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Raise federal income taxes rates and create additional tax brackets. Or, better, replace discrete tax brackets by a monotonously continuously increasing functio
by Victerius 4y ago
Raise federal income taxes rates and create additional tax brackets. Or, better, replace discrete tax brackets by a monotonously continuously increasing function t=f(x), where x=taxable income and t=effective tax rate. The function could have certain properties such as t>0 for all x>standard deduction, t=0 for x<standard deduction, lim t (x->infinity) = 0.5 or something like that, and df/dx > 0 for all x > standard deduction.
- NovemberWhiskey 4y agoMy always-unpopular opinion on this is that way, way too few Americans actually pay any Federal income tax.
- newaccount2021 4y ago
- ceejayoz 4y ago60% of households will pay some Federal income tax this year. https://www.cnbc.com/2022/10/28/more-than-40percent-of-us-households-will-owe-no-federal-income-tax-for-2022.html https://www.cnbc.com/2022/10/28/more-than-40percent-of-us-ho... The ones that don't - almost entirely low-income households - spend essentially every penny they earn. Taxing them winds up being more of an economic drag than anything else, and increases need for government assistance. Taxing them is fiscally irresponsible.
- NovemberWhiskey 4y ago30% of households in the $50-75K income range will pay no federal tax. Are you defining those as "low-income households"?
- ceejayoz 4y agoYes, a household making $50k in some areas of the country with a couple of children will absolutely be in the low-income realm that spends every penny that comes in.
- cycrutchfield 4y agoYou’re talking about billionaires, right?
- refurb 4y agoNo, it's the lowest income earners who pay 0% income tax despite people screaming about how "unfair" the tax system is. The US tax system is highly progressive in terms of rates.
- dwater 4y agoIf you ignore deductions.
- refurb 4y agoNope. The IRS publishes effective taxes rates for income quintiles. The effective rate goes up as you go up in income. It is true the effective rate is lower than the statutory rate for a given bracket, but that's true for all income levels.
- yoyohello13 4y agoAre you saying we should be taxing people who can barely afford to put food on the table?
- NovemberWhiskey 4y agoI think the basic point is that no-one believes that 40% of all American households are in the "can barely afford to put food on the table" category; and that it's hard to have a well-functioning national democracy if some significant fraction of voters are not invested in funding the national government.
- ceejayoz 4y agoI believe it. https://www.cnbc.com/2022/03/08/as-prices-rise-64-percent-of-americans-live-paycheck-to-paycheck.html https://www.cnbc.com/2022/03/08/as-prices-rise-64-percent-of... > At the start of 2022, 64% of the U.S. population was living paycheck to paycheck, up from 61% in December and just shy of the high of 65% in 2020, according to a LendingClub report.
- mensetmanusman 4y agoThis is a symptom of the disease of extreme wealth inequality. If all of the profits are made by just a few people, it makes sense that very few will be involved otherwise. This is absolutely weakening the country, and it would be far better if less wealth inequality existed and more people could afford to pay taxes.
- refurb 4y agoThis is a symptom of the disease of extreme wealth inequality. No it's not, it's a symptom of the way the tax system is set up. You can have 40% not paying any income tax no matter what your inequality is.
- mensetmanusman 4y agoIt’s both, because there is pressure on the tax system to collect more from the fewer remaining earners.
- refurb 4y ago"Fewer remaining earners"? There is no change in earners unless they aren't making any money.
- elil17 4y agoA function like that would be hard for most people to understand/calculate, and you can approximate it pretty well with a couple extra tax brackets.
- jjk166 4y agoLuckily they make machines that were good at performing mathematical calculations and which were so ubiquitous that everyone has ready access to them and most people have at least one on their person at any given time. The tax bracket system has proven to be a confusing system which is hard to adjust properly and handles the long tail of extreme wealth very poorly. It is a compromise between efficacy and simplicity that achieves neither. In this day and age, easy calculability ought to be a very low priority goal.
- tamaharbor 4y agoPeople have to get used to socialism first, THEN hit them with higher taxes after it is too late to turn back.