Drastic Tax Changes Only Way to Save Middle Class
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Tax reform proposals that raise the top bracket from 35% to 39% will do virtually nothing to revive the American middle class. Instead of dawdling over incremental changes in the existing tax code, we should be doing something quite different.
Instead of increasing top tax rates from 35% to 39%, we should return to the pre-Reagan tax rates that went up to 90% on the highest earners. One would then get tax breaks only for investments that clearly increase the likelihood of middle-class development here in the United States. Tax breaks could be retained for such things as child care, education, charitable giving, out-of-pocket health-care expenses and a limited mortgage-interest deduction for one home.
All of these help sustain the middle class and assist those in lower income brackets to work their way toward middle-class status.
Tax breaks for capital gains income, on the other hand, would change considerably. They would apply only for investment in companies that provide American citizens with the kind of middle-class wages, benefits and opportunities discussed above. All other income would be taxed at a steeply progressive rate that could rise as high as 90%. This would encourage wealthier Americans to invest in ways that help America as a whole. The alternative for them would be having much of their income taxed away so that government could then provide the assistance. ...
http://www.marketwatch.com/story/drastic-tax-changes-only-way-to-save-middle-class-2013-01-14
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