ABC, CBS and NBC reporters over the past two days have relayed how the Obama administration proposes to cut the annual federal deficit from $1.3 trillion to $533 billion in four years by cutting spending on the war in Iraq and raising the income tax rate for those earning more than $250,000. Not considered: How since the Bush tax cuts the revenue paid by the richest -- and their share of total income taxes collected -- have been rising year-by-year. So will a tax hike, from 35 to 39.6 percent, really increase the amount the wealthiest pay, or will they find ways to avoid reporting income and thus the government will see little, if any, additional revenue -- to say nothing about the wisdom of alerting investors during an economic downturn that their tax rate will soon jump?
Monday night, CBS's Chip Reid reported: “Most of the savings would come from winding down the war in Iraq, ending the Bush tax cuts for people making over $250,000 a year and cutting spending.” Jake Tapper, also Monday night, on ABC: “Another source of revenue being proposed -- allowing the Bush tax cuts for a family earning over $250,000 a year to expire in 2011, increasing that tax rate from 35 percent to 39.6 percent.”
On Sunday's NBC Nightly News, Chuck Todd explained how the Obama advisors plan to cut the deficit by more than half: “They believe they can do it because of two big changes: The Iraq war, winding that down, the cost of that obviously goes down; and then getting rid of those Bush tax cuts on the wealthiest Americans. That will bring in more revenue.”
For 2006, it took an Adjusted Gross Income of $153,542 to be in the to five percent of earners and an AGI or $388,806 or more to be in the top one percent.
A Tax Foundation report from last July listed revenue trends in what the IRS has collected:
Total revenue received from the top one percent:
2003: $256 billion
Share of total income taxes collected which were paid by the top one percent:
Looks like the richest are already pay more each year. Let's hope future coverage, as Obama unveils his actual budget plan, explores the topic.