Nastiness Diagnosis. Anthropology. Religion. Gender. Justice. A Personal Notepad For the General Public.
– The tax reform passed after Kennedy’s death cut the top marginal tax rate from 90 percent to 70 percent, twice today’s top rate of 35 percent. Kennedy explicitly called for a top rate of 65 percent, but added that it should be set at 70 percent if certain deductions weren’t phased out at the top of the income scale.
– Kennedy called for U.S. corporations to be taxed on all their profits, earned anywhere in the world, rather than the current system of allowing them to defer taxation until they bring those profits home. "The undesirability of continuing deferral is underscored where deferral has served as a shelter for tax escape through the unjustifiable use of tax havens such as Switzerland," Kennedy said in 1961. During Kennedy’s time in office, corporate taxes made up more than 20 percent of total revenue. Today, it’s less than ten percent.
– Kennedy called for cutting tax preferences for the oil and gas industries, saying in 1963 that, "while these are complex as well as controversial problems, we cannot shrink from a frank appraisal of governmental policies and tax subsidies in this area." Republicans have been adamantly opposed to cutting subsidies for oil and gas companies.
– Kennedy called for limiting itemized deductions for the rich, saying that they should receive the same benefit for things like charitable giving "as everyone else," instead of preferential treatment (which they still receive). President Obama has called for the same system since he came into office, but the GOP has derided Obama’s proposals.
Obviously we’d do well in paying down the debt if we returned to Clinton-era or slightly higher tax rates. But for fun, let’s go back to 1961 tax rates.
All these taxpayers would pay a whopping $382 billion more in taxes this year if they had to pay at the 1961 effective tax rate, the rate the rich actually faced on their tax returns 50 years ago after taking advantage of every available loophole.
Why do we need more audits at the top? The most recent IRS Oversight Board report estimates we’re losing $290 billion a year to tax cheats — and high-income taxpayers, one 2008 study has concluded, underreport their incomes at triple the "misreport" rate of average-income taxpayers.
The bottom line: Taxing the rich at the actual rates they paid a half-century ago — and doing more to make sure all the rich pay their taxes — would likely this year raise, at the federal level alone, an additional half a trillion or so.