So here it is in one graphic:
Basically, the bottom 20 percent would see their after-tax incomes grow by around 1.2 percent, while people in the top 20 percent would receive -0.7 percent less.
But by dollar amounts, the differences between the bottom and the top are much bigger. The bottom 20 percent would receive $175 more per year on average, while the top 20 percent would lose out on $1,800 per year. Things get steeper among higher-income Americans — the top 1 percent would get $29,000 less in after-tax income than they do now, and the top 0.1 percent would get $168,000 less. In the very middle 20 percent, meanwhile, there would be virtually no change — an increase of $7 on average.
Now, get prepared from some complaining about “unfairness”.
And then ask yourself one question: Who would you rather be — a person who makes $15,000 a year suddenly making $15,175 per year, or a person make $10,000,000 a year making only $9,832,000? Me? I would rather be the second guy.
But that’s not the REAL question, is it. The real question is — given that capitalism necessarily has winners and losers (after all, if we’re ALL millionaires, who is going to do the crap jobs), then who within our capitalist system has benefited most from it and should therefore pick up the tab for the government services that protect and provide for us all?
Yup, the second guy.
The one who is probably going to whine about socialism.
P.S.: Maybe this goes without saying, but this proposal will never pass. The tax proposal is mostly important for two reasons at this point. One is as a piece of the White House budget, which will be released next week (and the center will revise its figures once the budget is out). This tax reform proposal, together with all of the administration’s other spending proposals, will give a sense of the administration’s proposed priorities for the federal government.
But the tax reform proposal, like the president’s budget (which itself will never pass Congress, either), is also a political statement. The tax reform proposal is a way for Obama to emphasize what he believes is wrong in the US economy — that is, that work just isn’t paying the way that it used to. Wages are stagnant, but workers are seeing so many incomes at the top pull away from the bottom 99 percent, thanks in part to income from capital gains (that is, income that doesn’t come from a paycheck).