Zinnia Financial Discusses Higher U.S. Tax For Millionaires?

Online, March 29, 2011 (Newswire.com) - U.S. millionaires are to be taxed more heavily, if certain members of U.S. congress are supported. Anyone earning more than $1m annually would be faced with a rather sizeable 45% tax bill. That's a lot less money for Bill Gates to give away to charity each year.

As it currently stands, any Americans earning over €420,000 are taxed 35% of their earnings. The Fairness in Taxation Act, introduced by Jan Schakowsky, is not intended to penalise the rich for being successful, but rather as a means for the U.S. to increase revenue and plug the deficit. Supporters argue the bill will level the rich-poor divide, which is the widest it has been since 1928, whilst minimizing budget cuts. It has certainly proven very popular with the everyday American, possibly because the wages of low-mid income families are at a stand-still.

The Sun-Times has reported Schakowsky as saying, 'In the United States today, the richest 1% owns 34% of our nation's wealth - that's more than the entire bottom 90%, who own just 29% of the country's wealth... And the top one-hundredth of 1% now makes an average of $27 million per household per year. The average income for the bottom 90% of Americans? $31,244. It's time for millionaires and billionaires to pay their fair share.'

The Fairness in Taxation Act would bring about five new tax brackets in order to provide definition between the well off, the rich, and the disgustingly rich. Those earning $1-10m would be taxed 45% of their earnings, $10-20m 46%, $20-100m 47%, $100m-1bn 48% and those who are lucky enough to earn over $1bn will be taxed 49%. This form of taxation is said to allow the avoidance of budget cuts that will prove detrimental to those in need, whilst not affecting the wealthy.

Schakowsky however, isn't fully supported. The bill is unlikely to receive the backing of the anti-tax Republicans and has even been directly opposed by a New York governor, who is in favour of letting the highest existing tax rate lapse.

Higher taxation of the wealthy is a fight that has been undertaken, and failed, several times in recent years. Millionaires make up a very small percentage of the population and Schakowsky has come under heavy criticism for thinking too narrowly, discounting the majority of the population. It has been argued that a higher taxation of the rich won't achieve the $78bn Schakowsky is predicting. People alter their behaviour and business structure in the wake of higher taxation in order to minimize costs. When you also consider that Congress extended the tax cuts for all Americans, it seems unlikely the bill will ever come to fruition.