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  •  Let's be clear about the over $250K taxes (10+ / 0-)

    It amazes me how ignorant Americans are about the progressive tax system.

    One misunderstood aspect of this was at least talked about during the election.   This aspect is that the money under $250K is taxed the same for everyone even those with taxable income above $250K.    So if you make $251K you are only taxed more on the $1K above $250K.

    The other aspect that most Americans don't understand that the $250K number isn't based on your earned income.   Most people I've talked to believe that if they were making $270K in pay from their employer that they'd be paying more taxes.    What they don't understand is that you pay the different tax rates based upon your adjusted gross income (let's leave out AMT calculations for now).   Everyone who has ever done their taxes know that their AGI is hardly ever close to your take home pay or salary.

    I would guess most people with tax liabilities over $250K are making much more than $250K salary.   It means that after all their deductions (state income tax, mortgages, investment losses, etc.) they still have more than $250K in income that year.    These are not people who are hurting for money and could easily pay a few more percentage points in taxes on the amount over $250.

    For small businesses that are still filing as individuals, it means the owner is pulling out well over $250K in profits from their business.   I would argue that higher tax rates would be an incentive for owners to keep more invested in their company.

    •  Argue, We Proved It For Half a Century. (3+ / 0-)
      Recommended by:
      PeterHug, ybruti, blueoasis

      Proper progressive taxation-- which is opposed by both Reaganomic parties-- discourages hyper compensation being either sought or offered.

      Wait, wait. This is all past tense not theory or hypothesis. Already demonstrated and proven.

      That steep individual taxation left more money in the business as you say, and then properly higher business taxation further encouraged the business to distribute some of the potentially higher profits among suppliers, workers, charity, and of course longer term steady growth.

      And the masses held the greatest share of wealth and income they ever did in our history, before these last 35 years of solutions were implemented.

      We are called to speak for the weak, for the voiceless, for victims of our nation and for those it calls enemy.... --ML King "Beyond Vietnam"

      by Gooserock on Tue Dec 18, 2012 at 07:53:47 PM PST

      [ Parent ]

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