What do you think federal income tax rates should be?

[begin_within]

Corporate income tax rate: %
Personal income tax rates:
% on income above $
% on income above $
% on income above $
% on income above $

Fill in the blanks.

[Warpy]

1. Progressive and tied to the median wage

and confiscatory over $10,000,000/yr with a rate of 70% at $1,000,000yr.

The old progressive tax structure not only funded the government so that it worked for all of us, it also provided a wonderful disincentive to greed.

[rfranklin]

2. all income should be taxed as income....

that includes capital gains and inheritances. That way we could all pay lower taxes while replenishing the Treasury.

[SharonAnn]

3. Exactly. Whether its capital gains, distributions, etc. is irrelevent. It's income.

[bobbolink]

16. Social Security, Disability, child support, etc also?

Is this more libertarian "let them eat cake" stuff?

[RC]

21. Social Cecurity is already collected throught a tax.

It being a safety net should not be taxes again. If child support is taxed, then the amount being paid will go up to compensate.

[bobbolink]

30. You said EVERYTHING. You need to THINK.

There are OTHER PEOPLE besides you muddleclass people.

THINK.

This libertarian bullshit is literally KILLING people.

Does it matter?

And rather than THINK and understand what your proposals do to very real people who are already hurting, you willl attack me and defend yourself. Typical libertarian reaction.

THINK.

[cherokeeprogressive]

42. Do you have any idea how many Americans pay their bills and feed their families

with dollars that were collected as taxes? Every federal employee, every state employee, every member of the armed forces...

What do we do? Exempt all of them from paying taxes on dollars that were collected as taxes?

[Juche]

4. What they were under Reagan

with a 50% rate as the highest bracket. Sadly we've moved so far tot he right that Reagan's tax plan is more progressive than anything on the horizon with a democratic congress and president. Considering that almost all the economic growth int he last 30 years has gone to the top 1% they need higher taxes.

Check out the top rates from 1932-1981, it hovered in the 70-90% range.

http://www.truthandpolitics.org/top-rates.php

Scratch that. The rates should probably be higher than 50%, because a higher rate might disincentivize the wealthiest from concentrating wealth in their own hands (like they've done since 1980) since it'll be confiscated anyway. A 70% rate is probably a better idea.

[Igel]

34. They also had income averaging.

Not a trivial point, not at all.

There's a lot of turnover in those upper 5%. My parents were in a really high percentile one year, 95% or greater. The problem is that they were in it for one year: The year my father took a lump-sum retirement payment in lieu of a monthly check. To tax that at a high percentage would be to tax his monthly retirement at a high percentage.

Granted, under a really progressive income tax system that kind of disbursement simply wouldn't be considered. Then again, such a tax policy would simply make the payment of large amounts as income different, to avoid paying taxes. (There was a nifty bit of research that actually showed the net per capita amount paid by the top 5 or 10%, adjusted for inflation, was remarkably stable from the '40s to the early '00s, except for a couple of years after the tax structure changed. Takeaway lesson: If they think they're being soaked unfairly, they find ways to avoid the taxes; if the tax rates are relatively low, they consider them to be pretty fair and judge the hassle to avoid them excessive.)

More anecdotes? My wife and I were in the top 80% a few years back; we were in the bottom 25% the 10 years before that, and in maybe the 60% percentile since then. Income averaging would have been nice. When doing my taxes for that year I came very close to being socked by the AMT, so contacted my client about whether I could simply void some invoices retroactively and refund them their money back to avoid the mess. They, of course, said yes, but as it turns out I didn't need to.

I'd also note that my high school girlfriend's father actually turned down a promotion--he did the math, and would have paid more in taxes than he would receive in additional income. This was '75 or so.

[kiva]

5. Depends what the government is providing for the people.

If we had national health care, free college/university education, and a viable public transportation system throughout the country, I would be willing to pay half or more of my not huge salary for taxes. If it's going to prop up an illegal war and to give billions to banks (that they do not have to account for), then I'm not in such a generous mood.

[napi21]

6. I don't think the % is that important. I suggest reviewing ALL the

deduction loopholes that have been created over the years (mostly as favorable paybacks to someone or group).

I happen to think it would be a GREAT IDEA to scrap ALL OF THEM and then carefully review all the issues to jstify what new ones should be adopted.

It doesn't matter if ie: the corporate rate is 36% because after taking advantage of all the deductions available, MO COMPANY pays anything close to that! Many pay no income tax at all!

[SmileyRose]

7. 40% for corporations and investors // ZERO for individuals

Corporations have bought out the government. Individuals have not had federal representation for decades. It's time we stop being taxed (no taxation without representation) - If the billionaires who own 80% plus of all the stocks in corps want to run the damn world then let them pay for it.

Choice B is 23% total federal tax (includes all taxes on every source of income) on individuals only. No corporate taxes at all and take away all their rights to have any representation in government, no government help enforcing their interests around the globe, no right to own or sell property, no rights at all. Corporations are not persons. They should not get government representation.

[Myrina]

8. I'm not sure about those % but ...

... as a new homeowner I am seriously cranked that I have to choose between either the standard deduction (single, no kids) or itemizing.

Why can't property taxes, mortgage interest etc be itemized ANYWAY, as a way to encourage home ownership?
I coulda freakin' stayed in an apartment. :mad:

[Stinky The Clown]

9. I can only answer this conceptually. I have no clue what the percenatges ought to be ........

.... and neither does anyone else who might answer here.

At 200% (or some other number) of the poverty level and below - no taxes at all. If an employer is paying such wages, then the employer would not be obligated to withhold taxes.

From 200% to 400% (or some other number) of the poverty level, phase in taxes at a sliding scale that does NOT penalize one by getting raises that result in higher taxes that net the person into a losing situation.

Over 400% (or some other number) up to $200,000 per year in income some rate that approximates today's lowest tax bracket.

All wages between $200K and $1,000,000 get taxed at today's maximum rate. Above $1,000,000 in income tax them at 90%.

Oh yeah .... corporations -enforce the fucking laws and tax them heavily for excess profits. I'll leave it up to ***liberal*** money people to figure out what this means. I am not opposed to confiscatory rates for some of them.

Tax stock-based cap gains and all dividends are ordinary income.

Cap gains on one's primary residence never get taxed. Ever. No such benefit for second homes, vacation homes, boats, campers, etc.

[lazer47]

10. 10% gross straight accross the board for everyone,, 20% for corps.

[Stinky The Clown]

11. That's regressive

Flat Tax from Flat Earthers

[lazer47]

15. You state in an earlier post that quote "you have no Idea"

then how would you know that a flat tax would be regressive?? and why do I have to be a "flat earther" for beleiving in a fair tax for everyone?

[Stinky The Clown]

32. You're being disingenuous and that is *not* what I said

The "no clue' part of my earlier reply applied to the marginal rates everyone was proposing. it is that detail about which I have no clue. The rest of my reply spoke to the concept I favor.

I repeat what i said to you: Flat tax is regressive.

[ThomWV]

22. There is a way to make a nearly flat tax very progressive

It is the flat-earthers who simply can not understand a simple tax code devoid of loopholes that inevitably weaken the entire tax structure.

First off even in a flat system there needs to be some minimum level of income below which we do not tax, and that should be the same as our poverty level. Of course that requires an accurate measurement of what is and is not poverty but we can do that.

The next thing is it does indeed need to be progressively applied but that can be done over a short income range, and once again with no deductions for anything. Let us say taxation begins at Poverty level +$1 at 00.1% and then goes to whatever our "flat rate" will be in a straight line reaching the maximum at 200% of average income. So just to fill in the holes we'd be taxing families with $20k incomes 0.1% of their income and people making $100,000 at the maximum rate - for now lets call that 17% but it will change.

The next thing we need is honest estimates of two things, one the national income and the other is the national budget. Whatever the portion of the budget is to the projected income is the tax rate for the current session of Congress. Instant accountability. The next part is based on how the Federal Government sets the indirect cost rates for colleges and Universities.

When a college or university gets a federal contract or grant it is allowed indirect costs. The rates at which the costs are charged are negotiated by the Government for a several year period after auditors look at the institutions books for the upcoming period. The final rate is then adjusted upward to compensate for under billing in the earlier period or downward if the earlier estimate is found to have been too high. Our "flat rate' will get the same adjustment. If the preceding congress overspent then the rate for the next two years will be raised to compensate for the overspending, budget surpluses will result in a lower 'flat rate' for the upcoming 2 year period. Each Congress would be held accountable for the spending of the previous 2 years and taxpayers would see instantly what kind of job they are doing.

Because there is a very progressive lower end we aren't hurting the poor and because the rate is fixed with no deduction above a reasonable limit the rich can not avoid paying income tax too.

[Ikonoklast]

14. Works for me.

I'll dissolve my LLC and just declare by business a sole proprietorship and avoid paying the extra 10% in taxes.

I wouldn't be the only one doing it, either.



Ever notice that everyone pushing the 'flat tax' is a millionaire?

Funny dat.

[Seeking Serenity]

35. But then you'd lose your limited liability protection.

That's put your personal assets at risk to satisfy a business liability.

[Ikonoklast]

39. Assets? What assets?

I own practically nothing.

[Catshrink]

12. Payroll taxes are the most regressive -- remove the FICA cap!

[Greyhound]

13. First we can throw out the entire existing code, then define all income, regardless of source,

as income. Eliminate the "profit" loophole for corporations. Impose a transaction fee on all financial markets.

Then we can start the haggling over the progressive rate structure.

[BR_Parkway]

17. High enough that Freeper-mama's push those boys out of the basement

and make them get real jobs to help out. Besides interacting with the real world instead of their self reinforced fantasy one - the sunlight, fresh air and need to bathe more frequently would do them all a world of good.

[bobbolink]

18. Back to what it was in the 60s, before all the cuts for rich people.

It was sooo hard on rich people to pay high rates!

They couldn't afford mansions.

Or yachts.

Or private planes.

Oh wait.....

[AndyTiedye]

19. We Were Running a Nice Surplus With the Clinton-Era Tax Rates

[ThomWV]

28. And the country was doing great with Eisenhower tax rates too

[many a good man]

20. Depends on the goal. And what about deductions?

I think a primary goal should be reducing income inequality. Certainly a CEO or professional should earn more than a hamburger flipper but HOW MUCH more? 500 times more is certainly excessive and harmful to society.

We need to adequately compensate people who have had more training and more talent. It's all relative. What amount is conducive to creating the necessary incentives to invest more in one's professional development or reward risk taking? In Europe we have evidence that the economy functions well with much less inequality.

The tax code should have provisions for spreading out taxes paid on large incomes that occur only a few years in one's lifetime, like an inventor cashing in on a big invention or an entertainer or athlete. Taxes on this income could be based on a ten year average or something.

And what about deductions? The purpose for tax deductions is to create incentives for investing in social goals, like charity or home ownership, not tax evasion. How can we restructure the tax code to promote laudable goals such as investing in alternative energy and job creation?

This is a great topic for discussion and it's a shame we don't hear more of it.

[notesdev]

23. zero

The income tax is a ridiculous way to raise tax revenue, especially with a code as complicated as the one we have. Tax people on what they consume and you will have a by-definition, precisely calibrated, progressive tax structure. With an income tax you get people who can stack deductions until they need to pay nothing, then turn around and live a life of luxury.

[TWiley]

26. The mega wealthy consume a smaller % of their income

Therefore your proposal would put a greater burden on the poor.

[MadHound]

27. Bzzzt! Wrongo.

A sales tax is quite regressive, and penalizes those with lower incomes. For instance, everybody must eat, but those are wealthier are much more able to pay those taxes on food than those who are poor or middle income. Same with gas and other essentials.

Instead of doing away with a progressive income tax because you don't like the deductions, simply do away with the deductions:shrug:

[TechBear_Seattle]

24. First off, keep in mind how a progressive income tax is supposed to work

It is not an "income tax" so much as a tax on disposable income. You start by dividing your income into two piles. One pile covers those expenses which are necessary to live: basic food, rent or mortgage on a modest home, clothing, medical, etc. The second pile is the money available for other, non-necessary expenses; this is your disposable income and is the only amount that is taxed.

The "progressive" part comes by looking at the relative size of your two piles: the smaller your disposable income, the smaller the rate at which the disposable income is taxed, down to a zero rate. The larger your disposable income, the larger the rate at which it is taxed, up to a ceiling rate.

Everyone has a different economic situation, so the federal Tax Code is written to standardize the procedures outlined above. First, every filer is put in a particular category: single, single head of household, married, married filing separately, etc. Based on this category, the filer has an exemption, which sets your necessary expenses based on a national average. Everyone who files in a particular category will get the same base exemption: a married couple that makes $45,000 a year and one that makes $450,000 a year will both have the same base exemption.

The base exemption is then personalized by factoring in dependents, the interest paid on the mortgage of your primary residence, certain medical and educational costs, and other allowed costs. These, in effect, move money out of the disposable income pile and into the necessary expenses pile. Once all of this is tallied up, you can compare the relative size of your disposable and non-disposable income, and calculate your tax rate.

Assuming we keep this system of a progressive tax on disposable income, there are really three questions that must be asked: What is the ceiling tax rate? At what point does that ceiling tax rate kick in? And at what point does the zero tax rate kick in?

[TWiley]

25. Tax the Churches, and Tax the Republicans double

Both of these groups have taken for way too many years and given little or nothing in return. A Republican's biggest fear is that he will be forced to actually pay his own way for once.

[SheilaT]

29. What I hate is how complicated it all is.

I'm sick of paying serious money to someone to do my taxes. I also hate it that because I have some investments, mutual funds are structured so I wind up paying taxes on money that never passes through my hands, such as when the value of the fund is down, but somehow I owe taxes on capital gains.

Something simplified. With very few deductions.

[gollygee]

31. I like the idea of a flat-ish tax

Like, the first $30k you pay no tax.
The second $30k, you pay half the tax rate.
Anything over $60k, you pay the whole tax rate.

So someone who makes $25k pays nothing. Someone who makes $40k pays nothing on the first $30k, and then half the tax rate on the other $10k. Someone who makes $100k pays nothing on the first $30k, half the tax rate on the second $30k, and then the whole tax rate on the remaining $40k.

[SOS]

33. 0% under $40,000

People need that much just to survive.

[norepubsin08]

36. anybody making over 300K 40%

over 400K 45%
0ver 500K 50%
Over 600K 55%
Over 750K 60%
Over 1000K 65% and no deductions except for charitable donations and then only up 20% of income

[Telly Savalas]

37. Shouldn't all answers be accompanied by tables

showing projections of the amount of revenue generated by the tax rates and the expected amount of government spending? In the absence of this how can we see if the tax rates are adequate for fulfilling our needs? Isn't that the point?

[harun]

38. Depends on what direction Federal spending goes.

[roamer65]

40. 50% on incomes over 500k

No deductions.

[asksam]

41. Progressive and fair

$0 - $40,000 0%
$40K - $75K 15%
$75K - $150K 33%
$150K - $400K 45%
$400K - $1M 55%
$1 - $8M 75%
$8M + 100%