This calculation is amazing.
If someone makes 5 times as much income as someone else, should they
pay 5 times more in taxes? That surely meets Clinton's definition of
fairness. Higher income individuals make more and they would then pay
much more in taxes (indeed, 5 times more). It is doubtful that the
higher income individual gets 5 times the benefits, but his higher
taxes make it possible to provide government benefits to lower income
The wealthy would pay much more in taxes if everyone paid the exact
same percentage of their income in taxes. You don't need higher tax
rates on those who earn more money. Even marginal tax rates that
declined with income would still ensure that higher-income individuals
paid more taxes.
Possibly Democrats are relying on people not realizing how quickly
Federal income taxes rise with income. Suppose that you have two
married couples with two children and no other deductions. The only
difference between these two couples is that one makes $60,000 per
year and the other makes five times more, $300,000. The $60,000-a-year
couple would face a federal income tax bill of $1,466 this next year
if the tax rates remain unchanged (the calculations using TurboTax are
available here). The $300,000 a year couple faces a tax bill of
$71,134. That isn't five times more in taxes to match their 5 times
greater income. It isn't 10 or even 20 times more in taxes. It is 49
times more in taxes.
If you think that this is unusual, try adding on education and
childcare expenses or other credits and deductions that are only
available to lower income individuals. The Alternative Minimum Tax
also makes if much harder for higher income individuals to benefit
from taking deductions.
Why should a couple that makes 5 times more money pay 49 times
more in federal income taxes?
That really is not the way things should be taxed.