Tax rates are finally on the rise for the top 1 percent, CBO says

[n2doc]

The rich are still getting richer, and income inequality is still on the rise. But President Obama appears to have achieved at least one of his goals for the nation's pocketbook: The very richest Americans are finally shelling out a bit more in federal taxes.

According to a new report from the nonpartisan Congressional Budget Office, the top 1 percent of earners paid an average tax rate of about 33 percent last year -- up sharply from an average of 29 percent in 2011.

The report documents a turning point in federal tax policy -- and not just for wealthy Americans. After falling steadily since the late 1990s, federal tax rates are on the rise for people at all income levels, due primarily to changes in tax law made during the 2012 showdown over the so-called "fiscal cliff."

That deal cancelled much of the massive tax increase that would have occurred had tax cuts enacted under former president George W. Bush been allowed to expire in their entirety. But some taxes went up nonetheless. In the biggest change, the wealthiest households saw the top two rates on income rise from 33 percent and 35 percent to 36 percent and 39.6 percent. Households further down the income spectrum lost an array of smaller tax breaks. Even the very poorest households saw taxes go up: They lost a temporary reduction in the payroll tax enacted at Obama's request in 2010.

more

http://www.washingtonpost.com/blogs/wonkblog/wp/2014/11/12/tax-rates-are-finally-on-the-rise-for-the-top-1-percent-cbo-says/

[onehandle]

1. Uh... Not impressed until we return to 1950s tax rates.

'The good old days of growth and prosperity' can be ours.

[n2doc]

2. Then you will be waiting a long time n/t

[bhikkhu]

4. If we don't appreciate, support and pubilcize the first step in the right direction

then we probably won't get a second step.

[pampango]

3. My guess is that McCain and Romney would have prevented that from happening.

It will take a long time to get back to acceptable levels of taxes on the rich. Some progress in that direction is very welcome.

[JHB]

5. What's the breakout between different levels of the 1%?

In other words, looking at the 0.01% and 0.1% separately from the rest of the 1%.

Orthodontists and a guy who owns a chain of car dealerships can be in the 1%, but they're rarely in the same boat as hedge fund managers and corporate CEOs. And it's the higher end of the 1% that gets the most advantage from legalized tax dodges.

Lumping them together can be misleading.