(Yahoo!Finance) - Democrats are in the middle of a major effort to raise taxes on the wealthiest Americans to help offset the cost of their proposed expansion of the social safety net.
“How is it possible for millionaires and billionaires that can pay a lower rate of tax than teachers, firefighters, or law enforcement officers?” President Joe Biden asked during remarks on the economy delivered at the White House last week. “Big corporations and the super wealthy have to start paying their fair share of taxes. It’s long overdue,” he added.
Biden wants to beef up the IRS to collect more of the taxes that some high-income households currently evade. Additionally, House Democrats have released their tax plan that includes raising the top income tax rate to 39.6%, applying a new 3% surtax to incomes over $5 million and raising the capital gains tax rate to 25%, among numerous other changes to the tax code that would hit some of the country’s wealthiest households.
In light of Democrats’ effort to raise taxes on the wealthy, CNN’s Tami Luhby took a look at some key characteristics of today’s top 1% in income, including these three numbers:
* $540,000: That’s how much income it took to claim a spot among the top 1% in income in 2018, according to the IRS. (We should note that the top 1% in wealth is a different -- and arguably more important -- measure.)
* 21%: The top 1% of earners claimed about 21% of all total adjusted gross income in 2018, with most of that income coming from capital gains and dividends, not labor. By comparison, the bottom 50% of taxpayers claimed about 11.6% of all total adjusted gross income.
* $615 billion: The top 1% paid about $615 billion in federal income taxes in 2018, which accounted for about 40% of all federal income taxes paid. The bottom half of the income distribution paid about 3% of federal income taxes that year.
By Michael Rainey
