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The Democratic Tax Plan: Fining Success

Posted November 15, 2007

“The tax code already provides for ’surcharges’ on higher incomes. It is called tax brackets. The surcharge on incomes over $35,000 is already 66% if you make $50,000, 120% if you make $175,000 or 160% if you make more. And that’s just the difference in the marginal rates.” — J. Christoph Amberger

by J. Christoph Amberger, TodaysFinancialNews.com

Friday, November 16, 2007

Baltimore — (TFN): We had a bit of a situation here at our Baltimore headquarters the other day. A man pretending to be a gas inspector had been gaining access to some of our office buildings, stealing a few cell phones and wallets from unguarded desks.

“Creep” was a word used to describe him. “Criminal.” “Thief.” People were outraged at this invasion of their privacy — the loss of their personal property.

I couldn’t get that excited about two fifty-dollar phones and twenty bucks in a stolen wallet. Because that same day, Senator Clinton and Representative Rangel announced their intents on acquiring a far larger portion of private property and personal wealth, under the brand name of “progressive tax reform” and the slogan of “fairness and equity in the tax code”.

After decades of dragging their feet on dealing with the Alternative Minimum Tax trap for middle-class household, House Democrats suggest adding a “surcharge” of 4 percent or more to the tax bills of the nation’s wealthiest households.

Our socialist friends still squabble over just who qualifies as super-rich: Suggestions for cutoff to be spared from the AMT ran the gamut from $200,000, $150,000 or even $75,000.

A different “surtax” was proposed by the Tax Policy Center, a joint project of the Urban Institute and the Brookings Institution. That plan would eliminate the AMT and replace it with a 4 percent surcharge on income over $200,000 for families and $100,000.

Now, the tax code already provides for surcharge on higher incomes. It is called tax brackets. The surcharge on incomes over $35,000 is already 66% if you make $50,000, 120% if you make $175,000 or 160% if you make more. And that’s just the difference in the marginal rates.

Based on your average tax rate, a family making 25k a year hands over 8.19% of their income to the state. The prosperous $50k-a-year family spends 14.52% of their days working for the state — paying a 77% “surcharge”. The filthy-rich with $100k spend a fifth of each year to earn their 150% surcharge. And those super-rich making over $200k work 25% of the year for the public good… to earn their 205% surcharge.

And that’s under the Bush Administration’s tax reform!

So what’s another 4% among Comrades? “Only 2 percent of the whole population would have to pay it,” intones Leonard E. Burman, director of the Tax Policy Center.

A perfect scenario!

Of course, scraping the populist paint off the “surcharge” euphemism, what we really arrive at is a fine… levied on success, hard work, thrift and effort.

And it is not just a monetary fine. After all, most people go to work to make a living… earn money… not because they can’t think of anything less arduous or more pleasurable to do. Adding another 4% in taxes is the equivalent of another 14.6 days of uncompensated labor to the 91.25 days that you work without compensation each year. Another two weeks… if you’re the lucky sort and work weekends.

Three weeks if you work Monday through Friday.

There are felonies that cost you less prison time than that… plus your room and board is free.

And you save on judge and jury.

This trillion-dollar tax heist makes subprime look like a token spill at Chuck E. Cheeeze when it comes to the destruction of private wealth.

O happy days: Personally, I can’t wait to experience this new era of equality, freedom, and the segregated pursuit of happiness. I’d expect that many Americans might prefer to experience this trillion-dollar raid on their life, labor, and personal property from the vantage point of a system that smacks a tad less of class struggle and old-school socialism.

Like China. Or Russia, maybe.

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Posted by J. Christoph Amberger · Filed Under Politics 

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