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I don’t know if this is right and can’t find the source, but I vaguely remembering around 40% is when the government doesn’t actually take home more income by r

I don’t know if this is right and can’t find the source, but I vaguely remembering around 40% is when the government doesn’t actually take home more income by raising taxes, because rich people start moving away/hiding income. I do have to say anecdotally that 40% does “feel” around the upper limit of what’s “fair” to me..

tax123 6y ago
I could see this being true. I know myself, and several others I know who are currently moving (mainly in the 7 to low 8 figures per year range) that are currently moving abroad that would likely just stay put at a flat 40% rate. I know it's entirely psychological, but going over the 50% mark has annoyed several of my peers (and myself) and fueled this move. Something about receiving less than half of what you work for rubs you the wrong way.
- zo1 6y ago
  50% is a very psychological number. It's half, and telling people that half of their time is spent on money that they literally let someone else spend for the social-good is not a good thing. Start getting into the 80%+ range, and the conversation should rightfully center around indentured servitude and slavery. One thing that I don't understand why were not discussing/suggesting: If we must have taxes, and we want to go above 40/50%, why not consider giving people more choice in where that money gets spent as a way to offset the "negative" feelings. I think a lot of people would be more okay with large percentage tax-values if they were in control of what that money was being spent on.
zo1 6y ago
You may be thinking of the Laffer curve (https://en.wikipedia.org/wiki/Laffer_curve https://en.wikipedia.org/wiki/Laffer_curve). Though my understanding of it is that it doesn't prescribe any singulary "point" like 40%, but just says that there is a point somewhere and that this is the relative behavior of total tax collection around it, wherever it exists.
pydry 6y ago
From 1932 to 1986 the marginal top rate was >= 50%, topping out at 92% https://cdn.theatlantic.com/thumbor/fNk9ykzBXTBck1HJK0pFxYhXMB8=/672x1015/filters:format(png)/media/img/posts/2019/01/TaxRatesClean/original.png https://cdn.theatlantic.com/thumbor/fNk9ykzBXTBck1HJK0pFxYhX... As soon as it fell below 50%, median income growth stalled and hasn't really budged ever since: https://en.wikipedia.org/wiki/Causes_of_income_inequality_in_the_United_States#/media/File:2008_Top1percentUSA.png https://en.wikipedia.org/wiki/Causes_of_income_inequality_in... Compounding is one potential reason why. A 92% top tax rate helps keep a lid on geometric wealth growth via compounding.

tax123 6y ago

I could see this being true. I know myself, and several others I know who are currently moving (mainly in the 7 to low 8 figures per year range) that are currently moving abroad that would likely just stay put at a flat 40% rate. I know it's entirely psychological, but going over the 50% mark has annoyed several of my peers (and myself) and fueled this move. Something about receiving less than half of what you work for rubs you the wrong way.

zo1 6y ago
50% is a very psychological number. It's half, and telling people that half of their time is spent on money that they literally let someone else spend for the social-good is not a good thing. Start getting into the 80%+ range, and the conversation should rightfully center around indentured servitude and slavery. One thing that I don't understand why were not discussing/suggesting: If we must have taxes, and we want to go above 40/50%, why not consider giving people more choice in where that money gets spent as a way to offset the "negative" feelings. I think a lot of people would be more okay with large percentage tax-values if they were in control of what that money was being spent on.

zo1 6y ago

You may be thinking of the Laffer curve (https://en.wikipedia.org/wiki/Laffer_curve https://en.wikipedia.org/wiki/Laffer_curve). Though my understanding of it is that it doesn't prescribe any singulary "point" like 40%, but just says that there is a point somewhere and that this is the relative behavior of total tax collection around it, wherever it exists.

pydry 6y ago

From 1932 to 1986 the marginal top rate was >= 50%, topping out at 92% https://cdn.theatlantic.com/thumbor/fNk9ykzBXTBck1HJK0pFxYhXMB8=/672x1015/filters:format(png)/media/img/posts/2019/01/TaxRatesClean/original.png https://cdn.theatlantic.com/thumbor/fNk9ykzBXTBck1HJK0pFxYhX... As soon as it fell below 50%, median income growth stalled and hasn't really budged ever since: https://en.wikipedia.org/wiki/Causes_of_income_inequality_in_the_United_States#/media/File:2008_Top1percentUSA.png https://en.wikipedia.org/wiki/Causes_of_income_inequality_in... Compounding is one potential reason why. A 92% top tax rate helps keep a lid on geometric wealth growth via compounding.