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I get it. You're explaining the point of a "flat tax": increased tax rates just because you're more productive (and fairly compensated for it) isn't fair. Likew
by ctdonath 13y ago
I get it. You're explaining the point of a "flat tax": increased tax rates just because you're more productive (and fairly compensated for it) isn't fair. Likewise, getting unusual lump payments (overtime, bonuses) often have tax deducted at the highest rate to ensure you pay at least enough, getting the over-deducted fraction back later only when you've proven that you're not in the higher tax bracket after all (you may be in a 30% bracket, but get a bonus deducted as if you're in the 50%, getting back the over-paid 20% only after the end of the tax year, which could be upwards of a year).
Working harder, under most "progressive" tax systems, provides diminishing returns because of higher tax rates - right at the point when the personal cost of extra work grow exponentially.