People get hysterical when talking about tax increases. They say wealthy people will pack up and leave (parking their yachts in the Nevada desert?) They say companies will relocate.
For perspective, if there is a 2% tax increase on incomes over $500,000 a person with $600,000 taxable income will pay $38.42 more in taxes per week.
If you think people who make $600,000 a year can’t afford $38.42 per week, and will leave behind their beautiful house and connections and friends, I suggest you should think again.
Notes: Taxable income is income after all deductions. Tax rates only apply to the income in that bracket, so a person with $600,000 in taxable income will pay the increased taxes on $100,000 if the taxes apply at $500,000. This means a 2% tax increase applies to that $100,000 only, which is $2,000 per year, or $38.42 per week.
Update – It has been pointed out to me that amounts paid in state taxes are deductible from federal taxes, so about $13-14 of this state tax would then taken off of taxes owed to the feds, so the net weekly increase paid by the super-rich in this example would be about $25, instead of $38.42.
Question for our conservative commenters: now that it is $25 per week would the super rich still be forced to leave their nice houses, friends and connections and take their yachts with them to Nevada, as they would be forced to by a $38 per week increase?