by Eric Martin
Matt Yglesias does a good job beating back a recent example of the now familiar marginal tax rate mendacity (the disingenuous argument that a family earning slightly more than $250,000 is facing a sharp tax increase if and when Obama raises the marginal rates on dollars earned above $250,000 and begins phasing out deductions). In the process, Matt brings up an argument that I'm surprised doesn't get more play:
That said, I wouldn’t have a problem with launching a new, slightly higher rate, starting at $500,000 and a higher one starting at $1 million and another at $2 million another at $4 million another at $8 million and another at $16 million. I don’t see any reason to think that the progressivity of the scale should max out at $250,000 when obviously there’s a huge difference between someone earning that much money and someone earning ten times that amount.
Absolutely. Especially with respect to phasing out deductions and other breaks: it would make a lot more sense to start that at a higher bracket. But as of now, there is only one higher bracket ($372,950 and above for 2009).
On a side note, the chart below shows a comparison of recent marginal rates for various brackets. Clearly, the socialist Barack Obama plans on soaking the rich as never before. I mean, you'd have to go all the way back to the Clinton administration to find marginal rates on the upper brackets that high! I know this point has been made before, but then, we just had a series of demonstrations across the nation sparked, in large part, by the perception that Obama is hiking taxes to unbearable levels.