The New York Times recently asked the question what would happen if we taxed the top one percent just a little more? Using data and statistical evaluation from the Tax Policy Center and Urban Institute and the Brookings Institution, they were able to pinpoint that the top one percent is comprised of 1.13 million households who earn an average income of $2.1 million.
So, if Congress were to raise their taxes from the 39.6% it’s currently at to 40 percent, that would generate roughly $157 billion in revenue. If Congress went a step further, that number would almost double to $267 billion in new revenue for the federal government.
Upon further investigation, the Times found that if we stuck to raising taxes on the top 0.01 percent of Americans (roughly 115,000 households whose households average $9.4 million a year) at a rate of 40 percent, the U.S. would receive $55 billion in new revenue in just one year. If you raised it to 45 percent, the revenue would double to $109 billion.
According to the Congressional Budget Office, if Congress got rid of the adjustment that allows capital gains to be taxed at a much lower rate and adjusted it to regular income, that would generate over $644 billion in new revenue in the next 10 years. If we completely eliminated the preferential rates on capital and dividends, that would generate $1.34 trillion over the next 10 years.
So what could this pay for?
Well, for starters, it would allow the U.S. to eliminate undergraduate tuition rates in all the nation’s four-year public colleges and universities, which would cost $47 billion.
If we raised taxes to those in the 95th to 99th percentile to the same degree, the U.S. would generate $86 billion, enough to cover the cost of the Cadillac tax in healthcare plans over eight years.
If you raised it just five more percent for the 95th-99th percentile, the U.S. would take in $176 billion, enough to cover the costs of our crumbling highway infrastructure system (which would create jobs).
There are some reports that show if we raised taxes on the top 1 percent, we could virtually wipe out our $426 billion deficit, because the new revenue would help curtail government borrowing.
So basically, if we raised taxes on the top one percent, if just by nine percent, we could drastically change America for the better.
It looks like Hillary Clinton and Bernie Sanders’ plans could actually come to fruition if 2016 works out in the favor of the Democrats.
Featured image via Flickr