(no subject)

[enders-shadow.livejournal.com]

I admit this is a nascent thought, but here goes anyway:

idea for a progressive tax system:


the % paid goes up for each additional digit
so a person making 4 digits a year pays no taxes
a person making 5 digits a year pays 5%
a person making 6 digits a year pays 10%
a person making 7 digits a year pays 15%
a person making 8 digits a year pays 25%

and so on. (exact %'s aren't the point here, but the idea is)
we can cap it at those making 10 digits paying, say, 50% a year


thoughts?

Comments

[telemann.livejournal.com]

I wondered if you know about this:

Jan Schakowsky Introduces Bill to Tax Millionaires and Billionaires


The Fairness in Taxation Act asks enacts new tax brackets for income starting at $1 million and ends with a $1 billion bracket. The new brackets would be:

* $1-10 million: 45%
* $10-20 million: 46%
* $20-100 million: 47%
* $100 million to $1 billion: 48%
* $1 billion and over: 49%

The bill would also tax capital gains and dividend income as ordinary income for those taxpayers with income over $1 million. If enacted in 2011, the Fairness in Taxation Act would raise more than $78 billion.

These proposed tax brackets are STILL lower than the over tax rates proposed by Ronald Reagan when the tax code was overhauled in the 1980s.

[allisnow.livejournal.com]

I admit I don't know what the rates are now and how these compare, but obviously this would be an increase. So what keeps millionaires and billionaires from just leaving the country, which would lead to the gov't getting 0% of their income?

[kylinrouge.livejournal.com]

This looks good. The fact is, our 'highest bracket' is woefully out of date, and to claim that someone making 300k is 'rich' now is ludicrous. At worst they're upper middle class, at best they're lower upper class.

[badlydrawnjeff.livejournal.com]

Well, problems with a "progressive" tax system aside, it's better than what we have now.

Crime is relative?

[montecristo.livejournal.com]

In much the same way that rape is better than murder?

[enders-shadow.livejournal.com]

what, exactly, are the problems with a progressive tax system?

[caerfrli.livejournal.com]

Does your system have tax exemptions?

[stewstewstewdio.livejournal.com]

Maybe not at first. But after a while, it will so that there can be incentives and deterrents so that the private sector can control the economy as it wishes.

[rick-day.livejournal.com]

You seem to have a thing for 'digits'.

Do you have digitalis? But I digress...

How about instead we eliminate taxes on revenue and income, and instead base a progressive tax on consumption (progressing from necessity like food or health care, to luxury like a non-commercial hundred fucking foot boat), which will give us GREAT incentive to conserve resources?

[anfalicious.livejournal.com]

I think this is in part going to happen with pollution taxes. The Australian one is going to be announced in the next few weeks and is going to include many, many handouts. My guess is that I will end up paying less income tax, but will pay more for electricity and petrol. I have a pretty small carbon footprint already so I imagine that I will end up far better off under the new scheme. It's not like I'm not going to still be using my money in the economy, it's just that my purchasing power will be more powerful amongst products that pollute less. The losers are going to be the ones spending the planet like there is no tomorrow; I don't think that's a bad thing.

[fizzyland.livejournal.com]

Fuck it, kill every loophole, allow no deductions and charge a simple 10% across the board to everyone on every penny of income.

[geezer-also.livejournal.com]

I'd agree with that!!

[allisnow.livejournal.com]

But the poor!!11

[dwer.livejournal.com]

I presume you're blocking up the loopholes? otherwise, this won't be nearly enough.

A serious question

[geezer-also.livejournal.com]

Does anyone know or have a link that knows how many people make more than 10 Million a year, and what their occupations are?

Re: A serious question

[allisnow.livejournal.com]

I don't know about occupations, but does this (http://www.socialsecurity.gov/cgi-bin/netcomp.cgi?year=2009) help at all?

ETA: It's worth noting that the data here comes to W2s, and I think I read something recently that says the avg 'wealthy' person only makes about 20% of their money from income... the majority is from investments.

[chipuni.livejournal.com]

Before you choose any numbers, you should find out a few things:

1. How much does it cost to run the government?
2. How much does your proposed tax system bring in?

[enders-shadow.livejournal.com]

did you not notice that this was phrased in the abstract?

[foreverbeach.livejournal.com]

Why not just tax everyone and every corporation at a 100% rate? After government expenditures, refunds (if any) can be granted however the overlords deem appropriate.

[enders-shadow.livejournal.com]

that's dumb
why would i do that?

fuck italy

[eracerhead.livejournal.com]

What is wrong with a flat tax? Just calculate the gross cost of government as a percentage of GDI. Everybody contributes and the costs are more transparent.

[kylinrouge.livejournal.com]

Flat taxes disproportionally tax the poor a higher percentage of their disposable income.

[jlc20thmaine.livejournal.com]

You can tax the rich as much as you want but it still will not solve the problems.

[the-s3ntinel.livejournal.com]

That makes about as much sense as saying: "you can flex your quadriceps muscles as much as you want but it will not solve your problems".

[kylinrouge.livejournal.com]

Everyone would pay either nothing or less than they do now. I don't think we can afford to bring in even less revenue than we already do.

[rasilio.livejournal.com]

Couple of things.

First, Are these marginal rates or are they absolute rates. If they are absolute then you are going to get all kinds of screwy economic behavior because you'll be in the situation where going from $99,999 in income to $100,000 in income your take home pay drops from $94,999 to $90,000. If they are marginal then the top several rates would be effectively meaningless in terms of the revenue they generate, You can calculate this by using this chart from the IRS...

http://www.irs.gov/pub/irs-soi/08in35tr.xls

It shows the breakdown of tax returns by income group for tax year 2008

So this system in that year would have generated the following revenues..

25% Bracket - $54 Billion
15% Bracket - $61 Billion
10% Bracket - $443 Billion
5% Bracket - $151 Billion

If the rates were absolute then it would be...

25% Bracket - $87 Billion
15% Bracket - $148 Billion
10% Bracket - $763 Billion
5% Bracket - $561 Billion

As you can see, the taxes generated by those earning over $1 million a year are rather negligible here, even worse the difference between leaving the top rate (in this system) at 15% and keeping the 25% bracket is only $22 and $25 Billion a year for marginal and absolute rates respectively. Enough to maybe justify the rate on the basis of it's income but hardly a difference maker in the budget. Rates beyond that 25% however would clearly just be there for punitive purposes because they would literally not generate enough additional taxes to matter.




Second, you do realize that this system would be a massive tax increase on the poor (who currently pay 0.4% for income taxes on average), a small tax increase on the lower middle class, and a tax cut for most of the rich right?

It's still advocating an entitlement to steal.

[montecristo.livejournal.com]

Either we are each equal and sovereign or else some are more equal than others, with special licenses to audit their neighbors and assess their wealth for confiscation. You cannot have it both ways. Either people are equal and sovereign, meaning that nobody has an annointed priviledge of demanding an accounting of their neighbor's personal worth and taking unwillingly from anyone else, or else the central premise of "democracy" is a farce and a hypocrissy. Even John Rawls's idea of justice requires a libertarian anarchy. (http://mises.org/daily/2534)

[deborahkla.livejournal.com]

Any flat tax at all penalizes the middle class and the poor because it takes more of their income. People who have more money didn't get that money in a vacuum. People who earn more should pay more, not least because they're earning more because others being paid less--the average CEO earns 300x what the average worker earns, and incomes have remained flat for the middle class for years now.

It wasn't until Reagan's last year of presidency that taxes on the wealthy were reduced to 28.8%, and that set off the recession that lost Bush I re-election. Prior to that they were 50% through 1987, when they were reduced to 38.5%, before the change in 1988.

It wasn't until Clinton increased them to 39% that we had the economic boom that led to the first budget SURPLUS in 40 years. All of that was lost when
Bush II reduced them to 35% and started two wars.

[kylinrouge.livejournal.com]

Agreed with all of that.

Unfortunately now Obama can be added to the list of debt-damaging tax cuts by allowing the extension of Bush's failure cuts.

[gunslnger.livejournal.com]

So, then I'd be fine with staying at $99,999 until they can bump it up to $125,000 in one jump.

[kylinrouge.livejournal.com]

You don't understand how a progressive tax system works.

[foolsguinea.livejournal.com]

I proposed something similar once. I'd adjust those numbers, but yeah, something like that.

Wait, I didn't propose it anywhere that mattered. I suggested it on an internet discussion board and my responses were split between people not getting it & people wanting a comparison to present rates (which I didn't have at the time).