It’s time for the Wall Street Journal to publish its episodic “people who make a half a million dollars a year aren’t really well off financially at all, are you insane?” op-ed, which it trots out every time the possibility that tax rates might be raised slightly on the top 1% of the population. Behold:
If Americans are successful, Democrats want to tax more of their income. The top individual tax rate will rise to 39.6% from 37%, as Mr. Biden promised. But wait: The higher tax rate will kick in at a mere $400,000 for individuals and $450,000 for married couples. That’s down from $523,600 and $628,300 under current law.
The 99th percentile of individual income is currently in $361,020. The 98th percentile of household income is the $387,116 and the 99th is $531,020, so there actually will be that one couple at 88th and Lex (their children are named Paxton and Zooey) that’s not technically in the 99th percentile of household income but will still be forced to pay about $700 more in taxes than they do now, if Socialism in America is enacted via this proposed legislation. There goes the nanny’s Christmas bonus, you monsters.
Moving right along:
This is a steep rate increase on two-earner upper-middle-class families. They may reach these income levels after a long career, and only for a couple of years, but Democrats want more than 40% if you include the 1.45% Medicare payroll tax and the 3.8% ObamaCare surcharge on investment income.
If you make more than $5 million, there will also be a three-percentage-point income-tax surcharge. That would take the top tax rate to something like 46.4%. Add California or New York taxes, and government will take about 60%
Notice the classic Right Wing Liar (but I repeat myself) trick of treating marginal tax rates as if they were effective tax rates. I constantly run into highly educated — or “educated” — people who don’t understand this distinction, mostly because they don’t want to understand it, and it is difficult to get a man to understand something . . . you know the rest.
Oh yeah, don’t forget that pesky estate tax:
The death tax exemption would also be cut in half to $5.5 million—which would also hit small businesses and savers who have built up a small nest egg.
I hope you’ve seen Lost in America and you haven’t please remedy that, so you can forever hear the phrase nest egg in Albert Brook’s voice when he says “the core of the nest egg,” after Julie Hagerty blows all their money at the roulette table (spoiler).
BTW the way the estate tax works is that you get the full benefit of your spouse’s exemption if you outlive him or her, so that proposed $5.5 million exemption means that married couples would still get to pass on their “first” $11 million tax-free to what during the first Gilded Age was referred to as the objects of their bounty.
Oh we dreamed of having a small nest egg. We lived at the bottom of a lake.
But you try to tell the young people that today, and they won’t believe you.