What makes more sense, a minimum income tax or a maximum income?


How much would Scott’s proposal cost Americans who currently pay no federal income tax? Scott’s plan — who chairs the Republican National Senate Committee, the deep-pocketed group coordinating the push for a GOP majority in the Senate — offers no specifics.

Tax policy groups have filled the void. Passing Scott’s plan, the Institute for Taxation and Economic Policy calculates, “would raise taxes by more than $1,000 on average for the bottom 40 percent of Americans.” In Mississippi, about 50% of households in the state would face tax increases.

The Institute assumes that Scott’s plan would levy at least $1 in federal income tax from every American. How could a minimum federal income tax of $1 make some Americans more than $1,000 poorer? Under Scott’s “minimum tax” approach, poor families would lose the benefit of the various existing “tax credits” intended to benefit all eligible Americans.

An example: in 2020, all Americans with children could claim a tax credit of $2,000 for each child under 17. Families whose total credit is greater than the tax payable could receive a refund of the excess credit up to $1,400 per child.

In other words, a single mother with a single child who owed $600 in taxes would receive, as part of the federal child tax credit, a check for $1,400 from the IRS. This single mother, under Scott’s federal minimum income tax, would lose that $1,400 benefit. Scott’s plan, in essence, would leave families earning $400,000 a year with a full benefit of $2,000 for each child and leave low-income families with only a fraction of that total benefit at best.

Overall, according to Howard Gleckman of the Tax Policy Center, Scott’s plan for “Rescue America” ​​would raise more than $100 billion in new taxes, with more than 80% coming from households earning around $54,000 or less. The Center assumes that every household nationwide should pay at least $100 in federal income tax under the Scott Plan.

“Low-income families with children would pay the most,” notes the Tax Policy Center analysis, “Achieving Scott’s goal would reduce their after-tax incomes by more than $5,000, or more than 20 percent.”

Meanwhile, points out an analysis by Patriotic Millionaires, those “ultra-wealthy Americans who avoid federal income tax through a series of loopholes that allow them to claim little or no income” would continue to face only ‘to a tiny tax on their mega millions under Scott’s “11 points”.

“Ultimately,” the Patriotic Millionaires summed up, Scott’s plan comes down to “a wink and a nod to his wealthy donors to keep them flying.”

The roughly 750 billionaires who called the United States home last year added $1 trillion to their combined fortunes, according to an Americans for Tax Fairness review. Forbes data revealed earlier this year. The co-founders of private equity giant KKR, Henry Kravis and George Roberts, each raised more than $100 million in dividends and deferred interest income last year.

These sorts of races have given America’s wealthiest—masters of the universe like Rick Scott and his well-endowed cronies—the political power to tilt the country’s tax system in a surprisingly big-fortune-friendly direction. They have left us with a society that never seems to be able to afford the services and support that families of modest means once thought they could count on.

We must bring power back to the people. Enough with Rick Scott and his minimum income tax. We need maximum income.

Sam Pizzigati co-edits Inequality.org. His latest books include The case of a maximum wage and The Rich Don’t Always Win: The Forgotten Triumph Over Plutocracy That Created America’s Middle Class, 1900-1970. Twitter: @Too_Much_Online.

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