02 Jun 13
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Originally posted by EladarBig shocker here, but the basis for your Conservative view point is based on factually WRONG information. For each tax bracket only the amount you make OVER the amount is taxed at that rate.
I'd beg to differ. People who are close to a tax bracket difference will not take an opportunity to make more money because it means they'll get a lower amount of money on their pay check.
I remember one time I lost an assignment which would have paid me an extra $1k so I got a new pay stuff showing how much I'd be taking home on the next pay check. I en ...[text shortened]... hy and the woman in the office said that it is because it lowered me to the next tax bracket.
If the top rate is $250,000 and you make $250,001 - only ONE dollar is taxed at the highest rate.
02 Jun 13
Originally posted by sh76I'm quite sure those examples, if they exist, are few and far between. Obviously eldar wasn't referring to such a case.
You're right, of course, that a marginal dollar will not cost you more in income tax. But when you factor in eligibility for government benefits, it is very possible for a marginal dollar to cost you more than a dollar in income taxes [b]and loss of benefits. There are scenarios in which people are, in effect, punished for earning more money.[/b]
03 Jun 13
Originally posted by USArmyParatrooperIt's pretty amazing that Eladar, after being explained how tax brackets work at least a dozen times, still doesn't grasp the basic concept.
Big shocker here, but the basis for your Conservative view point is based on factually WRONG information. For each tax bracket only the amount you make OVER the amount is taxed at that rate.
If the top rate is $250,000 and you make $250,001 - only ONE dollar is taxed at the highest rate.
03 Jun 13
Originally posted by SleepyguyYou regard it as a "strange argument" that those who get the most benefit from something should pay the most for it?
It does not logically follow that because people pay their bills out of their income that their share of taxes should be determined by their income.
03 Jun 13
Originally posted by USArmyParatrooperThey're more frequent and have less space between than you'd think. Where I live, income-based government benefits (Medicaid, food stamps, Section 8, WIC, etc.) for a large family can be worth $75,000/year or more. I've had many clients who could afford a $2,000 legal fee to set up an insurance trust, but could not afford to get a salaried job.
I'm quite sure those examples, if they exist, are few and far between. Obviously eldar wasn't referring to such a case.
03 Jun 13
Originally posted by USArmyParatrooperPerhaps it was because I was making so little that I was also receiving earned income credit.
Big shocker here, but the basis for your Conservative view point is based on factually WRONG information. For each tax bracket only the amount you make OVER the amount is taxed at that rate.
If the top rate is $250,000 and you make $250,001 - only ONE dollar is taxed at the highest rate.
03 Jun 13
Originally posted by SleepyguyI don't know how other states do it, but in Oklahoma low income people are charged at a lower rate than the average consumer. If you are on the breaking point between rates, just a little bit more income could make a difference in your bill.
That's a new one. What a strange argument. Is your electric bill calculated based on the amount of your income?
03 Jun 13
Originally posted by no1marauderWhat I regard as a strange argument is the one found in the only sentence of yours that I quoted. You now seem to want to argue about something I didn't say, and in debating something which will likely bore us both. I was pointing out that the logic in that one sentence of yours is broken, and that it was a new one I hadn't heard before.
You regard it as a "strange argument" that those who get the most benefit from something should pay the most for it?
03 Jun 13
Originally posted by sh76A little nit-pick here...
You're right, of course, that a marginal dollar will not cost you more in income tax. But when you factor in eligibility for government benefits, it is very possible for a marginal dollar to cost you more than a dollar in income taxes [b]and loss of benefits. There are scenarios in which people are, in effect, punished for earning more money.[/b]
Tax tables up to a certain amount are done in $50 increments. So for example, if your taxable income is between $91000 and $91050, your tax (for a single) would be $18948. If you make between $91050 and $91100, your tax would be $18962. Apparently the marginal tax rate in that range is about 28%.
But, if you made $91049 in 2012, an additional $2 in income would cost you an additional $14 in income tax. Assuming rounding to the nearest dollar, if you made $91049.49 then just 2 more cents of income would have cost you $14 in taxes.
Certainly this phenomenon would not happen in withholding though, and no1 is basically right about that. Also, most benefits such as Earned Income Credit are phased out gradually so that usually you can't reduce your income by making more money. As complex as the tax code is, I'm sure there are scenarios such as you describe.
Originally posted by sh76When you take money away from a person for simply making money you are by definition punishing that person.
You're right, of course, that a marginal dollar will not cost you more in income tax. But when you factor in eligibility for government benefits, it is very possible for a marginal dollar to cost you more than a dollar in income taxes [b]and loss of benefits. There are scenarios in which people are, in effect, punished for earning more money.[/b]
Just look at the sports world. What is a very common way of punishing athletes? They get fined. The player has his money taken away.
Taxing income is not different than taking money away for a person for any other reason. It is still a punishment. It is still a fine.