To help solve the US Fiscal Cliff, my recommendation here is
to assess a US Federal Income Tax on individuals on all previously Tax-Exempt
State and Municipal Interest Income,
starting in 2013, as follows:
·
For all US
individual taxpayers with Adjusted Gross Income of at least $250,000, but less
than $500,000, 10% of their State and Municipal Interest Income is taxed.
·
For all US
individual taxpayers with Adjusted Gross Income of at least $500,000, but less
than $750,000, 20% of their State and Municipal Interest Income is taxed.
·
For all US
individual taxpayers with Adjusted Gross Income of at least $750,000, but less
than $1 million, 30% of their State and Municipal Interest Income is taxed.
·
For all individual US
taxpayers with Adjusted Gross Income of at least $1 million, but less than $5
mil, 40% of their State and Municipal Interest Income is taxed.
·
For all individual US
taxpayers with Adjusted Gross Income of at least $5 million, but less than $20
mil, 50% of their State and Municipal Interest Income is taxed.
·
And for all individual US
taxpayers with Adjusted Gross Income of $20 mil or more, 60% of their State and
Municipal Interest Income is taxed.
But to be fair, it only makes sense to also assess a US
Federal Income Tax on a portion of the previously Tax-Exempt
State and Municipal Interest Income
of all taxable corporations, starting in 2013, as follows:
·
Taxable Income of at least $100 mil, but less
than $200 mil, 10% of State and Municipal Interest is taxed.
·
Taxable Income of at least $200 mil, but less
than $500 mil, 20% of State and Municipal Interest is taxed.
·
Taxable Income of at least $500 mil, but less
than $1 bil, 30% of State and Municipal Interest is taxed.
·
Taxable Income of at least $1 bil, but less than
$5 bil, 40% of State and Municipal Interest is taxed.
·
Taxable Income of at least $5 bil, but less than
$20 bil, 50% of State and Municipal Interest is taxed.
·
Taxable Income of $20 bil or more, 60% of State
and Municipal Interest is taxed.
It is much more equitable to at least somewhat close this
tax-exempt interest tax loophole that benefits the very wealthy than for middle
income and lower income taxpayers to get significant cuts in their Medicare and
Medicaid benefits, for unemployment compensation benefits to not be extended, or
for federal programs like food stamps and Pell Grants to be cut.
All of the money raised by the US Government here should be
used to reduce the US Debt.
