Under Newt Gingrich's Tax Plan, Millionaires Would Pay A Lower Tax Rate Than Teachers
It's long been clear that Newt Gingrich's tax policy is, essentially, "Cut Newt Gingrich's taxes." Now the Tax Policy Center (TPC) has released an analysis of Gingrich's proposals, confirming that the Republican presidential candidate's tax plan would be a windfall for the super-rich, further rigging the system in favor of a handful of millionaires and billionaires at the expense of the rest of the public.
Comparing Gingrich's tax plan to current law, the top one tenth of one percent would get an average tax cut of $2.3 million. Gingrich's tax cuts would have devastating fiscal impact, as TPC found it "would reduce federal tax revenues dramatically. ... [T]he Gingrich plan would lower federal tax liability by $1.28 trillion in calendar year 2015 compared with current law, roughly a 35 percent cut in total projected revenue."
But what's really amazing about Gingrich's plan is that the richest Americans — those making more than $1 million — would, on average, pay a lower tax rate than those making between $40,000 and $1 million. Here's a chart based on TPC's data, showing the average federal tax rates for several income ranges:
Discussions of the "Buffett Rule" — the principle that the super-rich shouldn't pay lower effective tax rates than the middle class — often note that, on average, this doesn't happen, as though that justifies it ever happening. For example, CNNMoney reported earlier this year:
[J]ust in terms of averages, the current tax system already satisfies the Buffett Rule. Americans on average pay 16% of their total income in federal income and payroll taxes, while millionaires pay an average of 20.1%, according to the Tax Policy Center.
Incredibly, Newt Gingrich's tax plan would change that; the average millionaire would pay a lower tax rate than the typical worker earning $45,000.
By drastically reducing total revenue, the Gingrich plan would likely require massive cuts to social safety net programs like Social Security, Medicare, unemployment insurance and food stamps. The poor and middle class would be hit hardest, even if their taxes fell slightly. And millionaires and billionaires would make out like bandits.
Among those fortunate few who would benefit from Newt Gingrich's tax policy? Newt Gingrich. In 2010, he had income of at least $2.6 million. Under his plan, he'd likely pay a lower tax rate than someone making $45,000. Those making at least $1 million would get an average tax cut of $747,000.