Quote from fframe38:
Um, no.....not a good idea. This always seems like a great plan until you realize what the definition of "well-to-do" and "middle class" becomes after you implement it.
Most people in their minds think "well-to-do" is somebody making >= $500,000 a year, and middle class extends from say $50,000 up to maybe $250,000/year. Unfortunately, according to government statistics the "middle class" only goes up to about $80,000/year maximum. Plus, most well-to-do people are not making massive money via W-2, but instead through some kind of corporate structure which is taxed differently and offers many loopholes to avoid any massive tax increases.
So, if you try to "soak the rich" or tax all of these rich people by raising the top rate to 38%, what really happens is that most of them create some sort of tax shelter or are unaffected due to being tax-sheltered already. Then, the supposed revenue increase is not large enough, so you have to keep lowering down the income where the top bracket applies until eventually you are taxing the very people that can afford it least, those who are earning money through jobs (W-2) and living paycheck-to-paycheck.
Consider that anyone living in a major metro area such as New York, Boston, Chicago, Miami, Los Angeles, etc. and wants to live in a half-decent house and/or send any kids to college is going to be negatively affected by this kind of plan in a major way. After all, $200,000/year in New York or Chicago is more like about $60,000/year in rural Iowa somewhere considering what it takes to maintain a decent lifestyle. Experiencing a 50% increase in taxes is not likely to create good results for these people.
