The Laffer Curve
You guys know the Laffer curve. It is the one that shows that as taxes go up the incentive to earn goes down. It's not rocket science. In fact it's the point of having a progressive income tax structure.
Question for the Republicans on the board. Do you understand how a progressive income tax structure works? For example suppose the following structure: Income--Tax rate Up to 20,000 -- 10% 20,001-50,000 -- 20% 50,001-100,000 -- 30% 100,000-1,000,000 -- 40% Over 1,000,0001 -- 50% Suppose a person has $20,000 of taxable income. How much tax does he pay and what is his effective tax rate? Suppose a person has $20,001 of taxable income. How much tax does he pay and what is his effective tax rate? Suppose a person has $125,000 of taxable income. How much tax does he pay and what is his effective tax rate? |
Conservatives don't do math. It's too much like science.;)
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The first one $2000. or 10%
The second one $2,000.20 or 10.0005% (with rounding) The third: $2,000 + $6,000 + $15,000 + $10,000 = $33,000. That's $26.4%, or a considerably higher rate than the GOP candidates. That is, assuming I got my pluses and minuses and guzintas right. Actually, one can't really answer the question concerning the effective tax rate without knowing what is subtracted from total income to get to the taxable income. Also, I assume that this doesn't include the 4.2% (temporarily reduced from 6.2%) FICA tax that wage earners pay on the first $100K or so of income. Unlike the other incidences of determining taxable income, this is paid from dollar 1. Oh, and then we're talking about taxable income, are we talking about passive income or earned income. Then we're changing the effective rate again. Of course, that's how Mitt paid 13%. Regards, D-Ray |
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Are you a Republican? |
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One example of a CBO definition of "effective tax rate":
"Effective tax rates are calculated by dividing taxes by comprehensive household income," where comprehensive household income "equals pretax cash income plus income from other sources. Pretax cash income is the sum of wages, salaries, self-employment income, rents, taxable and nontaxable interest, dividends, realized capital gains, cash transfer payments, and retirement benefits plus taxes paid by businesses (corporate income taxes and the employer's share of Social Security, Medicare, and federal unemployment insurance payroll taxes) and employer contributions to 401(k) retirement plans. Other sources of income include all in-kind benefits (Medicare, Medicaid, employer-paid health insurance premiums, food stamps, school lunches and breakfasts, housing assistance, and energy assistance). Households with negative income are excluded from the lowest income category but are included in totals." This CBO definition includes in income many items, such as employer share of Social Security tax, not considered income for most purposes. " |
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I don't play gotcha. That's a game the f*cksticks on teevee and radidio play. |
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Actually I was registered as a republican for a few months in 1980. I went to the caucuses to vote for John Anderson and try to stop Reagan. Regards, D-Ray |
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John |
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