What’s rich? And at what level of rich should the top tax rate kick in? Today, the top federal tax rate of 35% begins at taxable income of just $379,150 for couples filing jointly. An ongoing attempt by Senate Democrats to impose a surtax on income over $1 million stands little chance of overcoming Republican opposition and Warren Buffett’s proposal for an even higher rate on income above $10 million is, in today’s Congress, just a fantasy.
The states, by contrast, have been pushing upward the definition of rich for tax purposes. Indeed, a deal announced Tuesday by Democratic New York State Gov. Andrew Cuomo, Republican Senate Majority Leader Dean Skelos and Democratic Assembly Speaker Sheldon Silver would lift the income level at which the state’s highest tax kicks in from the current $500,000 per couple to $2 million per couple, while providing a significant rate cut to those below the $2 million level.