08-23-2012, 10:43 AM
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Senior Member
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Join Date: Aug 2010
Location: Metro Detroit
Posts: 13,016
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Quote:
Originally Posted by ebacon
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?
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So we don't get into a gotcha game, please define "effective tax rate" as you use it here. It is a phrase that means different things to different people, including the CBO. They've used it differently on a couple of occasions.
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