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Taxing the Wealthiest Could Go a Long Way
Published: December 05, 2012Availability:
In a contribution to The New York Times' Room for Debate, Bill Gale responds to the question: can policy makers make a dent in the deficit without affecting the majority of taxpayers?
The New York Times' Room for Debate
But increased tax revenue from high-income households alone could go a long way toward stabilizing the medium-term debt relative to the economy — a policy that could be achieved with about $2 trillion in deficit reduction over the next decade.
The administration has already proposed $1.6 trillion in tax increases on high-income households. The top two rates would return to Clinton-era levels, 36 and 39.6 percent. Tax benefits would be capped at 28 percent per dollar of itemized deductions, health insurance premiums, retirement contributions and tax exempt interest. These changes would have no effect on anyone currently in the 28 percent bracket or below, about 98 percent of households.