Current proposed tax legislation and bills: research and analysis

Fairness in Taxation Act of 2011 was introduced by Jan Schakowsky in order to restore tax fairness through establishing an income tax on federal income tax for individuals with an income of more than $1 million annually. The Illinois Congresswoman introduced the bill in March 2011 as a real solution to the country's revenue crisis at a time when Congressional Republicans were proposing extra tax rates for wealthy and middle- and low-income people. These Republicans were proposing such measures in order to help in footing the bill of the recession and the deficit. One of the major things that the bill seeks to do is to amend the Internal Revenue Code to change income tax rates and to amplify the tax rate on people and married taxpayers who earn more than $1 million annually.

Summary of the Fairness in Taxation Act of 2011:

According to the current taxation policy, the top tax bracket begins at $379,000 resulting in households with these incomes to pay similar rates as those with multi-million and multi-billion dollar incomes or earnings ("The Fairness in Taxation Act," 2011). Consequently, the bill seeks to accomplish its goal through the enactment of new tax brackets that begin from $1 million to $1 billion. The new tax brackets to be enacted through the Fairness in Taxation Act of 2011 include 45% taxation for earnings between $1-10 million, 46% for those between $10 and $20 million, and 47% for earning ranging from $20-100 million. Additional tax brackets in the bill include 48% for earning within $100 million and $1 billion and 49% for earnings over $1 billion.

The other provision in the Fairness in Taxation Act of 2011 is that it also seeks to establish normal income rates on capital gains and dividend income for taxpayers who bring in over $1 million. Consequently, the new taxation plan could generate at least $74.3 billion annually, an amount that is more than enough in making significant progress towards footing the deficit and re-investment in the country's needs.

In past three decades, incomes have stagnated for both middle-income and low-income earners as wealth has largely been shifted from the middle class to the rich. Due to the increased transfer of wealth in the last 30 years, the income inequality has reached its highest peak since 1928. The wealth inequality is evident in the fact that 40% of America's wealth is owned by 1% of the wealthy people who gain 25% of the country's income. While millionaires account for one fifth of one percent of taxpayers, they receive approximately 17.6% of the income tax cuts based on the current taxation policy.

As one of the members of President's Obama's Fiscal Commission, Rep. Jan Schakowsky introduced the Fairness in Taxation Act of 2011 to create five new tax brackets. The bill was introduced as a response to calls by 81% of Americans who support the increase of federal income taxes on millionaires to lessen the deficit. This is largely because it helps in differentiating between well-off people i.e. those making several hundred dollars annually and billionaires.