Oh, you want to raise taxes on the "Rich" right? Well, that's always the claim but its BS because the reality is even if you do this, you're just increasing the cost of living for the poor, or decreasing the jobs created for them.
This is an absurd and illogical position perpetuated by the Fox Republican "speaking points".
Let's say you have a senior executive earning $2 million in salary that is taxed at the highest marginal rate of 35% (which translates to an effective rate of 33.67%). Now we lower taxes for the rich and reduce the federal taxes to 32% or 28%. The only way you can maintain that this creates jobs is by the assumption that the additional take home of either $50K or $122K will be spent and that spending will create jobs (the assumes that the entire $2 million constitutes taxable income). But most economists will tell you that it doesn't get spent. It might get invested, but that investment won't create jobs in the current environment because most public companies are already sitting on tons of cash that isn't getting spent (except perhaps on bonuses or stock buy-backs) so they don't need the additional investment to hire people.
Now let's go the other way: Let's say you raised that 35% to 39.6%, which is scheduled to happen next year. That's an extra $85K in taxes for that guy who makes $2 million. Tell me how that raises costs for the poor. Do you think that CEO is going to raise prices on the products/services his company produces because his personal net post-tax income went down by $85,000?
But if the Government got that extra $85K, that could pay the salary for an extra school teacher, public hospital worker, fire fighter, police officer, or for some road paving, a school repair, part of a sewer pipe replacement, etc. That does indeed most directly create jobs. And they are jobs that pay taxes as well.
And when you reduce taxes on the middle-class and poor, that also creates jobs because most spend 100% of what they take home.
One might be able to make the case that reducing corporate taxes creates jobs, except that corporations are making record profits and sitting on record amounts of cash and they're still not hiring.
Of course most super high-income people make most of their money on investments rather than salary and pay the incredibly low long-term capital gains rate of only 18%, far less than most middle-class salaried people. (How Mr. Romney got his effective rate down to 14% is beyond my understanding, since I didn't think you could take any deductions on capital gains.)
During the Nixon administration, the top marginal rate was around 70%. During the Reagan administration, which all Conservatives claim to worship, the top marginal rate was 50%. It's now 35% (although going up for 2013 unless Congress changes it again).
Conservatives like to say that the country is bankrupt because we have less coming in than we're spending. They're correct: you can't fight two wars and lower taxes and come out ahead. That was the myth of the Bush administration. But we have less coming in because the rich haven't paid their fair share in years in spite of the fact that wealth has become incredibly concentrated and the rich have gotten much richer while the middle-class and poor haven't seen real income gains in decades.
Next year's supposed tax increase seeks to rectify some of that, although the problem from my standpoint is that it also raises the rates on the lowest tax brackets. If one earns less than $12,400 (head of household), their taxes go up 5%, which is a 50% tax increase for them. IMO, that's criminal. But let's cry for the poor Wall Street bonus babies instead.
I would maintain that in markets where rich and poor live and work in close proximity, like New York, the rich raise prices for everyone. If there's enough rich people in a given neighborhood, it raises co-op/condo/rental prices across the board and it also raises the cost of basic services for everyone, like the price of food, restaurants, dry-cleaners, even the price of a bagel, etc. because the rich are not price sensitive. This is the real story of trickle-down economics...income doesn't trickle down, but costs do. This is why within another ten years, there won't be any middle-class people left in Manhattan below 125th street, except those who already have paid off their mortgages. New housing in Manhattan generally starts at over $2 million and the average price of all apartments in Manhattan is about $1.4 million. So as the rich get richer, we're going to have an even more fragmented and isolated society.