Bernie Sanders

cbi1972 said:

Are you an actual accountant?
The 37% only applies to the portion of income that is over the bracket threshold. Your income under the tax thresholds are taxed at the lower rates.
At 250k, your marginal tax rate is 33% but your effective tax rate is only about 24.7%

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Yeah I'm dumb and too quick to type.
Not an accountant (work in advertising). The name is a short film that Ray McKinnon wrote.

cbi1972 said:

Are you an actual accountant?
The 37% only applies to the portion of income that is over the bracket threshold. Your income under the tax thresholds are taxed at the lower rates.
At 250k, your marginal tax rate is 33% but your effective tax rate is only about 24.7%

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Many are confused by the term "marginal tax rate". Don't forget that Taxes are paid on adjusted gross income.. income after subtracting deductions exemptions etc.
I don't believe progressive taxes are a disincentive as Bodhi suggests. If you make an additional hundred thousand and your marginal rate is 40% you are still putting an extra 60 thousand in your pocket.

seebell said:

Many are confused by the term "marginal tax rate". Don't forget that Taxes are paid on adjusted gross income.. income after subtracting deductions exemptions etc.
I don't believe progressive taxes are a disincentive as Bodhi suggests. If you make an additional hundred thousand and your marginal rate is 40% you are still putting an extra 60 thousand in your pocket.

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Using your "extra $100K" example, would a marginal rate of 90% be a disincentive?

crimsonaudio said:

'Feel the bern', lol.

I'm sure most every politician has their blind followers who literally know nothing other than what their candidate of choice has fed them, but the ignorance in this video reminds me of some of the videos I saw in 2008...

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While everyone is quick to point out how violent and dumb the trumpers are, the stone cold bernies scare me more. I think they actually believe in what Marx lite believes. That Utopias and perfect societies can exist. But then again when liberals go the extra mile and compare trump to hitler, you get all these college kids thinking that socialism is so much better than facism, and if trump is compared to hitler we must be fascists if he wins.

I will say that Bernie has some good points and merits, but I just can't vote for him.

Tide1986 said:

Using your "extra $100K" example, would a marginal rate of 90% be a disincentive?

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I don't know. You might find this interesting.

What does this mean for public policy? Given the large rise in inequality in the United States over the past 40 years, if the historical evidence tells us that it is unlikely that taxing the wealthy has a large negative impact on growth (and it might even have a positive impact), shouldn't we increase rates on the wealthy from their current top rates of 35%?

http://economistsview.typepad.com/economistsview/2012/10/does-taxing-the-wealthy-hurt-growth.html

Empirical evidence is better than a philosophical judgement.

seebell said:

Empirical evidence is better than a philosophical judgement.

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This assumes that maximizing government coffers is even a legitimate objective. The philosophical judgment that the federal government be limited to constitutional functions was enshrined long ago, not that anyone in power these days gives that idea much credence. If you're willing to violate that principle, there's nothing stopping you from discarding all notions of property, and you find this sentiment in the Sanders camp quite a bit. It's not empirical evidence that they care about, it's "justice" and if justice means taking things from others by force, then that's what they'll do.

seebell said:

I don't know. You might find this interesting.

What does this mean for public policy? Given the large rise in inequality in the United States over the past 40 years, if the historical evidence tells us that it is unlikely that taxing the wealthy has a large negative impact on growth (and it might even have a positive impact), shouldn't we increase rates on the wealthy from their current top rates of 35%?

http://economistsview.typepad.com/economistsview/2012/10/does-taxing-the-wealthy-hurt-growth.html

Empirical evidence is better than a philosophical judgement.

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I guess it depends on whether or not one agrees that government should be a part of the real economy.

seebell said:

I don't know. You might find this interesting.

What does this mean for public policy? Given the large rise in inequality in the United States over the past 40 years, if the historical evidence tells us that it is unlikely that taxing the wealthy has a large negative impact on growth (and it might even have a positive impact), shouldn't we increase rates on the wealthy from their current top rates of 35%?

http://economistsview.typepad.com/economistsview/2012/10/does-taxing-the-wealthy-hurt-growth.html

Empirical evidence is better than a philosophical judgement.

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By the way, big disclaimer therein:

This debate, however, is largely based on ideology rather than evidence. Unfortunately, it is quite difficult to figure out the impact of taxation on growth. Changes to the tax codes usually pass Congress when other things are happening to the economy. For example, the 1982 tax cuts, which dropped the top marginal tax rate from 69% to 50%, were passed towards the end of a large recession. Moreover, the impact of taxes on growth can change over time as the economy changes.

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cbi1972 said:

This assumes that maximizing government coffers is even a legitimate objective. The philosophical judgment that the federal government be limited to constitutional functions was enshrined long ago, not that anyone in power these days gives that idea much credence. If you're willing to violate that principle, there's nothing stopping you from discarding all notions of property, and you find this sentiment in the Sanders camp quite a bit. It's not empirical evidence that they care about, it's "justice" and if justice means taking things from others by force, then that's what they'll do.

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Thanks for your reply cbi1972. The question was is a 90%marginal rate a dis-incentive?. That what my statement about empirical evidence was referring to. You're welcome.

seebell said:

Thanks for your reply cbi1972. The question was is a 90%marginal rate a dis-incentive?. That what my statement about empirical evidence was referring to. You're welcome.

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Based on your responses thus far, I assume there's no limit to the marginal effort you'd exert to generate an additional $100K of income so you can keep $10K of it.

That's why many I know have turned to the cash for services economy. If it works for hookers, pimps, and drug dealers why not the electrician?


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Tide1986 said:

Based on your responses thus far, I assume there's no limit to the marginal effort you'd exert to generate an additional $100K of income so you can keep $10K of it.

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you know what happens when you assume.

seebell said:

you know what happens when you assume.

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Is there a difference in the effort you'd be willing to expend if you were able to keep the entire $100K versus only $10K of it?

bamacon said:

That's why many I know have turned to the cash for services economy. If it works for hookers, pimps, and drug dealers why not the electrician?


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I'm with you bamacon. There are huge numbers of people who are failing to report their real income. I work on your house. I cash your check. Just report enough to Uncle Sam to look legit. Or don't file at all. National sales tax or value added tax might be the answer.

seebell said:

I'm with you bamacon. There are huge numbers of people who are failing to report their real income. I work on your house. I cash your check. Just report enough to Uncle Sam to look legit. Or don't file at all. National sales tax or value added tax might be the answer.

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I tend to agree with this tax philosophy but only if the income tax amendment is repealed.

seebell said:

I don't believe progressive taxes are a disincentive as Bodhi suggests. If you make an additional hundred thousand and your marginal rate is 40% you are still putting an extra 60 thousand in your pocket.

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Progressive taxation is not a prohibition to doing extra work, but it is a disincentive. If you are paid by the hour, your 41st hour is time-and-a half. Good incentive, right? What if the offer was only half-pay? You are less likely to do the extra work.

And, as others have mentioned, why do you want to the government to get marginally more? They waste it. Always. I prefer the guy that works hard be able to keep that money. If he invests the extra he can climb the social ladder. The way it is now the government takes a bigger cut (through progressive taxation or the double taxation of capital gains) the harder he works. The leftist desire is to punish the wealthy, but it is the little guy who wants to achieve that gets hurt.

TIDE-HSV said:

Even as recent as the 1700s, it was possible for government to be a small part of the economy. With modern trade and globalization, It's not realistic to expect governments not to be part of the global economy...

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Agreed...but the key word is "small".

seebell said:

Thanks for your reply cbi1972. The question was is a 90%marginal rate a dis-incentive?. That what my statement about empirical evidence was referring to. You're welcome.

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If you want to use the 1950s as a point of evidence, we can go back to before the income tax existed to see the implications of that (the nation existed without it, and the people had a healthier relationship with government).

The top marginal tax rate is less of a factor in our economy than things like slavery, industrialization, technology, etc.

Principles of economics still hold. If you want to see disincentives at work, look at what policies government implements when it wishes to shape behavior without straight up making it illegal. It taxes the hell out of things it wants less of, and gives credit for things it wants more of.

Want to reduce greenhouse gas emissions? Cap and trade.

Want to reduce smoking and alcohol consumption? Tax stamps.

And look at the enormous list of tax credits on the tax forms. Earned Income Tax Credit, Education Credits, Child and Dependent Care Credit, Adoption Credit, Saver's Credit, Small Business Health Care Credit, Plug-in Electric Vehicle Credit

A 90% marginal tax rate is absolutely a disincentive. "Empirical evidence" from the 1950s is fraught with so many confounding variables, it's not worth anything.

Tide1986 said:

I guess it depends on whether or not one agrees that government should be a part of the real economy.

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Hence the difference between the liberals and establishment politicians vs. the libertarians and the Reps at the grass roots level.