Tax the rich

The IRS has a data section, much with EXCEL formats here.  Using that data, it’s an interesting excercise to “tax the rich” and assess how it affects the revenue, and therefore the deficit.

Here’s a simple google spreadsheet using 2008 as the baseline, and raising the rates on everyone earning over $200,000.  The rate I’ve chosen is to sock it to those rich bastards by taxing them at an effective 50%-every dollar they earn, take 50%.

Then, you have to take into account drop in earnings caused by the rate increase. Frankly, I think it would be high as 2nd income spouses stop work because their services at home exceed the value of the paycheck, workers opt for more vacation, so forth.  But in the spreadsheet, I assumed only a 10% drop in taxable earnings.

Interesting that i) with a Draconian and political nonstarter increase of approx 25 percent points to 50% and  ii) assuming that revenue will only suffer 10%, the exercise raises $200 Billion-less than 20% of this year’s deficit.

P.S.  Anyone know how to protect a Range (as opposed to an entire sheet) in Google spreadsheets?

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