How low can they go? Taxes on the rich, that is. Last Tuesday saw the tenth anniversary of the first George W. Bush tax cut for the rich, and, to honor the occasion, former Minnesota governor Tim Pawlenty doubled down. Pawlenty, a leading “serious” candidate for the GOP 2012 Presidential nod, proposed a tax cut for the rich that makes George W. seem a Republican Robin Hood.
Pawlenty wants to eliminate federal taxes on all dividends, all interest income, all grand fortunes left to heirs, and all capital gains from wheeling and dealing on stocks and other assets. Pawlenty also wants to chop the tax rate on ordinary income over $375,000 from 35 percent, the current rate, to 25 percent.
In 2008, America’s 400 highest-income taxpayers — average income, $270.5 million — paid just 18.1 percent of their incomes in federal taxes. If Pawlenty’s tax cut went into effect, Citizens for Tax Justice calculated last week, the top 400 tax rate would plummet to an astoundingly miniscule 4.7 percent.
Pawlenty, says one reporter, is “essentially daring” his GOP rivals to try to out-cut him on the tax-cut front. Will they try? If they do, they’ll likely echo Pawlenty’s rationalization for rewarding the rich. This week, in Too Much, we apply that rationalization to some reality the rationalizers would rather we ignore. ...
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