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Author: FoolinGrapeApe Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 1947898  
Subject: Income redistribution Date: 11/17/2012 8:13 AM
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I can't see this ever happening, but if it does I'll be sure to max out our 401K contributions ASAP. I should probably do that anyway.


So here’s the deal the White House should offer Boehner to help avoid the fiscal cliff.

(1) President Obama and the Congress should agree to temporarily raise the maximum marginal tax rate for those in the top 5 percent of all earners from 35 percent to 50 percent. This would be equal to the maximum rate in 1985 when Ronald Reagan was in the White House.

(2) Half of all the additional revenue garnered from this increase in the top tax bracket should be set aside to reduce the size of the federal deficit.

(3) The other half should be transferred as immediate tax rebates to households in the bottom three income quintiles. Nearly 93 percent of these dollars will go into the spending stream.

(4) This increase in the maximum tax rate on the richest families in the nation and the tax rebates for most others should remain in effect until the unemployment rate falls below 6 percent. Cutting the higher marginal tax rates on the wealthy when the economy is booming again will shift incomes to high savers who will help spur investment when new production capacity will be needed.

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