What should the highest income tax bracket rate be?

[crypto-fascist superhero]

Um, TJ.  The income tax rates are structured such that the first $8,500 in income is taxed at 10%, then the income after that up to $34,500 is taxed at 15%, then the income up to $83,600 is taxed at 25%, and so on.  It's a continuous line.  I admire the sentiment though.

[TJ in Wisco]

Dang! I did all that for nothing then.

Well, in any event that makes it even more unnecessarily complex, though less ridiculous.

Edit: The graphs should be correct now.

[Link]

A progressive system with rates between 1 and 100%.

We should look to the obvious lesson of history for the ideal top rate - 70%, speaking very conservatively.  Though I would have no objection to 90%

Progressive income tax, with rates going from 0% to 90% (maybe 100% for the most insane incomes). Of course that's not gonna happen in my lifetime.

90 and 100% tax rates?!  Why don't you just throw them in jail while you are at it?  50% is the upper limit of what is reasonable.  If the country can't meet its obligations by confiscating 50% of people's income over say 5 million dollars a year it deserves to go bankrupt.

[Insula Dei]

It's not in as much about the state's obligations, as about the people's needs, you know.

[RIP Robert H Bork]

Ideally, no income tax, although I realize that that's currently impossible.

As I've said before, I'd never accept a rate (flat or progressive) higher than 50% for anyone.

Also:

90 and 100% tax rates?!  Why don't you just throw them in jail while you are at it?  50% is the upper limit of what is reasonable.  If the country can't meet its obligations by confiscating 50% of people's income over say 5 million dollars a year it deserves to go bankrupt.

AMEN!

[phk]

You get big deadweight loss problems with tax rates north of 40%.

It's better to have a lot of smaller taxes. VAT, Sales, SS, Income, Sin, etc than to have a single high tax.

[white trash heroes]

You get big deadweight loss problems with tax rates north of 40%.

It's better to have a lot of smaller taxes. VAT, Sales, SS, Income, Sin, etc than to have a single high tax.

[realisticidealist]

You get big deadweight loss problems with tax rates north of 40%.

Why is that in particular?

[Gustaf]

I think economic research tends to point to rates above 50% or so being rather pointless, in the sense that they actually lose the government revenue. The only real point of them is to make people feel better.

So I'd go for a progressive system with the highest rates somewhere around 50%.

I think the problem with continuous functions that people are proposing here might be that it becomes hard for people to understand both the policy debate on taxation and their own budget decisions. 

[phk]

You get big deadweight loss problems with tax rates north of 40%.

Why is that in particular?

Because, it's kind of a mathematical identity, but deadweight loss increases at a rate of (taxation)^2.

Though I should rephrase, DWL wont occur, more likely the case you'll get evasion.

[Is JCL in mushy sappy love]

Consumption tax only. Though taxes are a needed thing for the running of government. Taxing savings is wrong, taxing capital gains is wrong, income tax is wrong. The only fair taxing policy is a consumption tax. The 16th amendments ratification was at best dubious and at worst political usurpation by the cabal that formed the current "national bank" Aka the Federal Reserve.

[Ѕenator Αverroës]

Taxing savings is wrong, taxing capital gains is wrong, income tax is wrong. The only fair taxing policy is a consumption tax.

1) What do you mean by "wrong"?

2) Why, in your view, are these forms of taxation wrong and unfair?

3) What makes consumption tax different from other taxes? Why is it a better source of government revenue? Why isn't it also wrong?

[Frodo]

Generally prefer a progressive income tax system with the top bracket set at 40%.   

[Nichlemn]

If we're going to have a progressive tax structure, I say we eliminate the bracket system and replace it with a continuous function to determine the rate. I don't think having piecewise discontinuities is a good idea and creates unnecessary distortions, especially when we could just as easily use some other kind of function.

I've always thought about doing that, but I don't know what the exact effects would be, if any.

People need to use calculus to find out how much tax they owe.

[Ѕenator Αverroës]

People need to use calculus to find out how much tax they owe.

Or they could use a computer program to calculate exactly how much they owe while using a chart to follow along more generally.

[Progressive Realist]

Besides, if you put this sort of thing to an explicit vote, as mentioned above, I suspect we will see that most people want a low tax society, and therefore lower government spending than currently.

Only in the US, where people have been brainwashed by the anti-State propaganda for decades.

Also, LOL at the idea that "low taxes=low government spending." Have some of us learned nothing from Reagan and GW Bush?

[crypto-fascist superhero]

Besides, if you put this sort of thing to an explicit vote, as mentioned above, I suspect we will see that most people want a low tax society, and therefore lower government spending than currently.

Only in the US, where people have been brainwashed by the anti-State propaganda for decades.

Also, LOL at the idea that "low taxes=low government spending." Have some of us learned nothing from Reagan and GW Bush?

Ah yes, what low taxes those were!!!

[TJ in Wisco]

If we're going to have a progressive tax structure, I say we eliminate the bracket system and replace it with a continuous function to determine the rate. I don't think having piecewise discontinuities is a good idea and creates unnecessary distortions, especially when we could just as easily use some other kind of function.

I've always thought about doing that, but I don't know what the exact effects would be, if any.

People need to use calculus to find out how much tax they owe.

No they wouldn't, just algebra. All you would have to do is type the function into a calculator. No derivatives or integrals would be necessary. The calculation would actually be quicker than the current one.

[dead0man]

I don't really care, I just want the people alive now to pay more of their fair share instead of pushing more and more off onto future generations.

[Ѕenator Αverroës]

"I want people to pay their fair share" is essentially a tautology.

[Χahar]

Depends on the circumstances, doesn't it? And also what you're trying to do. I think it's fairly clear, though, that the top rate should be significantly higher than the rate which ordinary people pay. There's also no point having a billion and twenty three different rates.

At the same time, of course, tax havens should be nuked.

I don't understand why British law permits tax exile. Nuking might be a bit far, but I would certainly support an invasion of Liechtenstein.

[opebo]

I think economic research tends to point to rates above 50% or so being rather pointless, in the sense that they actually lose the government revenue. The only real point of them is to make people feel better.

Actually no, the point to high marginal rates is neither raising revenue or 'making people feel better', it is to try to reduce the power of the elite.

[Nichlemn]

I think economic research tends to point to rates above 50% or so being rather pointless, in the sense that they actually lose the government revenue. The only real point of them is to make people feel better.

Actually no, the point to high marginal rates is neither raising revenue or 'making people feel better', it is to try to reduce the power of the elite.

Heaven forbid Bill Gates have more money for his foundation. I assume that's not what you mean by the "power of the elite", but I'm not sure exactly what it might be and what is so dangerous about it. If it's to do with political or media influence, things like campaign finance laws seem far more effective.

[Gustaf]

I think economic research tends to point to rates above 50% or so being rather pointless, in the sense that they actually lose the government revenue. The only real point of them is to make people feel better.

Actually no, the point to high marginal rates is neither raising revenue or 'making people feel better', it is to try to reduce the power of the elite.

lol. It isn't, because it doesn't. The traditional elites were a lot more powerful back in those days than they are now - largely because they have the resources to game a complicated tax code.

[opebo]

lol. It isn't, because it doesn't. The traditional elites were a lot more powerful back in those days than they are now - largely because they have the resources to game a complicated tax code.

Absolutely ridiculous, Gustaf.  Power is precisely and exactly the amount of money you have.  If you have more money, you have more power.  They have more money now, relative to their subjects.