The politics of s'im-c'ity....

[classicman]

or a more accurate and complicated assessment.

The big reason is that the estimate presumes the Bush era tax cuts are allowed to expire at the end of 2012 (as provided for under current law) and that a new 3.8% Medicare “surtax” on investment income (to help pay for the health insurance subsidies in Obamacare) takes effect as scheduled on Jan. 1, 2013. If both those things happen, the top tax rate on long term capital gains will go from 15% this year to 23.8% (20% plus 3.8%) while the top rate on ordinary dividends (the kind Apple Inc. announced this week it will start paying) will jump from 15% to 43.4% (39.6% plus 3.8%). And that’s even before the scheduled Jan. 1, 2013 return of a provision that shaves the itemized deductions of the better off, effectively adding another 1.2% points to their tax rate. If all those tax hikes take effect, as scheduled, the rich will be paying more anyway, reducing the potential haul from a new 30% minimum tax. According to the Urban-Brookings Tax Policy Center, if the Bush tax cuts don’t expire, 36% of millionaire households will pay the new minimum tax; if they do expire, the tax will hit just 19% of those households.