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Can you explain how you arrived at 75% effective tax rate for the top 10% and 90% marginal tax rate for income over $1 million? The math isn't working out for m

• rhino369 9y ago
  I didn't come up with it. I'm asking if the math works out and the response was basically, as long as the marginal rate isn't over 100% it works. I don't think that is accurate. If someone modeled a realistic tax rate I'd love to see what they came up with.
  • ska 9y ago
    as long as the marginal rate isn't over 100% it works. That certainly wasn't my intended response. You can make the math work with realistic numbers, or at least it seems that way. Assume a 10-15% effective rate increase on highest income earners, even better if fewer loopholes are available, and you can fund such a program. That would put the US still lower but more in line with a number of other countries, so that's at least plausible. I'll try and dig up a worked example that isn't oversimplified. I buy your argument that there is a marginal rate at which this doesn't work, but haven't seen evidence that it is necessary.
  • vostok 9y ago
    What about the 18% increase for a $10,000 BI per household. The 90th percentile household makes ~$140k. Even at California's tax rates such a household currently pays ~30% in income taxes including payroll taxes if you assume no mortgage or retirement savings. If they don't live in California, save for retirement, or have a mortgage then they pay less. Under the 18%/10000 proposal, this household would pay an effective rate of 41-42%. This doesn't even account for the fact that BI would reduce welfare, social security, etc. After accounting for that, we're probably closer to 35% than to 40%, but you can make a rough estimate on your own.