Last December as Congress was debating what to do about expiring tax laws, a CBS News poll found that 73 percent of Americans believed the budget deficit was a very serious problem.
How did more than half of those surveyed suggest reducing the deficit? By letting the Bush-era tax cuts for those in the higher income tax brackets expire.
What did Congress do? Lawmakers opted to extend the tax cuts for all, including the wealthy, even though the continued tax breaks add billions to the deficit.
Now 10 Democratic representatives have decided it's time to revisit the upper income tax rates.
Rep. Jan Schakowsky, D-Ill., is the lead sponsor of the Fairness in Taxation Act. She proposes the following income tax rates:
- 45 percent on incomes between $1 million to $10 million.
- 46 percent on incomes between $10 million and $20 million.
- 47 percent on incomes between $20 million and $100 million.
- 48 percent on incomes between $100 million and $1 billion.
- 49 percent on incomes of more than $1 billion.
Schakowsky's bill would also tax capital gains and dividend income as ordinary income for taxpayers with income over $1 million.
The 2011 top tax rate is 35 percent on earnings of more than $379,151 ($189,576 for married taxpayers filing separate returns). The top tax rate on most long-term capital gains and qualified dividends is now just 15 percent.
While Schakowsky's bill has generated some support from progressive public action groups, she faces a challenge to move it in the House of Representatives. Rep. Dave Camp, R-Mich., the chairman of the tax-writing Ways and Means Committee, wants to cut the top tax rate to 25 percent for individuals and corporations.
But both proposals could at least be starting points on the larger issue of comprehensive tax reform. That's what many folks, including myself, see as the eventual answer to deficit reduction.