Not a 5.4% Surtax, but a 15.4% Surtax
July 16th 2009 14:07
The media is reporting the House Democrats plan to place a 5.4% surtax on income over $350,000. However, this is a misrepresentation of the true increase of the tax. Currently, there is a 35% marginal rate, which will be raised by 5.4 percentage points (not percent) to 40.4%. This would be an increase of 15.4% (= 5.4%/35%). To be truly accurate, the media should be reporting that the House Democrats are proposing a 15.4% surtax.
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