The coming Congressional debate over fiscal policy is sure to
feature a wide array of proposals, some of which would hit
certain taxpayers harder than others. But one idea being floated
by Congressional negotiators, as described in an article by The
New York Times’s Jonathan Weisman on Thursday, is hard to defend
from the standpoint of rational public policy making. Its
arithmetic could require that the 300,000th dollar of income was
taxed at a rate of about 50 percent – even while the three
millionth dollar of income, or the three billionth, was taxed at
a lower 35 percent rate instead. The math behind these
calculations is not all that complicated. It’s just a matter of
understanding how marginal tax rates work. Take an American who
earns $400,000 a year in taxable income. (This is roughly the
threshold at which a taxpayer reaches the top 1 percent of
households.) The top marginal federal income tax rate is now 35
percent, and kicks in at earnings above $388,350. Someone making
$400,000 is above the $388,35