The American Federal Tax System: Fair?

[Esternial]

Right...so you'd choose to make less money overall why? Remember it's all just marginal rates, so you're losing half of the income you make above $500,000. This makes no sense.

So, hypothetically speaking, you're saying that losing more than half of my income would be trivial. I think not.

No, I definitely wouldn't work as hard knowing that I'd just be losing most of my money anyway. In fact, eventually I'd probably just move to a different country where the tax income rates weren't so ridiculously high.

That's pretty sad. You'd leave behind your entire life just because you have to pay more taxes on a relatively high income that would still leave you with a greater net income compared to someone who earns less, because everyone has to pay taxes anyway.

Ah well, at least I won't have to risk seeing you in Belgium.

[Atlanticatia]

High marginal tax rates also raise middle-class incomes, increase growth, and reduce wage inequality.

Why would a company board pay a CEO a $50 million salary if 70% of it will be going to taxes? Instead, they might invest in a new office building or maybe more spending on research. Or they will increase salaries of their middle-level and lower-level workers. It is true that high top tax rates can cause a small reduction in labor supply, but when you consider the positive effects, the effect is a net benefit to the economy.

[Sanctissima]

So, hypothetically speaking, you're saying that losing more than half of my income would be trivial. I think not.

No, I definitely wouldn't work as hard knowing that I'd just be losing most of my money anyway. In fact, eventually I'd probably just move to a different country where the tax income rates weren't so ridiculously high.

That's pretty sad. You'd leave behind your entire life just because you have to pay more taxes on a relatively high income that would still leave you with a greater net income compared to someone who earns less, because everyone has to pay taxes anyway.

I'm talking about if I was super-rich.

Like $20,000,000 annual-income rich.

Following the tax bracket as suggested, I'd be losing more than half of that to taxes. Thus, either one of two things would happen:

1) I'd stop working as hard as I used to, since I don't get to keep most of my income anyway.

2) I'd move on to greener pastures (i.e: find a new country to live in, preferably with a lower tax rate).

[British Home Counties]

It is not, no one said it is. But it's a nice sign of protest.

You said you supported it, so it's not exactly farfetched to assume you must've thought it was a good thing.

I don't consider the intentional extraction of wealth to be a sign of protest; rather, I consider it to be an exploitative, greedy pursuit.

I do support it. Your question was whether it is a good thing for the US, my answer was no, it is not. But it's a sign of protest that I support.

That they were too high and stifled growth.

That's counterfactual. The quarterly GDP growth in the US was quite high in the 50s and 60s. Growth was not stifled. By and large, the era was a time of economic expansionism.

Yes, after-war periods tend to be highly prosperous when all resources are employed, taking Reconstruction Era, Roaring Twenties and Great Society into account. But since Reconstruction Era and Roaring Twenties were Libertarian, it's Libertarianism 2 : 1 Keynesianism as far as I'm aware.

Give me a prosperous era that did not involve war profiteering.

[Sanctissima]

You said you supported it, so it's not exactly farfetched to assume you must've thought it was a good thing.

I don't consider the intentional extraction of wealth to be a sign of protest; rather, I consider it to be an exploitative, greedy pursuit.

I do support it. Your question was whether it is a good thing for the US, my answer was no, it is not. But it's a sign of protest that I support.

That's counterfactual. The quarterly GDP growth in the US was quite high in the 50s and 60s. Growth was not stifled. By and large, the era was a time of economic expansionism.

Yes, after-war periods tend to be highly prosperous when all resources are employed, taking Reconstruction Era, Roaring Twenties and Great Society into account. But since Reconstruction Era and Roaring Twenties were Libertarian, it's Libertarianism 2 : 1 Keynesianism as far as I'm aware.

Give me a prosperous era that did not involve war profiteering.

Just one problem: libertarianism didn't exist until like, the 1950's (and that's being generous). Elements of it existed much further back, but actual libertarianism is a fairly new political ideology.

[Arkotania]

High marginal tax rates also raise middle-class incomes, increase growth, and reduce wage inequality.

Why would a company board pay a CEO a $50 million salary if 70% of it will be going to taxes? Instead, they might invest in a new office building or maybe more spending on research. Or they will increase salaries of their middle-level and lower-level workers. It is true that high top tax rates can cause a small reduction in labor supply, but when you consider the positive effects, the effect is a net benefit to the economy.

Or move it out of the country perhaps?

I'd have to check up on corporations regarding this, but certainly some rich people do rely on off-shore accounts to avoid taxes rather than re-investing in some way to show as an expense(which they could do on top of having offshore accounts for even less in taxes)

[Neutraligon]

That's pretty sad. You'd leave behind your entire life just because you have to pay more taxes on a relatively high income that would still leave you with a greater net income compared to someone who earns less, because everyone has to pay taxes anyway.

I'm talking about if I was super-rich.

Like $20,000,000 annual-income rich.

Following the tax bracket as suggested, I'd be losing more than half of that to taxes. Thus, either one of two things would happen:

1) I'd stop working as hard as I used to, since I don't get to keep most of my income anyway.

2) I'd move on to greener pastures (i.e: find a new country to live in, preferably with a lower tax rate).

If the bracket is $406,751 for a single paying taxes at 39.6%
http://www.bankrate.com/finance/taxes/tax-brackets.aspx
any money you make at above that will be taxed at 39.6, each amount below will of course be taxed at the rate appropriate for that bracket.

So you would be taxed on the 19593249 at that rate. You would still be making far more than people at lower incomes. You would still make 11834322.40 on the part above the 406,751 mark.

[Esternial]

That's pretty sad. You'd leave behind your entire life just because you have to pay more taxes on a relatively high income that would still leave you with a greater net income compared to someone who earns less, because everyone has to pay taxes anyway.

I'm talking about if I was super-rich.

Like $20,000,000 annual-income rich.

Following the tax bracket as suggested, I'd be losing more than half of that to taxes. Thus, either one of two things would happen:

1) I'd stop working as hard as I used to, since I don't get to keep most of my income anyway.

2) I'd move on to greener pastures (i.e: find a new country to live in, preferably with a lower tax rate).

I doubt you'd get anywhere to earn such an amount of money in the first place if you have the work ethics of a teenager.

[Sanctissima]

I'm talking about if I was super-rich.

Like $20,000,000 annual-income rich.

Following the tax bracket as suggested, I'd be losing more than half of that to taxes. Thus, either one of two things would happen:

1) I'd stop working as hard as I used to, since I don't get to keep most of my income anyway.

2) I'd move on to greener pastures (i.e: find a new country to live in, preferably with a lower tax rate).

If the bracket is $406,751 for a single paying taxes at 39.6%
http://www.bankrate.com/finance/taxes/tax-brackets.aspx
any money you make at above that will be taxed at 39.6, each amount below will of course be taxed at the rate appropriate for that bracket.

So you would be taxed on the 19593249 at that rate. You would still be making far more than people at lower incomes. You would still make 11834322.40 on the part above the 406,751 mark.

The proposed tax rate was %55-65 for incomes higher than $1,000,000. That's well over half.

I would not be working hard just to lose half of my money to government-funded programs that don't benefit me in the slightest.

[Sanctissima]

I'm talking about if I was super-rich.

Like $20,000,000 annual-income rich.

Following the tax bracket as suggested, I'd be losing more than half of that to taxes. Thus, either one of two things would happen:

1) I'd stop working as hard as I used to, since I don't get to keep most of my income anyway.

2) I'd move on to greener pastures (i.e: find a new country to live in, preferably with a lower tax rate).

I doubt you'd get anywhere to earn such an amount of money in the first place if you have the work ethics of a teenager.

You'd be surprised.

Then again, most rich people who get screwed over by their government usually jump ship anyway. That's not exactly what I'd call a bad work ethic, it's just getting pissed about being screwed over.

[Arkotania]

I'm talking about if I was super-rich.

Like $20,000,000 annual-income rich.

Following the tax bracket as suggested, I'd be losing more than half of that to taxes. Thus, either one of two things would happen:

1) I'd stop working as hard as I used to, since I don't get to keep most of my income anyway.

2) I'd move on to greener pastures (i.e: find a new country to live in, preferably with a lower tax rate).

I doubt you'd get anywhere to earn such an amount of money in the first place if you have the work ethics of a teenager.

Unless you inherit the wealth, then hire people to do the work for you, and then hire someone to supervise the people you've hired.

[British Home Counties]

I do support it. Your question was whether it is a good thing for the US, my answer was no, it is not. But it's a sign of protest that I support.



Yes, after-war periods tend to be highly prosperous when all resources are employed, taking Reconstruction Era, Roaring Twenties and Great Society into account. But since Reconstruction Era and Roaring Twenties were Libertarian, it's Libertarianism 2 : 1 Keynesianism as far as I'm aware.

Give me a prosperous era that did not involve war profiteering.

Just one problem: libertarianism didn't exist until like, the 1950's (and that's being generous). Elements of it existed much further back, but actual libertarianism is a fairly new political ideology.

Libertarianism / Classical liberalism same thing. Libertarianism had to be established because the militant left-wingers took over "liberalism" and made it mean free healthcare for all, disestablish the military and care more about climate change than the economy. The same way homosexuals took over "gay" and no happy person will call themselves gay anymore.

[Sanctissima]

Just one problem: libertarianism didn't exist until like, the 1950's (and that's being generous). Elements of it existed much further back, but actual libertarianism is a fairly new political ideology.

Libertarianism / Classical liberalism same thing. Libertarianism had to be established because the militant left-wingers took over "liberalism" and made it mean free healthcare for all, disestablish the military and care more about climate change than the economy. The same way homosexuals took over "gay" and no happy person will call themselves gay anymore.

Ignoring most of the flawed portions of your post, and concentrating on one section:

Libertarianism had it's own 'foreign invader' takeover. Does the Tea Party movement ring a bell? Those people aren't exactly what I'd call actual libertarians. They're basically just rich folks who heard the "taxes are bad" idea and bandwagoned the political ideology.

[British Home Counties]

Libertarianism / Classical liberalism same thing. Libertarianism had to be established because the militant left-wingers took over "liberalism" and made it mean free healthcare for all, disestablish the military and care more about climate change than the economy. The same way homosexuals took over "gay" and no happy person will call themselves gay anymore.

Ignoring most of the flawed portions of your post, and concentrating on one section:

Libertarianism had it's own 'foreign invader' takeover. Does the Tea Party movement ring a bell? Those people aren't exactly what I'd call actual libertarians. They're basically just rich folks who heard the "taxes are bad" idea and bandwagoned the political ideology.

Think you'll find that Libertarianism involves a lot of personal liberty and freedom which can't be found under Tea Party's theocracy.

[Sanctissima]

Ignoring most of the flawed portions of your post, and concentrating on one section:

Libertarianism had it's own 'foreign invader' takeover. Does the Tea Party movement ring a bell? Those people aren't exactly what I'd call actual libertarians. They're basically just rich folks who heard the "taxes are bad" idea and bandwagoned the political ideology.

Think you'll find that Libertarianism involves a lot of personal liberty and freedom which can't be found under Tea Party's theocracy.

Oh, don't get me wrong, the actual ideology is fairly sound, although I largely disagree with it. I was just making a point.

[Esternial]

I doubt you'd get anywhere to earn such an amount of money in the first place if you have the work ethics of a teenager.

You'd be surprised.

Then again, most rich people who get screwed over by their government usually jump ship anyway. That's not exactly what I'd call a bad work ethic, it's just getting pissed about being screwed over.

Oh no, that's a different thing. It's called entitlement and possibly an overinflated sense of superiority over others.

Those people earn enough to consider themselves above contributing a portion of their wealth to society. I mean, the poors pay so little, anyway, so why should the rich pick up the slack?

[British Home Counties]

You'd be surprised.

Then again, most rich people who get screwed over by their government usually jump ship anyway. That's not exactly what I'd call a bad work ethic, it's just getting pissed about being screwed over.

Oh no, that's a different thing. It's called entitlement and possibly an overinflated sense of superiority over others.

Those people earn enough to consider themselves above contributing a portion of their wealth to society. I mean, the poors pay so little, anyway, so why should the rich pick up the slack?

So keeping your money is entitlement, but taking money is justice?

I find your reasoning hard to understand (?)

[Sanctissima]

You'd be surprised.

Then again, most rich people who get screwed over by their government usually jump ship anyway. That's not exactly what I'd call a bad work ethic, it's just getting pissed about being screwed over.

Oh no, that's a different thing. It's called entitlement and possibly an overinflated sense of superiority over others.

Those people earn enough to consider themselves above contributing a portion of their wealth to society. I mean, the poors pay so little, anyway, so why should the rich pick up the slack?

It's more than just a portion.

Look, I'm not arguing with you in principle.

I'm just saying that if one were to implement this sort of system, there would be backlash. Backlash which would essentially result in the entire corporate class, and thus the American economy, being considerably hampered. If you were to actually implement this sort of a tax rate (which would be hard enough to begin with) you'd need a back-up plan to deal with the inevitable economic fallout. Most of the people running a country's economy suddenly not running it is a problem, one which would need to be planned for.

[Esternial]

Oh no, that's a different thing. It's called entitlement and possibly an overinflated sense of superiority over others.

Those people earn enough to consider themselves above contributing a portion of their wealth to society. I mean, the poors pay so little, anyway, so why should the rich pick up the slack?

So keeping your money is entitlement, but taking money is justice?

I find your reasoning hard to understand (?)

I never once said keeping your money = entitlement. Nor that taking money = justice.

If you want to - in my opinion - "dumb thing down", that's your prerogative, but you're throwing away a lot of context in the progress, so I understand why you don't understand, since that's not my reasoning.

I personally view the overall well-being of society to have a higher priority than one person's luxury. Why? Because everyone is a part of society. You live in it, and if contributing a portion of your wealth to it will maintain that society and allow it to function properly - hell, perhaps even improve - then complaining about the fact you have to pay a greater fraction of you 100K income compared to someone making only 5K is entitlement.

Or simply put, the selfish and individualistic "mine mine mine mine mine" mentality that's being widely promoted nowadays, apparently makes some people forget they're still part of a bigger picture and should help maintain it. If you have more resources than others, you contribute more.

I dunno, maybe it's because people don't really know what gets done with their taxes or something. It makes me sad to see so many people put a greater value on hoarding as much of their personal wealth as possible than society. Co-operation is what made humanity grow to this proportion, and now suddenly people are beginning to (to an extent) turn their backs on one of the foundations of human society.

[Infected Mushroom]

Its unfair.

It has failed to achieve perfect equality.

Until that happens, it is unfair.

Until everyone makes the same thing, its unfair.

[Esternial]

Oh no, that's a different thing. It's called entitlement and possibly an overinflated sense of superiority over others.

Those people earn enough to consider themselves above contributing a portion of their wealth to society. I mean, the poors pay so little, anyway, so why should the rich pick up the slack?

It's more than just a portion.

Look, I'm not arguing with you in principle.

I'm just saying that if one were to implement this sort of system, there would be backlash. Backlash which would essentially result in the entire corporate class, and thus the American economy, being considerably hampered. If you were to actually implement this sort of a tax rate (which would be hard enough to begin with) you'd need a back-up plan to deal with the inevitable economic fallout. Most of the people running a country's economy suddenly not running it is a problem, one which would need to be planned for.

Oh most certainly. I doubt it's feasible. It's just a greater societal issue that, in my opinion, lies at the root of the problem here. It'd be swell if people were to change mentality.

A growing culture of individualism is great and all, but the problem therein lies that our planet isn't big enough for it. Instead of being cogs in a well-oiled machines, more and more people want their own factory and plot of land, even though there's simply not enough space for it. Lots of cogs leaving the mechanism make the entire machinery that supports society work that much less efficient.

So it'd be great if people developed their own individuality but kept it within bounds, realised they're still one person amongst a great number and contribute in order to allow other people to have that same freedom of equal (despite limited) individuality.

[Sanctissima]

It's more than just a portion.

Look, I'm not arguing with you in principle.

I'm just saying that if one were to implement this sort of system, there would be backlash. Backlash which would essentially result in the entire corporate class, and thus the American economy, being considerably hampered. If you were to actually implement this sort of a tax rate (which would be hard enough to begin with) you'd need a back-up plan to deal with the inevitable economic fallout. Most of the people running a country's economy suddenly not running it is a problem, one which would need to be planned for.

Oh most certainly. I doubt it's feasible. It's just a greater societal issue that, in my opinion, lies at the root of the problem here. It'd be swell if people were to change mentality.

A growing culture of individualism is great and all, but the problem therein lies that our planet isn't big enough for it. Instead of being cogs in a well-oiled machines, more and more people want their own factory and plot of land, even though there's simply not enough space for it. Lots of cogs leaving the mechanism make the entire machinery that supports society work that much less efficient.

So it'd be great if people developed their own individuality but kept it within bounds, realised they're still one person amongst a great number and contribute in order to allow other people to have that same freedom of equal (despite limited) individuality.

True, but I don't think that individualism is something terribly new. I mean, just look at Europe during the Middle Ages. That was the climax of individual nobles clawing out their own castles and plots of land. Sure, for the bulk of the population, individualism wasn't really an issue (since they were entirely dependent on the group), but individual greed still goes way back.

What we need, at the end of the day, is to find a balance between individual and societal development. Only then do I think that we'd truly be able to move forward as a species.

[Romalae]

That's counterfactual. The quarterly GDP growth in the US was quite high in the 50s and 60s. Growth was not stifled. By and large, the era was a time of economic expansionism.

Yes, after-war periods tend to be highly prosperous when all resources are employed, taking Reconstruction Era, Roaring Twenties and Great Society into account. But since Reconstruction Era and Roaring Twenties were Libertarian, it's Libertarianism 2 : 1 Keynesianism as far as I'm aware.

Give me a prosperous era that did not involve war profiteering.

You're backtracking here. You told me that economic growth was stifled as a result of the 50s/60s era top marginal tax rates, I demonstrated that this was counterfactual, then you returned by admitting that it was a prosperous time.

First of all, it wasn't "highly prosperous" as you say. It was by and large a time of economic expansionism, as I said, but there were several recessions/downturns in the 50s and early 60s, and several more major ones would eventually occur in the 70s. "Highly prosperous" is a bit of a mischaracterization, because economic growth was "relatively stale" and the overall economy "did not experience any major problems or breakthroughs" in the 1950s. Point is, the period was characterized by stable but slow economic growth, which can be attributed to a variety of causes.

Second, the modern vernacular definition of American "Libertarianism" did not exist at the time of the Reconstruction or Roaring Twenties. It didn't really begin to coalesce as an ideology until the latter half of the 20th century, particularly in the 1970s, and I would argue didn't receive mainstream use until the 80s and 90s. Regardless, though, can you substantiate your claim that these eras reflected Libertarianism?

Third, war profiteering is not the only condition responsible for a prosperous economic era. Even prosperous eras induced by post-war expansionism cannot solely be attributed to war profiteering. Economics doesn't work that way. It's easy and simple to create a narrative in which you assign one single cause to a particular result, but the reality is usually far more complex than that. Agricultural productivity associated with the Green Revolution and technological development like the mainstreaming of TVs, appliances, and commercial airliners were also major contributors. Anyway, check out these periods of economic expansion in the US in the modern era.

[Mushet]

Just one problem: libertarianism didn't exist until like, the 1950's (and that's being generous). Elements of it existed much further back, but actual libertarianism is a fairly new political ideology.

Libertarianism / Classical liberalism same thing. Libertarianism had to be established because the militant left-wingers took over "liberalism" and made it mean free healthcare for all, disestablish the military and care more about climate change than the economy. The same way homosexuals took over "gay" and no happy person will call themselves gay anymore.

No they really aren't, some liberals started just calling themselves Libertarians in the United States for some bullshit reason, it could be because they thought that "militant left wingers" were taking over their word, yeah that is some delusional bullshit come to think of it, could be. But libertarianism was really started by the left, earliest political uses of the word speak more about Anarchism than anything else.