Wednesday, February 13, 2013
House Ways & Means Committee press release, Tax Revenues to More Than Double by 2023, While Top Tax Rates Hit Highest Level Since 1986:
On January 1, 2013, taxes went up by $4.2 trillion, as Clinton-era policies snapped back into place. On January 2, however, Congress cut taxes by $3.6 trillion, permanently cementing into law the vast majority of the temporary tax cuts first enacted in 2001 and 2003. So, where does this leave American tax policy? Answer: still in need of reform.
Last week, the Congressional Budget Office (CBO) released a report that shows that the Federal Government will collect more than twice the amount of taxes it did last year by the year 2023 – proving the government has all the revenue it needs.
Tax Receipts (CBO)
2012 (actual) 2023 (projected) $2.4 trillion $5.0 trillion
At the same time, the tax code remains riddled with complexity, and real tax rates are higher than they have been in more than a quarter century – when Congress last reformed the tax code. According to an analysis (see below) from Ways and Means Chairman Dave Camp (R-MI), tax rates are now as high as 44 percent on wages and salaries. When capital gains and dividends are taxed twice (once at the corporate level and then again at the individual level) the level of taxation now reaches 55.0 percent (it is a top rate of 30.8 percent if only taxed on the individual level). Small businesses, meanwhile, face rates up to 40.8 percent. These excessively high tax rates are the result of President Obama and Congressional Democrats’ insistence on maintaining certain Clinton-era tax rates plus ObamaCare taxes.Top Real Tax Rates
Taxes on… Top Real Tax Rate Small Business Income 40.8 percent Workers’ Wages and Salaries 44.0 percent Rent, Royalties, and Interest 44.6 percent Capital Gains and Dividends