It's no secret that the personal income tax rates we have now are completely unsustainable. However, in my opinion simply reverting to Clinton-era tax rates is not really the greatest position either for current economic conditions and that some modification is necessary.
Now before you get all huffy-puffy hear me out on this. I do believe the personal tax rates should go up for those with higher incomes. However that is NOT the only part of the picture that needs to be discussed. The solution, as always, is much more complex than that.
(Note: I'm a real novice at this sort of thing, so by all means drop your constructive criticism in the comments)
Clinton was on the right path when he pushed for a pair of new high-income tax brackets with marginally higher rates (the top rate was ~39% at ~$375k, ~35% at ~$373k after the Bush cuts). Unfortunately even at that time, this move didn't provide much help to those in the (upper) middle class, namely the small business owners who are the heart of our economy.
The gross income of a small business varies greatly - from a few thousand to a few million dollars. Having worked in a small business for several years, I've come to realize that although a million dollars sure sounds like a lot, it's pocket change in the big picture. The money a business brings in gets spent quickly on ongoing needs - payroll, good health insurance for the employees, materials, rent & electricity, and keeping the business modern & ahead of the competition. These costs are not static either - they have been continually rising as a result of the inflation of the dollar which has occurred over the past 35 years. In short, when you're running a business a million bucks just doesn't go as far as it did in 1981, and it didn't go too far in 1993 either. Yes, I admit that many Republicans/Conservatives have used this position as a long standing argument for cutting taxes. However their position has been far too extreme because it allowed billions of dollars to be funneled to the extremely wealthy (who simply park it instead of investing it, i.e. voodoo economics) rather than to small businesses where it would do the most good for our economy and our society as a whole.
So how do we find a balance? One of the missing parts of the solution, which Clinton didn't address well enough, is to adjust the tax brackets & rates to better fit small businesses (whose owners usually file as S-corps and declare the business profits as personal income). At the same time, the tax burden needs to be shifted back onto the extremely wealthy, whose money is used to idle and collect interest, drive commodity speculation that causes inflation and corrupt the government of all the people.
Here's how I believe the brackets & ranges should be adjusted:
10%: $0 - 15,000 (currently $0 - 8,375)
15%: $15,001 - 82,500 (currently $8,376 - 34,000)
22%: $82,501 - $250,000 (new bracket, replaces 25% from $34,001 - 82,400)
28%: $250,001 - $650,000 (currently $82,401 - 171,850)
33%: $650,001 - $1.5 million (currently $171,851 - 373,650)
35%: $1.5mil+1 - $10 million (currently $373,650+)
39%: $10mil+1 - $150 million (new bracket)
55%: $150 million + (new bracket)
These figures are all extremely off-the-cuff and tuned to my own ideas on what's reasonably wealthy and what's too damn wealthy, and aren't based on any serious analysis or theories - you could say that I just pulled numbers out of my ass & messed around with them for a while.
Another idea I tossed around was tax credits. Personally I don't believe the goals I mentioned above can be reached the right way via tax credits, since as we've seen in the case of Bank of America they take them while running to their tax shelters in Bermuda. Plus tax credits make the system more complex than it needs to be. So the best solution is to load the benefit to small business owners at the front (keeping their overall rate down) rather than the back (giving them a credit after the fact).