As you climb tax rates, only your income over the trigger is taxed at the higher rate, so it wouldn't be wise to forgo a raise simply to avoid a higher tax bracket.
As you climb tax rates, only your income over the trigger is taxed at the higher rate, so it wouldn't be wise to forgo a raise simply to avoid a higher tax bracket.
It's still a disincentive. Government should protect pursuit of happiness.
I like the Fair Tax. If its fair for people with higher incomes to pay more taxes then the best way to accomplish that is through spending. Otherwise we're always arguing about some subjective numbers.
"If a politician found he had cannibals among his constituents, he would promise them missionaries for dinner."
"The most dangerous man to any government is the man who is able to think things out... without regard to the prevailing superstitions and taboos. Almost inevitably he comes to the conclusion that the government he lives under is dishonest, insane, intolerable."
H. L. Mencken
And there's a rebate for basics.
Here you go again, debating taxation when the problem is SPENDING. If government were cut back to the 20 percent of GNP that all of it consumed in 1960, taxation wouldn't mean crap.
Agree, cutting taxes just forces government to borrow more. Getting government to stop spending doesn't seem to be working very well. All they do is fuss about reducing the rate of spending increases.
It's a question of when the government bubble will burst.
When I got in the thread was about taxes.
"If a politician found he had cannibals among his constituents, he would promise them missionaries for dinner."
"The most dangerous man to any government is the man who is able to think things out... without regard to the prevailing superstitions and taboos. Almost inevitably he comes to the conclusion that the government he lives under is dishonest, insane, intolerable."
H. L. Mencken
The general issue is that what is flat? or rather what exactly are we taxing the tax rates on? we'd agree that disposable income for a guy making close to minimal wage is nowhere the same as a wealthy person as a purpotion to his income, so a poor guy's 10 % might really impair his ability to survive but a rich guys' 10% may make almost no difference to him (marginal utility issues), so that makes the whole issue so much more complicated. and as long as we have some sort of deductable in there (like a minimum threshhold where you don't need to pay) then it's still not flat at all when it comes out, only a arbitrary flat rate.
And besides the point, if we're going to really go by the "fair" logic, the good ole medieval head tax (where everyone literrally pays the exactly same #) would be the most ... fair... right? afterall why should Bill Gates pay a million bucks just because he makes a billion.. he's still one man just like you. of course with this tax system you basically have to remove about 99% of government spending
And again we come to the more basic matter of the guys closer to the bottom would end up paying much more % of their income on basic consumptions, thus in effect imposing a regressive tax instead.
This is a complicated issue to be sure... at the end of the day the progressive tax rate is generally justified by the logic that the wealthier you are, the purportion of desposable income is going to be higher too.
One would need to give a thought here though, even after taking out the defense spending factor, the US in general is still spending a higher purportion of their GDP on the budget while it's social net system is not exactly European level either. so why? why is the budget in the US seem to be getting a dime for the dollar these days? yeah government is never going to be the most efficent thing ever, but there's still definately a (gigantic) difference between say.. the government efficency of Singapore then say... Greece.
And even defense budget wise, yes the US have the largest presence, but supposedly it should also have the advantage in production of scale, for example it is insanely unpractical for Taiwan here to build our own Submarines, since we would at best need about a dozen and more realistically more like 6-8 AND have no hope of selling them to anyone else. meanwhile the US have a standing fleet of 70+ subs and is planing on quiet a few more.
There must be some sort of streamlining potential in the US public sector that can retain most of it's use while cutting down the cost.
Last edited by RollingWave; 03-07-2012 at 03:09 AM.