiterated at a Portsmouth, NH town hall on Tuesday) that top marginal rate will increase to 45% – the highest it has been since the Reagan tax cuts of 1986.

If a review in 2013 by the Congressional Budget Office determines the health care overhaul has failed to save at least $175 billion, the bill provides for an automatic doubling of the tax increases on the lower two of those three incomes.

Further, with state income taxes rising across the country, this surtax and automatic 2013 increase would put the top combined federal-state income tax rates in over half of all states at 50% or more.

Source: HR 3200 §59C

Todd Beeton at MyDD argues that the right is out of touch on taxes and quotes Gallup. It turns out that his argument is mere sophistry. Gallup says:

A new Gallup Poll finds 48% of Americans saying the amount of federal income taxes they pay is “about right,” with 46% saying “too high” — one of the most positive assessments Gallup has measured since 1956. Typically, a majority of Americans say their taxes are too high, and relatively few say their taxes are too low.

Compare these with who actually pays taxes who actually pays taxes, which Ari Fleischer reminds us of. Gallup says that 48% say that they are paying “about right”. But 40% don’t actually pay income taxes:

When you make almost 26% of the income and you pay only 0.6% of the income tax, that’s a good deal, courtesy of those who do pay income taxes. For the bottom 40%, the redistribution deal is even better. In 2001, these 43 million Americans, who earn less than $30,500, made 13.5% of the nation’s income but paid no income tax. Instead, they received checks from their taxpaying neighbors worth $16.3 billion. By 2005, those checks totaled $33.3 billion.

If I didn’t pay tax, I would probably argue that I am doing “about right” too. The 8% that does pay taxes and says that they are “about right” is what Beeton is really arguing about that. That’s not a really compelling argument. And then, according to Gallup, there are 3% who think that they are paying too little.

So 11% of the population both pays taxes and thinks that they are paying “about right” or “too little”. And 46% think that they are paying “too much”. So about 1 in 5 tax payers are happy with what they are paying, while 4 in 5 income tax payers think they are paying too much.

In fact, Gallup’s numbers support Fleischer’s argument, not Beeton’s. As Fleischer notes, George W. Bush took people off the tax rolls:

According to the CBO, those who made less than $44,300 in 2001 — 60% of the country — paid a paltry 3.3% of all income taxes. By 2005, almost all of them were excused from paying any income tax. They paid less than 1% of the income tax burden. Their share shrank even when taking into account the payroll tax. In 2001, the bottom 60% paid 16.3% of all taxes; by 2005 their share was down to 14.3%. All the while, this large group of voters made 25.8% of the nation’s income.

Of course the numbers of “about right” are at an all-time high. The number of people not paying income taxes are at an all-time high.

Clive Crook reminds us that our tax code is one of the most progressive in the developed world. And the Democrats want to take even more from the wealthy:

Mr Obama intends to squeeze the rich, but the scope for this may be more limited than US liberals would wish. Few Americans seem aware that the US income tax code, as a recent Organisation for Economic Co-operation and Development study showed, is already one of the most progressive.* Even before the rise in top marginal rates promised by Mr Obama, the US income tax collects 45 per cent of its revenues from the highest-income decile. Compare that with Britain at 39 per cent, Canada at 36 per cent, France at 28 per cent, Sweden at 27 per cent and an OECD average of 32 per cent.