Why do the tax brackets end at ~600k?

[LMS5400]

Under the current tax code you me and pretty much everyone except the 1% 'ers bare the full burden of the tax brackets.

10% $0 $0 $0
12% $9,700 $19,400 $13,850
22% $39,475 $78,950 $52,850
24% $84,200 $168,400 $84,200
32% $160,725 $321,450 $160,700
35% $204,100 $408,200 $204,100
37% $510,300 $612,350 $510,300

But what happens after 612,350? That's just it! It a break for the super rich.

Lets face it, we drive mustangs not mclarens, but if we had a tax system that didn't cap out like this, and linearly increased the % of tax owed as a function of the the income doubling, then heath care would be paid from by this 0.5% group alone.

The creative spirit is dying for most of us and I think we're too focused on having a job and not looking at the bigger picture. Are we happy? Are we doing what we love? Do we have opportunities in this country to follow our dreams? Something as simple as a heath care system would allow people to take that chance, but cooperate American, that pays for many politicians, would rather have us in the rat race and tell you "jobs jobs jobs." Trump being no exception here.

What do people think about this tax system?






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[2018OFPP1?2]

Sounds to me like you're a young guy who doesn't have a huge income. Yet.

As you get older, and make more, your opinion about how much you should pay will change.

A quick search says the top 20% of tax payers pay nearly 70% of the income taxes collected, while the bottom 20% pay just 0.4%. Seems more than equitable to me.

The real problem with our system is that our government is too big, and wastes too much money on things like raises and lifetime medical benefits for themselves.

 

[LMS5400]

Well, then why do the top 10% of people own 76% of the wealth? There is clearly a gap and its in fact growing and has been for decades. If you don't like big government, I understand, lets just take the simple model and call the taxes a pie. Its going to be some aggregated number we all pay into. Maybe its less one year or more the next. But we all pay to make the pie whole. How about the rich pay more? And I don't mean the people who make 200k or 300k rich, I mean the 200 or 300 million per year rich.

So answer my question. Why do people in this current tax code who make more than 612k get a flat tax rate on everything they make there after? Do you make over 612k? If we just let the brackets continue, then those folks pay more, and the rest of us (99.5%) pay less. the lower brackets could have reduced rates. Bingo!

How do you like the PP2? I'm thinking about getting 1.

 

[2018OFPP1?2]

Well, then why do the top 10% of people own 76% of the wealth? There is clearly a gap and its in fact growing and has been for decades. If you don't like big government, I understand, lets just take the simple model and call the taxes a pie. Its going to be some aggregated number we all pay into. Maybe its less one year or more the next. But we all pay to make the pie whole. How about the rich pay more? And I don't mean the people who make 200k or 300k rich, I mean the 200 or 300 million per year rich.

So answer my question. Why do people in this current tax code who make more than 612k get a flat tax rate on everything they make there after? Do you make over 612k? If we just let the brackets continue, then those folks pay more, and the rest of us (99.5%) pay less. the lower brackets could have reduced rates. Bingo!

How do you like the PP2? I'm thinking about getting 1.

Personally, I'd be more in favor of eliminating the nightmare that is the IRS tax code, and adopt a flat tax with no exemptions, and no deductions. Everyone pays the same. That's fair. Everyone should enjoy exactly what they have earned.

Entitlements only create entitled people, and, well, that doesn't seem to be working out so well for our society.

I highly recommend the PP2 if you enjoy a performance focused car, and understand it comes with some trade-offs.

 

[LMS5400]

Personally, I'd be more in favor of eliminating the nightmare that is the IRS tax code, and adopt a flat tax with no exemptions, and no deductions. Everyone pays the same. That's fair. Everyone should enjoy exactly what they have earned.

Entitlements only create entitled people, and, well, that doesn't seem to be working out so well for our society.

I highly recommend the PP2 if you enjoy a performance focused car, and understand it comes with some trade-offs.

You have a point, but i think in practice the income levels are so diverse in this country a flat tax would really hurt the poor. I mean the tax would have to be 20% or 25% to even come close to what the government makes and that would be way higher than the poor pay now. And they already cant save anything -- shit costs too much as it is!

 

[Timeless]

Under the current tax code you me and pretty much everyone except the 1% 'ers bare the full burden of the tax brackets.

10% $0 $0 $0
12% $9,700 $19,400 $13,850
22% $39,475 $78,950 $52,850
24% $84,200 $168,400 $84,200
32% $160,725 $321,450 $160,700
35% $204,100 $408,200 $204,100
37% $510,300 $612,350 $510,300

So what is your suggestion? Continue the percentage all the way up to what? 100% at 100 million?

Keep in mind that the money you tax goes to the government which we all know does a terrible job with expenditures and waste along with being decided upon by people with sub 20% approval ratings at best. This will also move these super rich individuals to put their money in tax shelters/loopholes. Hell they can create their own non profit and keep control.

This keeps the money out of the individual who has innovated and worked hard and will most likely take that money and re-invest in something that does a much better job at creating more wealth, jobs, etc.

I agree with many that a flat tax is most fair along with removing tax shelters/loopholes.

 

[LMS5400]

So what is your suggestion? Continue the percentage all the way up to what? 100% at 100 million?

Keep in mind that the money you tax goes to the government which we all know does a terrible job with expenditures and waste along with being decided upon by people with sub 20% approval ratings at best. This will also move these super rich individuals to put their money in tax shelters/loopholes. Hell they can create their own non profit and keep control.

This keeps the money out of the individual who has innovated and worked hard and will most likely take that money and re-invest in something that does a much better job at creating more wealth, jobs, etc.

I agree with many that a flat tax is most fair along with removing tax shelters/loopholes.

The progress tax rate should go up to 99.999% as you approach the GDP of the entire country. Its purely hypothetical but it should be a function with a curve, not brackets at all.

First, I get you feel that "the government does a terrible job with expenditures." Think of it like a pie. We are gonna pay one way or another and make the pie whole. I'm suggesting if we ran the brackets up to no limit, you, me and pretty much everyone not making a million dollars a year would pay less. This is for lower taxes on the 99% and this is my point. Would you pay more of less with your flat tax model assuming we have to fill the pie? Are you sure? I promise you, your flat tax model would have you paying more than my progressive tax model unless you make about 1 million a year. You want less government and lower taxes FINE., This still works, you just slide the graph lower and we all get cuts, but what I'm saying is the progressive system should not end at 612k. I don't make 1 million a year, but if i did I would be okay paying a bit more for that 600k to 1000k chunk.


Just think about the fact the the most wealthy 3 people own more than the lower 50% of the population in the USA. I get we're not in that 50% group, but the country is really failing a lot of people.

 

[tom_sprecher]

The Government has a spending problem. If you taxed the top 10% at a 100% rate, you would only cover the annual deficit.

As inept as Congress and Trump may seem at times, they are pretty smart when it comes to borrowing money to cover the deficit. Treasuries are at historical lows. Central banks with negative rates are even smarter. People are paying them to lend them money.

 

[LMS5400]

The Government has a spending problem. If you taxed the top 10% at a 100% rate, you would only cover the annual deficit.

As inept as Congress and Trump may seem at times, they are pretty smart when it comes to borrowing money to cover the deficit. Treasuries are at historical lows. Central banks with negative rates are even smarter. People are paying them to lend them money.

okay, but I'm not asking how to solve the decidit problem. I'm asking how solve the economic inequality problem. :\

Lets face it, the dollar does not go as far as it did 20 years ago because standard of living is outpacing pay and has been for some time.

 

[BlackandBlue]

Rich people pay capital gains. They are not dumb enough to be wage earners. The tax code is complicated by design. It’s not a flaw.



I contend that for a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle.”

― Winston S. Churchill

 

[tom_sprecher]

okay, but I'm not asking how to solve the decidit problem. I'm asking how solve the economic inequality problem. :\

Lets face it, the dollar does not go as far as it did 20 years ago because standard of living is outpacing pay and has been for some time.

I'm sorry, but I did not read where you mentioned income inequality. You did mention raising the tax rate on the rich. OK then, to what end? Taxing the rich does not reduce income inequality in and by itself. Historically speaking income inequality is not nearly as bad as it was 100 years ago.

The way the system is set up today, the only way out is to spend less, save more, and invest wisely to elevate yourself into the shareholder class.

 

[LMS5400]

I'm sorry, but I did not read where you mentioned income inequality. You did mention raising the tax rate on the rich. OK then, to what end? Taxing the rich does not reduce income inequality in and by itself. Historically speaking income inequality is not nearly as bad as it was 100 years ago.

The way the system is set up today, the only way out is to spend less, save more, and invest wisely to elevate yourself into the shareholder class.

100 years ago? It's not better than it was 40 years ago!

Sure, saving is great advice for anyone if they can even save. Many can't. You're providing upper middle class solutions to everyone? I just want to know why people that make 612k a year stop paying more taxes. Are we saying when you get super rich, you deserve a break on the progressive taxes? If thats the answer, let's admit it! Because if we didn't stop the brackets, I'm asserting, 99.5% of us would pay less. You get 2 choices here, you either make over 612k a year (awesome for you) or you're cool paying more in taxes and giving the super wealthy a break by which this graph shows the results of that break.

Before 1970 we taxed the rich a lot more. Is this the best graph for America? This is not a left vs right thing, this is a mustang vs mclaren thing.

 

[2018OFPP1?2]

The progress tax rate should go up to 99.999% as you approach the GDP of the entire country. Its purely hypothetical but it should be a function with a curve, not brackets at all.

First, I get you feel that "the government does a terrible job with expenditures." Think of it like a pie. We are gonna pay one way or another and make the pie whole. I'm suggesting if we ran the brackets up to no limit, you, me and pretty much everyone not making a million dollars a year would pay less. This is for lower taxes on the 99% and this is my point. Would you pay more of less with your flat tax model assuming we have to fill the pie? Are you sure? I promise you, your flat tax model would have you paying more than my progressive tax model unless you make about 1 million a year. You want less government and lower taxes FINE., This still works, you just slide the graph lower and we all get cuts, but what I'm saying is the progressive system should not end at 612k. I don't make 1 million a year, but if i did I would be okay paying a bit more for that 600k to 1000k chunk.


Just think about the fact the the most wealthy 3 people own more than the lower 50% of the population in the USA. I get we're not in that 50% group, but the country is really failing a lot of people.

And you, me, and the bottom 50% paying a few thousand less a year in taxes is going to elevate us into the 1%? I'd like to understand how that works?

If the bottom 50% paid no taxes at all they'd still be well below the median. You can't fix individual wealth by changing the income tax system.

 

[BlackandBlue]

100 years ago? It's not better than it was 40 years ago!

Sure, saving is great advice for anyone if they can even save. Many can't. You're providing upper middle class solutions to everyone? I just want to know why people that make 612k a year stop paying more taxes. Are we saying when you get super rich, you deserve a break on the progressive taxes? If thats the answer, let's admit it! Because if we didn't stop the brackets, I'm asserting, 99.5% of us would pay less. You get 2 choices here, you either make over 612k a year (awesome for you) or you're cool paying more in taxes and giving the super wealthy a break by which this graph shows the results of that break.

Before 1970 we taxed the rich a lot more. Is this the best graph for America? This is not a left vs right thing, this is a mustang vs mclaren thing.

Most people don’t understand the complexities of the financial system. The system was built by the rich for the rich.

If you truly want to understand income inequality look up Brent Woods and read specifically about the Nixon Shock. That was 1971. That’s where the divergence in incomes started. It has only been getting worst since.

Thinking taxes will ever make a country more wealth or a better place to live is pure craziness.

Edit: The federal reserve just cut interest rate at the top of everything. It’s was not a cut to help the people. It was a cut to help the rich. And don’t get me started on inflation. That’s a tax in itself.

 

[Hack]

Income tax is unethical in my opinion. It's nobody's business how much money other people make.

If you are going to have an evil, unethical tax like income tax, everyone should pay the same amount. Not the same percentage, the same amount. If you want to have people pay more when they earn more, those people paying more should get additional votes. If someone pays 3x what you do and you get 1 vote, they should get 3 votes.

The better solution is that the only tax allowed should all be sales tax. Raise up sales tax. Then people who have a lot of money and buy a lot will pay a lot of tax. Those that don't buy anything don't pay any tax.

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