I know I linked to Novick's post on Wyden's tax plan yesterday, but this graf is so important I want to highlight it here:
Right now, a teacher and truck driver making a combined $60,000 pay a
25% tax rate on their last dollar of income (that's not their overall
rate, but the marginal rate; if they get a $1,000 raise, they pay
$250.) But if Paris Hilton or Bill Frist buys and sells some
Halliburton stock for a $100,000 profit, they only pay 15%. And those
are not unfair examples. According to a New York Times article last
year, capital gains and dividends make up, on average, 3 to 4% of the
income of people who make less than $100,000 ... but 24.7% of the
income of those who make between $500,000 and $1 million, 37.6% of the
income of those making between $1 and $10 million, and 61.4%
of the income of those making over $10 million. As a result of
favorable tax treatment for these forms of income, as Pulitzer
prizewinning tax reporter David Cay Johnston has noted, the richest 400
Americans pay a lower Federal tax rate than the merely rich, people making, say, $300,000 a year.
Progressive describes a tax code favoring the poor, regressive a tax code benefitting the rich, but what's the term for a tax code that subsidizes the poor and helps out the rich but screws the working class?
