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ThePlumLIneGS whorunsgov plumline
Posted at 02:17 PM ET, 10/24/2011

How Obama’s jobs policies would really impact the rich (hint: not much)

Any senators — Democrat or Republican — who vote against the individual pieces of Obama’s jobs bill on the grounds that they impose a new surtax on millionaires are protecting the extremely narrow interests of an extremely tiny minority of their own constituents.

I’ve got some new numbers for you that illustrate this in fresh detail: They reveal that the surtaxes would be paid by an infinitessimally small percentage of American taxpayers, and that the surtaxes themselves would constitute an infinitessimally tiny percentage of the income of the wealthy.

Senate Dems have announced that they will continue to force Republicans to vote on jobs policies funded by such surtaxes, and next week, the Senate will vote on another key piece of Obama’s jobs bill: The Rebuild America Jobs Act. The plan would create a national infrastructure bank and would invest $50 billion in upgrading highways, rail, and bridges, with the goal of putting construction workers across the country back on the job and revitalizing our infrastructure and economy. It would be paid for by a 0.7 percent surtax on income in excess of $1 million.

Similarly, the proposal that was voted down in the Senate last week — which provided Federal aid to states to protect teacher and first-responder jobs — would have been paid for by an even smaller surtax of 0.5 percent.

Senate Republicans — and a few Dems — have been opposing these surtaxes, arguing they raise taxes on small businesses and job creators, which would impede the recovery. So let’s be as clear as possible about what we’re actually talking about here.

I asked the Citizens for Tax Justice to analyze this surtax proposal — how many taxpayers it would impact nationwide; how much they would have to pay on average in additional taxes; and what percentage of their income that would represent. CTJ graciously agreed, and calculated the numbers using their microsimulation tax model, which is described here. Here are CTJ’s totals, which would take effect in 2013:

* If the new infrastructure proposal were enacted, the surtax on millionaires would impact a grand total of 345,532 taxpayers nationwide — or 0.2 percent of American taxpayers.

* If the new infrastructure proposal were enacted, the 0.7 percent surtax would amount to all of $13,457 on average for the millionaires that would pay it. Given that their average income is $2,923,000, this means they would be paying on average an additional 1/217 of their overall income, or just over an additional 0.4 percent. That’s less than one half of one percent.

This number, obviously, would have been even smaller if the state aid package — with an even smaller millionaire surtax — had passed.

* In a large majority of states, fewer than 5,000 taxpayers in each state would feel these surtaxes. In around half the states, fewer than 3,000 in each would be impacted. In most states, 0.2 percent or fewer of taxpayers would pay the surtax.

You can view a state by state breakdown of the data right here, so you can fully appreciate how small a percentage of each senator’s constituents would actually pay more in taxes under these proposals. (The column detailing the average tax hike that would result was calculated using the original American Jobs Act’s provision of a 5.6 percent millionaire surtax; to get the smaller surtax that would be paid for each individual provision now getting voted on, simply divide. The percentage of taxpayers who would pay this doesn’t change)

Senate Dems are vowing to continue forcing votes on jobs policies that would be funded by surtaxes on millionaires. So let’s be clear on just how tiny a percentage of income these taxpayers are actually being asked to shell out, and on how tiny a percentage of Americans are being protected by Republicans (and Dems) who are voting against these policies.

By  |  02:17 PM ET, 10/24/2011

 
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