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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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