Reply #25

"According to the President" the deficit would already be cut in half, so while we can support his goal of a fairer tax system, we really should question his math a bit.

How about according to IRS data of actual tax returns? The most recent tax year with detailed information available was 2009.
Source: http://www.irs.gov/uac/SOI-Tax-Stats---Individual-Statistical-Tables-by-Size-of-Adjusted-Gross-Income

The IRS data does not break out returns above $250K, so let's take returns with taxable income above $200K.

> Number of returns in that category in 2009: 723,191
> Total taxable income from those returns: $903.1 billion
> The portion from returns in excess of $250K: $722.3 billion
> Of that, the portion not from capital gains: about $500 billion

So you are increasing the tax rate on $500 billion in income. Today the rate is 33% on taxable income over $178,650 to $388,350, and 35% on taxable income over $388,350. Let's just say on average we collected 34% on all of those dollars today.

That means we already collected $170 billion on that income today. Now raise the rate on those dollars to 39%, and we would have collected $195 billion in taxes, for a net gain from that tax increase of $25 billion annually. At a 39% tax rate on incomes above $200K you'll get your $700 billion in 28 years.