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We, conceptually and practically, _already_ have a way to collect extra taxes from people with higher income — it’s called tax brackets. Adjusting the brackets
by amluto 5y ago
We, conceptually and practically, _already_ have a way to collect extra taxes from people with higher income — it’s called tax brackets. Adjusting the brackets a bit to collect that extra $7k (or more) from people who earn a few hundred K per year is straightforward, and it more easily preserves the nice property of having net taxes paid (tax minus subsidies) being convex as a function of income.
I realize that health care in particular is a horrible mess due to most higher income people getting insurance through employer group policies. That, in and of itself, is a problem, and fixing would have the added benefit of removing a large disincentive to changing jobs or leaving a bad job.
- xyzzyz 5y ago> Adjusting the brackets a bit to collect that extra $7k (or more) from people who earn a few hundred K per year is straightforward, It’s less straightforward than you think. Please, show me how to modify the current brackets to collect extra $7k from households making >$200k (but not more than $7k), and do slow phaseout starting from above $100k. Then, do the same also for TANF, SNAP, SSI etc, all at the same time, and all at different thresholds. After doing this exercise, you’ll find that it’s much easier to think about it in terms of keeping brackets the same for all, and having separate, phased out deductions, rather to fiddle with the brackets.