Whenever I hear a proposal to “tax the rich”, they are talking about a couple making over $250,000 in EARNED (salary) income (or ‘S’ corporation business). I point out that in a high-cost area like New York City or Los Angeles, this would include a hypothetical couple consisting of a cop and a nurse, making a good bit of overtime, which is already drained away by high living expenses and local taxation. Peter Schiff explains why these “rich” are already being taxed at historically high levels;

“Today a married couple with a combined income of $250,000 (assuming each spouse earns 125,000) will pay about 40% of their combined incomes in Social Security, Medicare, and federal taxes, if they take the standard deduction. (I have included as part of their incomes and taxes the Social Security and Medicare taxes paid on their behalf by their employers – which in reality are borne by the employee anyway. I then added that figure to their incomes, and divided the total tax paid by that higher income.  I did not factor in this year’s one time 2% payroll tax holiday.)

Compare that to a household in 1950 that earned $25,000 per year (the approximate equivalent to $250,000 today). Assuming all the income was earned by the husband, which was the norm at the time, the total tax take using the standard deduction and including both the employee and employer social security taxes, would have been just below 22%. In other words, despite claims that taxes are at their lowest levels in 50 years, today’s high earning couple pays over 80% more in federal taxes than their 1950 counterpart!”

via Don’t be Fooled by Political Posturing | Euro Pacific Capital.