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)
| $2.4 trillion
|| $5.0 trillion
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
| 55.0 percent