Small business tax hike. President Obama is calling on higher-income households to pay their “fair share.” The first point is that the majority of all small business profits face taxation in households making more than $200,000 per year. To raise taxes on these households is to also raise taxes on jobs-creating small businesses
The income tax is already steeply-progressive. Most income taxes are already paid by households at the top of the income scale (Source = IRS):
|Earnings||Min. Income Threshold||% All Income Taxes Paid|
While the top 1% of income earners pay 40% of all income taxes, the lower half of income earners pay almost nothing. For all intents and purposes, there is no income tax burden on the lower half of income earners.
The income tax has gotten more progressive over time, not less. According to the IRS, the income tax has gotten more progressive over time:
|Top 1%||26% of all income taxes||40% of all income taxes|
|Lower Half||6% of all income taxes||3% of all income taxes|
Even when payroll taxes and other taxes are included, the tax code is extremely-progressive already (Source = CBO):
|Average Earnings||% of All Taxes Paid|
|Top 1%||$1.87 million||28% of all taxes paid|
|Lowest 20%||$18,400||<1% of all taxes paid|
What do you think? Is the tax code progressive enough today, or do we need to raise taxes?