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All the fuss over OMG HIGHER TAXES for people making over $250K/year neglects one important detail: these tax brackets are marginal tax rates, not absolute ones
by sethg 16y ago
All the fuss over OMG HIGHER TAXES for people making over $250K/year neglects one important detail: these tax brackets are marginal tax rates, not absolute ones. Even if the rates for people making $250K and up had reverted to Clinton-era levels, someone making $251K of taxable income would be charged almost exactly the same absolute tax rate, all other factors being equal, as someone making $249K.
(ETA: If you look at the table, the hypothetical family’s combined Federal income, AMT, state income, and property taxes range from 18 to 23 percent of their income, depending on where they live.)
- CWuestefeld 16y agoThat's not quite true. There are discontinuities in that neighborhood, most notably AMT. When you hit that, it affects the calculation of the entire tax bill. Your point is generally correct, but at this specific point (and a few others, depending on specific circumstances) there are odd effects that come into play. Of course, if you're trying to make a political point, one can focus on those discontinuities to make all kinds of not-generally-true claims.
- sethg 16y agoI would like to see the tax code become a lot more progressive, but I cheerfully admit that the AMT is an awful kludge.