Tuesday, July 26, 2011
One way to help solve the federal deficit problem is to turn back the clock on tax rates for corporations and the wealthy, which could yield three quarters of a trillion dollars more for the U.S. Treasury annually.
Researchers at the Institute for Policy Studies (IPS) concluded that if corporations and households earning $1 million or more in income each year paid taxes at the 1961 rate imposed by the IRS, the government would have an additional $716 billion a year to spend.
In 1961, the average American household earning more than $1 million a year (adjusted for 2011 dollars) paid 43.1% of their reported income in taxes. By 2011, that figure will have dropped to 23.1%. If these wealthiest Americans went back to paying at the 1961 rate, the U.S. government would raise an extra $231 billion in revenue.
As for corporations, in 1961 they paid an average of 47.4% of their profits in taxes. This year that percentage will drop to 11.1. If the corporate tax rate reverted to the 1961 level, the United States would gain an extra $485 billion in tax revenues.
-David Wallechinsky, Noel Brinkerhoff
Plutocracy and the Debt Ceiling Debate (by Sam Pizzigati, Campaign for America’s Future)
Unnecessary Austerity, Unnecessary Shutdown (by Chuck Collins, Alison Goldberg, Scott Klinger and Sam Pizzigati, Institute for Policy Studies) (pdf)
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