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Schakowsky proposes billionaire tax bill

U.S. Rep. Jan Schakowsky of Evanston is introducing legislation to raise income tax rates on people earning a million dollars or more a year.

Updated 11:50 a.m.: Schakowsky, at a Washington news conference this morning, joined several other Democrats in calling for the new tax brackets for high earners.

In a news release she quoted an NBC/Wall Street Journal poll earlier this month that reported the most popular way to reduce the deficit according to 81 percent of Americans is to put a surtax on federal income taxes for those who make more than $1 million per year.

The current tax code taxes someone who makes $373,000 a year at the same 35 percent rate as someone who makes over $1 billion, Schakowsky says.

The bill would create new brackets for high earners:

  • $1 million to $10 million: 45 percent.
  • $10 million to $20 million: 46 percent.
  • $20 million to $100 million: 47 percent.
  • $100 million to $1 billion: 48 percent.
  • $1 billion and over: 49 percent.

Schakowsky says income inequality in America is the worst we’ve seen it since 1928. Wages have stagnated for middle and lower income families despite enormous gains in productivity.

“In the United States today, the richest 1% owns 34 % of our nation’s wealth – that’s more than the entire bottom 90%, who own just 29% of the country’s wealth,” she added.

“And the top one-hundredth of 1 percent now makes an average of $27 million per household per year."

Chart showing changes in household income distributed at the Washington news conference.

"It’s time for millionaires and billionaires to pay their fair share, which is why I introduced the Fairness in Taxation Act. This isn’t about punishment or revenge. It’s about fairness. It’s about avoiding budget cuts that harm middle class families and those who aspire to it. We can choose to cut education, job creation and health care, or we can choose to ask those who can contribute more to do so,” Schakowsky said.

The bill would also tax capital gains and dividend income as ordinary income for those taxpayers with income over $1 million.  If enacted in 2011, the Fairness in Taxation Act would raise more than $78 billion.

Several other Democrats in Congress joined Schakowsky at the news conference announcing the bill, along with one millionaire.

“I think very wealthy people like me should pay substantially higher taxes, since we have done exceedingly well in the last few decades,” said Katharine Myers, a millionaire from Pennsylvania whose income comes from royalties from the Myers-Briggs personality test, created by her mother-in-law, which she has managed with Peter Myers since the 1980s.

“Our taxpayer-funded government contributed to my success,” Myers said.

Myers has been a supporter of United for a Fair Economy and its Responsible Wealth project for many years.

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