President Barack Obama’s tax proposals would raise the bill for Americans with income of more than $1 million by $93,700 on average, according to a study by Congress’ non-partisan Joint Committee on Taxation.
Tax rates are scheduled to revert back to their 2001 levels, erasing the Bush tax cuts, unless Congress acts. President Obama has proposed leaving the cuts in place for people with income of less than $200,000 and letting rates go back up for everyone else.
Even with the Obama increase, the wealthy would be paying less than in 2000, because the lower part of their income would still be taxed at rates implemented by the Bush cuts.
Under Obama’s plan taxpayers with more than $1 million in income would on average pay $6,300 less than they would have under the pre-Bush rates.
But if all the tax cuts stayed in place, they’d pay $100,000 less, The New York Times reports.
Obama’s plan would amount to a $38 billion tax increase, the study says.
Taxpayers with income between $200,000 and $500,000 would pay $1.9 billion of that, while those between $500,000 and $1 million would pay $6 billion, and those earning more than $1 million would pay $30 billion.
So the wealthiest get socked hardest.
For those below $500,000, the tax increase is “relatively low,” Roberton Williams, an economist with the Urban Institute, told Bloomberg. “It’s less than 1 percent.”
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