Monday, February 08, 2010

I Don't Care What Your Tax Rate Is, a Million Dollars Is a Lot of Money

Last week, during a joint appearance with Harold Ford, Jr. at the University of Arkansas at Little Rock, Republican National Committee chairman Michael Steele said, "Trust me, after taxes, a million dollars is not a lot of money." No, it is.

The median (pre-tax) household income in the United States in 2008 was just over $50,000; the median personal income is closer to $40,000. If a person earning a million dollars had to pay 90 percent of his or her income in taxes, he or she still would have more than twice as much money after taxes than the median wage earner would have before taxes. According to Global Rich List a person earning $125,000 is in the top one-half of on percent of wage earners worldwide. Were a person making a million dollars to pay 85 percent of his or her income in taxes, he or she would still take home more money (after taxes) than 99.5 percent of the world's population (before taxes). Currently, those in the highest income bracket pay 35 percent of their income for federal income taxes.

And, as Gawker pointed out, Steele made these comments in a state where the median household income is less than $40,000 to college students facing a depressed job market.

I'm not saying that one can't make a convincing economic argument for cutting taxes on the uber-wealthy. But until the tax rate on millionaires breaks 90 percent, don't tell me that people with million-dollar salaries aren't making a lot of money.


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