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I am surprised by how infrequently I see the arbitrary progressive tax bracket levels being brought up in these debates. The fact that you are considered ultra

I am surprised by how infrequently I see the arbitrary progressive tax bracket levels being brought up in these debates. The fact that you are considered ultra wealthy and paying at about the top bracket at ~200k per year is absurd. Meanwhile there is no progressive taxation for capital gains. The highest brackets should be stretched into the tens of millions (or even in the hundreds), and taxes should be significantly lower for the upper middle class (for whom it is increasingly difficult to become upper class through hard, good work and a somewhat standard career directory).

evanpw 8y ago
> there is no progressive taxation for capital gains (I know this is not your main point, but) short-term capital gains are taxed at the same rate as ordinary income, and long-term gains have three brackets (0%, 15%, and 20%).
- dahdum 8y ago
  Goes up to 23.8% federal due to ACA, along with 13.3% CA state tax for long term capital gains. Just about the highest in the developed world IIRC.
tfehring 8y ago
Better yet, tax wealth instead of income. The value derived from government services is more closely proportional to wealth than to income, and income-based taxation is inherently regressive compared to wealth-based taxation. The only significant wealth-based tax in the US is property tax, and even that is somewhat regressive because the share of income and wealth spent on housing decrease as income and wealth increase.
- walshemj 8y ago
  That wouldn't work have you not heard of splits :-) ie trusts / funds designed with separate classes of share one gives income one gives capital gain.
- dahdum 8y ago
  Inflation is the tax on wealth, and much easier to administer and harder to avoid than a wealth tax program would.
  - benlorenzetti 8y ago
    Inflation is more a tax on wage income than existing wealth, because investments will inflate in addition to their productive growth returns.
  - TomK32 8y ago
    buy property, rent it out, raise rents above the inflation rate. simple.
  - tuesdayrain 8y ago
    Inflation is a tax on cash, not wealth
- lend000 8y ago
  I disagree with wealth taxation -- wealth can be tied up in illiquid assets (longtime family home, grandma's jewels, etc.) and even more importantly, a tax on wealth kind of makes it like you don't really own property, you are just leasing property rights from the government. Not a hallmark of a free society in my opinion (land taxes are questionable for the same reason), whereas a tax on economic activity made possible by a government that enforces a market structure / the rule of law seems far more amenable. However, I will add that I could maybe get behind minor wealth adjustments for income taxation, if the incentives could be figured out. For example, a lower bracket person / new college grad with no wealth who had a really good year financially by consulting or something might pay a slightly lower amount than a longtime VP who has accumulated significant wealth, but had the same income for the year. This encourages people to spend, not save, though, and it still is indirectly taxing property rights. Perhaps a better way would be to adjust based on the moving average of previous incomes.
JustSomeNobody 8y ago
The lower brackets need work too. If the poor are doing what the wealthy say they should be doing and picking themselves up by the bootstraps, they eventually hit that tax cliff from 12 to 22% where a raise can actually penalize them. "Hi poor people! Welcome to making money, here let me take 10% more of it away from you. Can't let ya catch up too fast, now can I!?"
- foota 8y ago
  That's not how tax brackets work. The new bracket applies only to income in that bracket, entering the 22% bracket means that income above that threshold is taxed at 22%, your income below that is still taxed at 12%.
- derekp7 8y ago
  The higher tax bracket only applies to the additional dollars earned, so mathematically it can't penalize you when you make more money (I'm assuming you are using "penalize" to mean "you take home less overall pay"). And you have to make about 50K (factoring in the 12K standard deduction) for that to happen. At that point, you should be using some of the extra money to dump into a 401(k) plan, which comes "off the top" for tax purposes. So 10% in 401(k) means you have to hit 55K before the additional funds start to diminish returns.

evanpw 8y ago

> there is no progressive taxation for capital gains (I know this is not your main point, but) short-term capital gains are taxed at the same rate as ordinary income, and long-term gains have three brackets (0%, 15%, and 20%).

dahdum 8y ago
Goes up to 23.8% federal due to ACA, along with 13.3% CA state tax for long term capital gains. Just about the highest in the developed world IIRC.

tfehring 8y ago

Better yet, tax wealth instead of income. The value derived from government services is more closely proportional to wealth than to income, and income-based taxation is inherently regressive compared to wealth-based taxation. The only significant wealth-based tax in the US is property tax, and even that is somewhat regressive because the share of income and wealth spent on housing decrease as income and wealth increase.

walshemj 8y ago
That wouldn't work have you not heard of splits :-) ie trusts / funds designed with separate classes of share one gives income one gives capital gain.
dahdum 8y ago
Inflation is the tax on wealth, and much easier to administer and harder to avoid than a wealth tax program would.
- benlorenzetti 8y ago
  Inflation is more a tax on wage income than existing wealth, because investments will inflate in addition to their productive growth returns.
- TomK32 8y ago
  buy property, rent it out, raise rents above the inflation rate. simple.
- tuesdayrain 8y ago
  Inflation is a tax on cash, not wealth
lend000 8y ago
I disagree with wealth taxation -- wealth can be tied up in illiquid assets (longtime family home, grandma's jewels, etc.) and even more importantly, a tax on wealth kind of makes it like you don't really own property, you are just leasing property rights from the government. Not a hallmark of a free society in my opinion (land taxes are questionable for the same reason), whereas a tax on economic activity made possible by a government that enforces a market structure / the rule of law seems far more amenable. However, I will add that I could maybe get behind minor wealth adjustments for income taxation, if the incentives could be figured out. For example, a lower bracket person / new college grad with no wealth who had a really good year financially by consulting or something might pay a slightly lower amount than a longtime VP who has accumulated significant wealth, but had the same income for the year. This encourages people to spend, not save, though, and it still is indirectly taxing property rights. Perhaps a better way would be to adjust based on the moving average of previous incomes.

JustSomeNobody 8y ago

The lower brackets need work too. If the poor are doing what the wealthy say they should be doing and picking themselves up by the bootstraps, they eventually hit that tax cliff from 12 to 22% where a raise can actually penalize them. "Hi poor people! Welcome to making money, here let me take 10% more of it away from you. Can't let ya catch up too fast, now can I!?"

foota 8y ago
That's not how tax brackets work. The new bracket applies only to income in that bracket, entering the 22% bracket means that income above that threshold is taxed at 22%, your income below that is still taxed at 12%.
derekp7 8y ago
The higher tax bracket only applies to the additional dollars earned, so mathematically it can't penalize you when you make more money (I'm assuming you are using "penalize" to mean "you take home less overall pay"). And you have to make about 50K (factoring in the 12K standard deduction) for that to happen. At that point, you should be using some of the extra money to dump into a 401(k) plan, which comes "off the top" for tax purposes. So 10% in 401(k) means you have to hit 55K before the additional funds start to diminish returns.