Entries in US (3)


What Would France‚Äôs 75% Tax Rate Look Like in US?

iStockphoto/Thinkstock(NEW YORK) -- The French government’s budget presented Friday, which is imposing a 75 percent tax rate for income exceeding 1 million euros ($1.39 million), is expected to inspire a number of wealthy French to move their residency to other countries. The 75 percent rate seems shockingly high, but if it were instituted in the U.S. it would still not be enough to even balance the budget.

How much money would a 75 percent tax rate for people with incomes over $1 million earn in the U.S.?

It’s tough to say, says William McBride, chief economist of the conservative think-tank, The Tax Foundation.  In the “rosiest” scenario of a higher tax-rate, millionaires would continue working, not renounce their citizenship nor find tax shelters, he said.

In France, one’s tax status is mostly based on residency, as opposed to the U.S., which requires all U.S. citizens regardless of residency to file with the Internal Revenue Service.

If the U.S. were to tax 75 percent of millionaires’ entire incomes, not just their income over $1 million, that would yield around $532 billion in tax revenue, he said.

McBride points out that such a tax rate here would make only a 48 percent dent in the nation’s deficit, which is expected to reach $1.1 trillion this year, the Congressional Budget Office said in August.  And that still would not pay down by one dime the $16 trillion plus national debt.

Again, that is in the “rosiest” situation. In France, the 75 percent tax rate is levied on millionaires' incomes only over €1 million and will last only for two years.

“It’s not as if it comes at no cost. The cost is a huge waste of resources in the form of tax planning, investors leaving the country, or investors who stay will stop investing,” McBride said. “There would be a loss in investment over time due to lower productivity, lower wages for everyone. It would cause massive harm to the economy with little or no gain in revenue.”

The top marginal tax rate in the U.S. has ranged from a high of 94 percent during World War II to 91 percent from 1950 to 1963 then gradually falling to the current rate of 35 percent.

Copyright 2012 ABC News Radio


US Penny to Be Kept as Canada Bids Coin Farewell

iStockphoto/Thinkstock(WASHINGTON) -- Loafer wearers, rejoice.

Even though Canada will be saying goodbye to the 1-cent coin in the fall, it seems the U.S. penny is here to stay -- for now.

In 2008, then-Treasury Secretary Henry Paulson suggested eliminating the coin, but the idea did not catch on. In a proposed 2013 budget for the Treasury Department,  a clause proposes legislation that would give the secretary of the Treasury “flexibility to change the composition of coins to more cost-effective materials.”

The move would save the department millions. According to the Treasury Department, the U.S. coin costs 2.4 cents to mint because of rising zinc costs. Last year, the U.S. Mint made 4.9 billion pennies, running up production costs of $118 million.

A change in law would mean a payday for so-called “penny hoarders,” people who have been accumulating the coins -- which are 95 percent copper -- in hope of being allowed to melt them down for the much-sought-after metal.

But Americans for Common Cents is a fierce defender of the U.S. penny. The group is funded by the mining company that sells zinc to the mint.

Mark Weller, the organization’s executive director, said the penny has enjoyed high public support. He also said the mint was looking at making pennies more efficiently.

On Thursday, Canadian Minister of Finance Jim Flaherty announced that Canada would stop minting pennies, since each one cost Canadian taxpayers 1.5 cents to make.

“They take up far too much time for small businesses trying to grow and create jobs,” he said.

Copyright 2012 ABC News Radio


Improvement in State Unemployment Slowed in May

U.S. Bureau of Labor Statistics(WASHINGTON) -- The modest improvement in the nation's jobs situation slowed during May in much of the country, according to a new report released on Friday by the U.S. Bureau of Labor Statistics.

The Regional and State Employment report found that 24 states recorded unemployment rate decreases, while 13 states and the District of Columbia registered rate increases, and 13 states had no rate change at all.

During the past year, however, the situation has been markedly improved.  Between May 2010 and May 2011, 43 states and Washington, D.C. saw their unemployment rates drop.

Furthermore, on a regional basis, all four sections of the country saw significant year-over-year decreases in the unemployment rate.  The Midwest topped the drops with 1.5 percent, followed by the Northeast with 0.8 percent, the West with 0.7 percent and the South 0.5.

Overall, the West reported the highest regional unemployment rate in May with 10.3 percent, while the Northeast and Midwest recorded the lowest rates, with 8.0 and 8.1 percent, respectively.

Copyright 2011 ABC News Radio

ABC News Radio