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Viktyr Korimir's Tax Plan

Would You Support a Tax Plan Like This?


  • Total voters
    10
I'll have to disagree with you here, no so much as they may be seen as wrong, but I believe that immoral is too strong a level. teamosil has a valid point. I agree that inheritance taxes, and death taxes for that matter (they really are double taxation) should not exist. But I can't go as far as to call them immoral.

Honestly, I perceive them as a direct assault upon family values. It is the government directly interfering with and attempting to divide the basic functions of the family unit.

You are saying to further the example that if the base rate at the poverty line was 12% then they next brackets would be 18%, 24%, 30%, etc? Does your system allow for say 11.4%? Mathematically I am sure there would be a way to set the base rate so that the final bracket is 99%. Is this a good thing? Or just a thing?

Sure. You could set the base rate at 11.4%, and then the next bracket would be 17.1%, 22.8%, 28.%, etc. The problem with setting a base tax rate such that the maximum bracket is 99% is that the base tax rate can be adjusted by Congress at any time; I initially thought that a hard cap wasn't necessary because of the outlandish incomes necessary to reach 100% (essentially a maximum income), but I just can't support a system that imposes an income cap. The top marginal tax rate after WW2 was 91%, so I rounded it down to ninety.

The brackets themselves: If poverty line is $10k then the next brackets are $20K, $40K, $80K, $160K, etc?

Finally you still haven't explained about how the number of people in the household affect which tax bracket one is in.

Quick clarification needed. Why and how does your proposal encourage the wealthy to have more kids? I couldn't work that out.

The way the Federal poverty line is defined is by the number of people in the household. In 2011, the poverty line for an individual was $10,890, a family of four was $22,350, and a family of eight was $37,630. Each person in the household increases the poverty line by a little under $4,000, which is subject to the same doubling process as the regular tax brackets. There's a breakoff point-- which is too complicated for me to calculate-- at which having another child provides more of a discount on taxes than it costs to raise that child. This means another child that grows up with all of the clothing and school supplies and technological gadgetry expected from a member of his class and splitting the inheritance one more way when mommy and daddy pass on.

That's why I'm not worried about accumulated wealth; the tax system itself encourages people to break up their estates.
 
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The way the Federal poverty line is defined is by the number of people in the household. In 2011, the poverty line for an individual was $10,890, a family of four was $22,350, and a family of eight was $37,630. Each person in the household increases the poverty line by a little under $4,000, which is subject to the same doubling process as the regular tax brackets.
I see. Thanks. One question more, should having lots of children be seen as a route to greater wealth? Social engineering much?
 
I see. Thanks. One question more, should having lots of children be seen as a route to greater wealth? Social engineering much?

It's not "a route to greater wealth" is it's all money you earned in the first place. It isn't like the EITC that "rebates" people more money than they paid, or the welfare system that rewards people with more of the government's money-- the taxpayers' money-- for having more children. You have to earn the income in the first place for having children to save you money on taxes, and for having children to be profitable you have to earn enough money to support them properly.

And yes, you could say that it's a form of social engineering. I believe in social engineering, and as far as government social engineering goes, I think this is a fairly light touch.
 
Actually we were pretty much a third world country prior to the 16th amendment. For example, approximately 1 in 8 kids died before reaching 1 year of age- roughly twice as high as in Sierra Leone today, which currently has the highest infant mortality rate. The US's GDP was about 8% of the world GDP where now it is 22%.

That's not necessarily saying anything. What was the cause of the high mortality rate then compared to now? Where does medical science stand along that line? What is the comparison for inflation adjusted dollars for our rate of growth prior and after the 16th amendment? Given that the 16th amendment was followed almost immediately by the Great Depression does not exactly bode well, although I am one to note that causality is not necessarily the seemingly evident cause. There's a phase for that but I can't recall it at the moment. But that also follows that our increase in GDP growth over the last century vs the prior century is due to the 16th amendment and the collecting of income tax.



Not sure what you're getting at there. The poor, by definition, have very little wealth.
Yeah, gifts and inheritance are currently taxed at the same rate. Makes sense to me that should continue to be that way. But, somebody who is in poverty and gets $200 would only pay the very low rate for their bracket.

But gifts are not taxed unless you give over a certain amount. In other words, a given family can be given 100 gifts valuing $150 each by 100 individuals and the receiving family would never need to report that on their income taxes, and would never think to if the items were all materials items like TV, and DVD's and even basic cell phones (my trac phone only cost $20). And what about imputed income from charity? Any food, clothing, or other gifts are imputed income regardless of their source. Would you have that taxed as well? Do you tax grants?

BTW the annual gift tax exclusion currently is $13,000 per Donee(person receiving the gift) as per the IRS web site.

Sure. You could set the base rate at 11.4%, and then the next bracket would be 17.1%, 22.8%, 28.%, etc. The problem with setting a base tax rate such that the maximum bracket is 99% is that the base tax rate can be adjusted by Congress at any time; I initially thought that a hard cap wasn't necessary because of the outlandish incomes necessary to reach 100% (essentially a maximum income), but I just can't support a system that imposes an income cap. The top marginal tax rate after WW2 was 91%, so I rounded it down to ninety.

You had noted in creating a tax cap that the last bracket would be what ever percentage hit 90% or above. And I can agree with you that the ridiculous amount needed to get to 90% might warrant that rate, but I can never condone a 100% rate, regardless of how much the person makes because then the person would have no income. At that point the person's income would then drop to 0 because he wouldn't bother to work any more and just live off what he has. For that matter, at the level your plan would propose he wouldn't even need to live off interest. Place it all in an escrow account and pull out what's needed. Then that would be all that money not doing any real work in the system.
 
That's not necessarily saying anything. What was the cause of the high mortality rate then compared to now? Where does medical science stand along that line? What is the comparison for inflation adjusted dollars for our rate of growth prior and after the 16th amendment? Given that the 16th amendment was followed almost immediately by the Great Depression does not exactly bode well, although I am one to note that causality is not necessarily the seemingly evident cause. There's a phase for that but I can't recall it at the moment. But that also follows that our increase in GDP growth over the last century vs the prior century is due to the 16th amendment and the collecting of income tax.

Yeah, I'm not saying there is any causation. You had said that before the 16th we were pretty "gung ho". I don't think that's an accurate depiction at all. We were kind of floundering somewhere between second world and third world status at the time. Only 8% of the world's GDP. When we took off economically was after WWII.

But gifts are not taxed unless you give over a certain amount. In other words, a given family can be given 100 gifts valuing $150 each by 100 individuals and the receiving family would never need to report that on their income taxes, and would never think to if the items were all materials items like TV, and DVD's and even basic cell phones (my trac phone only cost $20). And what about imputed income from charity? Any food, clothing, or other gifts are imputed income regardless of their source. Would you have that taxed as well? Do you tax grants?

BTW the annual gift tax exclusion currently is $13,000 per Donee(person receiving the gift) as per the IRS web site.

Yeah that's right. You get a $13k/year exclusion for gift income and you get a $2.5 million exclusion for inheritance presently. Above that, you pay both on the same rate schedule. It's actually the same tax. I'm fine keeping the gift exclusion. That's peanuts and it would be a hassle to have to report $100 xmas presents and whatnot. The $2.5 million exclusion for inheritance is ludicrously high in my view though.
 
You had noted in creating a tax cap that the last bracket would be what ever percentage hit 90% or above. And I can agree with you that the ridiculous amount needed to get to 90% might warrant that rate, but I can never condone a 100% rate, regardless of how much the person makes because then the person would have no income. At that point the person's income would then drop to 0 because he wouldn't bother to work any more and just live off what he has. For that matter, at the level your plan would propose he wouldn't even need to live off interest. Place it all in an escrow account and pull out what's needed. Then that would be all that money not doing any real work in the system.

I believe you misunderstand the nature of the progressive income tax. Your tax bracket isn't the tax rate you pay on all income; you pay that percentage for all of the income within that tax bracket. So the first portion of money you earn, up to the poverty line, is untaxed. Then, the money you earn between 100% and 200% of the poverty line is taxed at the the base tax rate, the money between 200% and 400% is taxed at 1.5X the base tax rate, from 400% to 800% at 2X the base tax rate, and so forth. The 100% tax rate wouldn't mean that a person received no income, it would mean that they could no longer receive income above that amount.

Which I'm still opposed to, but not opposed enough that I was worried about it until a solution occurred to me.
 
On first look, I like it. It has two similar idea as some of my suggested tax plans had...tying all tax rates to a singular base number so that you can't lower or raise taxes on just one group, and making a sort of "bare minimum" line that doesn't get taxed and then everything over that begins the taxing. Very nicely worked up.
 
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