Robert ReichAug 30, 2023
I refuse to tolerate a system that lets the 500 richest people add $852 billion to their wealth in the past six months alone, but doesn’t raise the $7.25 federal minimum wage for over a decade.
Show threadBob WymanAug 30, 2023

@rbreich Why are there only seven income tax brackets? Every single filer with over $539,900 of income pays the same rate but rates are progressive for the less fortunate.

We should have many more brackets. Those earning $1 million should pay higher rates than those earning $500k and those earning $10 million should pay even higher rates, etc. The top bracket should probably be between 75% and 95% but kick in after $10 million/year or at some level even higher.

https://taxfoundation.org/data/all/federal/2023-tax-brackets/#:~:text=There%20are%20seven%20federal%20income,for%20married%20couples%20filing%20jointly.

2023 Tax Brackets

The IRS recently released the new inflation adjusted 2023 tax brackets and rates. Explore updated credits, deductions, and exemptions, including the standard deduction & personal exemption, Alternative Minimum Tax (AMT), Earned Income Tax Credit (EITC), Child Tax Credit (CTC), capital gains brackets, qualified business income deduction (199A), and the annual exclusion for gifts.

Tax Foundation
Show threadSlightlyCyberpunkAug 30, 2023
@bobwyman @rbreich I did some rather basic analysis of different tax policies many years ago and one of my favorites was actually a "flat tax". Turns out a lot of proposals for that include an exemption which can turn them into an *incredibly* progressive system. So for example you'd do something like 60% income tax, no brackets, no deductions...but the first $50k of income is exempt. So if you earn less than 50k, you pay no tax. If you earn 100k, you pay 30%. If you make millions, you'll be up around 59.9%.
Show threadBob WymanAug 30, 2023

@[email protected] @rbreich A tax isn't "flat" if it includes deductions. Your proposal has the same failing that today's seven brackets do. It concentrates progressivity on the middle class but is essentially a flat tax on those with high or low incomes.

As income increases, the portion of income that comes from economic rent inevitably increases. Taxing economic rent is efficient and non-distortionary. We should tax economic rent.

We need progressivity at the high end, not in the mid-range.

Show threadSlightlyCyberpunk

@bobwyman @rbreich All very true, but it is certainly better than the existing brackets and more likely to be accepted by the right since it's their idea. If 60% ain't high enough just keep going. Try it at 100% with a 100k exemption lol

(When I looked into these previously I had a big spreadsheet with the most accurate income breakdowns I could find, so I was just plugging in different values to see what it would take to get similar overall income from taxes with a variety of different tax policies that i had seen proposed. This was in highschool though when I was a bit less exposed to proper ideologies so I don't think I tried anything like 100% tax on millionaires. Also it is -- or was -- very hard to find sufficiently granular income data at that level.)

Aug 30, 2023 at 8:01pmWeb
Show threadBob WymanAug 31, 2023

@admin @rbreich Your method seems focused only on raising sufficient revenue. Many people view the problem of tax policy in this way.

There is a view of the taxing problem that says we should be seeking a fair and reasonable allocation of taxes which reflects the different benefits of government enjoyed by taxpayers. Collecting enough money isn't enough. The tax system should also be fair.

One can be poor with little help from government, but being rich requires government as a partner.

Show threadSlightlyCyberpunkAug 31, 2023

@bobwyman @rbreich I certainly don't think taxes paid should be based on what people get from the government -- by that logic someone on food stamps should pay more taxes, and government employees should be in a higher tax bracket than private sector. I prefer the old "from each according to their ability; to each according to their need."

I do think that working with an income target is the only honest way to compare radically different tax policies though. Otherwise you need to propose not just the tax policy but also the entire federal budget to go with it (and probably include a comparison of how that same budget could be achieved under the current tax policy.) In these kinds of analysis it's generally best to ensure you only change one variable at a time. Taken in isolation, a tax policy where everyone just pays less is going ta be quite popular. Republicans were getting themselves elected on that (generally false) promise for decades. Everyone supports any way to lower taxes right up until it's time to pay the bills and you've gotta decide what gets cut.

Show threadBob WymanAug 31, 2023

@admin @rbreich Whenever the "Benefit Principle of Taxation" is mentioned, someone points out issues with taxing the very poor. But, it is rarely recognized that the income of the wealthy is just as, if not more, dependent on government as is that of the poor. One can be poor with or without government, but you can't be really rich without government support.

The government provides courts, infrastructure, defense, and much else which is necessary to enable and maintain high incomes and wealth.

Show threadSlightlyCyberpunkAug 31, 2023
@bobwyman @rbreich I don't doubt that if you're comparing a billionaire against someone in poverty...but what about two people in poverty but one has a chronic illness covered by medicaid? Should they have to pay more in taxes? Or even two middle class families with the same income but one works for the government -- do they pay more taxes? And when you start saying that tax rate should be tied to benefits received then you're implying that those who cannot pay the tax should not receive anything. That may not be your intention, but that's CERTAINLY how the opposition would interpret that statement. Which is why I much prefer "from each according to their ability; to each according to their need." Seems a lot harder to screw that one up lol