The devil, if there is one, would be in the details. Over 120 covers a lot of ground. Certainly I don't want to see taxes raised on anybody making less than that. I'm above that magic line so I'd have to cough up a little more. I'm OK with it as long as we could reintroduce some progressiveness back into the income tax structure that was lost during the Reagan years when we bumped the lowest marginal rate a little (2 %, I think it was) and drastically lowered and compressed all the upper brackets to virtually eliminate progressiveness in the income tax structure. I have argued that this move is at the foundation of our growing wealth inequality. The effects have been only partially undone in subsequent administrations, and the harmful effects continue to compound over time. We created a tax structure that had the effect of slowly destroying the middle class and enriching the wealthy without fundamental justification in terms of productivity and societal contribution. It was done by removing progressiveness in the tax structure.
Somewhere there is a justifiable middle ground. We will find it if we go back to more brackets and gradually ramp up the marginal rates without becoming draconian. Somewhere near 40-5% would be a reasonable upper bound.
I think most of us don't properly view a progressive tax structure. We tend to summarize it as I have to pay 35% of the dollars I earn to the government, but Bill gets by with only having to pay 28%, or whatever. That's a very incorrect way of viewing a progressive tax structure. In reality, Joe and Bill pay identical rates on the same dollars earned when those dollars are stacked up side by side. It's just that Joe's pile is higher. Well, i'm Joe in this instance, and I don't mind paying more on the part of my stack that exceeds Bills. But we need more brackets!!! We now have too few. AND we need to keep the rate on the top most bracket down to something reasonable.
P.S. the reason that lowest bracket got bumped during Reagan's time is because Congress insisted that the Reagan tax overhaul be revenue neutral. There were so many folks in that lowest bracket that they only had to bump it a couple percent to make up for the huge tax cuts at the top end. The argument for cutting the top end drastically was put out to the public as "trickle down". If only we put more money in the hands of those at the top, it will benefit those at the bottom. The ones at the top were supposedly the ones creating most of the jobs! (The Kaufman Foundation later studied job creation. It turned out most new jobs are not created by the wealthy.) Also Reagan, who was an economics major at Whittier College --before he became a popular radio baseball announcer and a Hollywood B-film actor, tee-hee-- as President, bought into Art Laffer's blind guess, or was it Cheney, Rumfeld or Winniski's guess -- no one wants to take credit-- as to where we were on the curve. Reagan was convinced that not only would his tax cuts be revenue neutral, but they could very well increase revenues. He said later that the cuts not panning out as he had hoped, and the subsequent, huge deficits, were "the greatest disappointment" of his presidency. (Laffer later said he didn't recall that chicken salad lunch during the Ford administration with Rumsfeld, Cheney, and Wanniski. Laffer and Cheney were classmates at some point, and I suppose that is how they came to know one another.)
