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Only a poorly designed wealth tax would have that property. This is exactly why progressive tax systems use marginal rates. People wouldn't stop saving at 49 mi
by dgacmu 7y ago
Only a poorly designed wealth tax would have that property. This is exactly why progressive tax systems use marginal rates. People wouldn't stop saving at 49 million when they had to pay tax of 1% on the money above 50 million. they wouldn't stop at 99 million if they had to pay 2% on the parts above 100 million.
- londons_explore 7y agoA lot of people don't understand marginal tax rates. If the population you are taxing doesn't understand the tax system, they will behave according to their understanding of it, rather than reality. I have met plenty of people who say "don't give me a pay rise, I don't want to hit the 40% tax rate", even with a marginal tax scheme with no discontinuities.
- imgabe 7y agoSomeone with a net worth of $50 million should understand marginal tax rates, or at the very least be able to hire someone who does.
- croon 7y agoYou can offer to take the bullet for them. Win-win!
- hackeraccount 7y agoThat's not totally illogical. Generally pay raises come with an expectation of effort and commitment. Maybe the people saying no don't think the after tax amount covers the increases in those things.
- vasilipupkin 7y agoThe issue isn’t that people wouldn’t try getting richer above 50 mln, the issue is that they would try to make it look like they have less than that to avoid extra taxes. Most obviously, a couple worth 98 million can get divorced and, voila, each of them is worth 49 million and they completely avoid the tax. These effects make it difficult to rely on the supposed revenue wealth tax is designed to collect.
- deleted 7y ago[deleted]