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[–] Entomo 1 point 6 points (+7|-1) ago 

You apply that high income tax rate on all money earned over some high dollar figure. Simplified version:

Adjusted Gross Income range Rate
0 - 25,000 5%
25,001 - 100,000 15%
100,001 - 500,000 50%
500,001 90%

If I make $25,000 per year, I pay 25,000 * 0.05, or $1,250 per year.

If I make $50,000 per year, I pay 5% on the first $25,000 and 15% on the amount above $25,000 ($3,750) so my total tax bill would be $1,250 + $3,750 = $5,000. Note I would NOT pay 15% on all $50,000 - only the amount over $25,000.

So someone making $500,000 a year would pay <does math/> $212,500. Someone making $1,000,000 a year would pay $90% of the amount over $500,000 ($400,000) for a total of $662,500.

Note that the above is applied only after all deductions, etc. Rich people are really, really good at finding loopholes in the tax code so figure they're hiding half. If that assumption is true, $2,000,000 in income results in $662,500 in taxes, or an effective tax rate of 33%, despite the OMG I'M PAYING 90% YOU'RE KILLING ALL THE JOBS hysteria which would ensue if this ever came up in Congress.

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[–] jamesed 0 points 2 points (+2|-0) ago 

I'm sorry that is not how taxes work in the United States. That is generally how taxes work in Europe. On the tax forms in this country your tax is figured on your adjusted gross income. So if you have an adjusted gross income of $500,001 and you pay a 90% tax marginal Tax rate, then you are paying $450,000 in taxes leaving you a disposable income of only $50,000 and small change, or about the same amount as the guy making $100,000.

And as for JOBS. Remember Carter (president in name only) and his 10% surtax on luxury Items. The 10% tax was levied against Automobiles in excess of $30,000, boats in excess of $100,000, aircraft in excess of $250,000, furs and Jewelry in excess of $10,000. The tax was supposed to generate 9 billion dollars for the general fund. Well it was repealed after 2 years, (Luxury car tax lasted until 2005.) There was also the negative impact as the loss of jobs due to the reduced sales of Boats, and Aircraft as well as the equipment that went into the boats and aircraft, you know instruments, radios, radars, auto pilots, engines, safety equipment, also the maintenance personnel needed to maintain the big brutes as well as docking and parking fees cost over 45,000 jobs. These were generally considered good paying jobs with an average tax generation of $3000 for each job. So you you do the math 45,000 times $3000 was over $135,000,000 loss in taxes. We won't even get into the loss of social security, or the state and local taxes that went away. No wonder congress got smart after 2 years and scrapped the whole dammed thing.

Now you know why Socialist countries are generally economic basket cases where you can't even find toilet paper. Or as M.T. (Margret Thacher) said; "Socialism is a very fine form of government, Until you run out of other peoples money."

JD

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[–] TheCompanionCube 0 points 5 points (+5|-0) ago 

This post is wrong. Being in a certain tax bracket does not mean your entire income is taxed at that percentage.

http://www.irs.com/articles/income-tax

http://www.bankrate.com/finance/taxes/tax-brackets.aspx

" For example, if you move from the 25% tax bracket to the 28% tax bracket, you may think that all of your income is taxed at that higher rate. However, only the money that you earn within the 28% bracket is taxed at that rate. "

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[–] Entomo ago 

Further evidence you are incorrect. Tax tables for 2014. Note the absence of any jump in "taxes due" which would result in ALL of your AGI suddenly being taxed at a higher rate. Also note on page 88, the actual formulas for people who's AGI is over $100k.

I hope you haven't turned down any overtime because of your belief that earning more would mean you actually got less in take home pay if you passed some threshold in income.

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[–] Racer_the_observer ago 

Growth and prosperity in the USA was highest when taxes on the rich were highest. The rich have now turned things around.