Silberman
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March 28, 2021, 04:24:51 AM |
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But what governments seem to forget is that by taxing the population so harshly then the desire of people to keep earning more money decreases significantly, think about it, with an effective tax rate of 50% this means that on real terms you work for the government for free for 6 months and you only receive profits from the next 6 months you work, this is ridiculous, this decreases productivity and over the long term this will be seen in the GDP of the country.
I don't know whether people will be less productive when the tax rates are increased. In other countries, tax evasion increases when something like this happen. But since the IRS is very strict in the United States, the chances of tax evasion are very small. One direct impact may be on capital gains. People may postpone or delay realizing their capital gains. Eventually they need to pay the capital gains tax, but with lower taxes they will be selling their capital assets more frequently. It does not happen on the short term but it does on the long term, I will give you common example of what happened under communism, imagine a factory and workers with different levels of skill, everyone was paid the same but if you were one of the most productive employees then you were given more responsibilities and a higher quota but no higher pay, this meant that you had to do more for the same pay, eventually this generated a system that incentivizes those that were the most productive to not produce to their full capacity, and something similar will happen over the long term with such high taxes as people are not incentivized to work harder as most of the fruits of their labour go to the government.
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jaysabi
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March 28, 2021, 04:40:05 AM |
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Those numbers are always talking about as household income, if you thought otherwise that's on you for not understanding since that's the common way taxes are always talked about. Biden always said households making more than $400,000.
For someone who earns $400,000 per year, the applicable state income tax in California comes to 11.3%. With the latest increase in federal income tax, California residents will be paying more than 50% of their income as tax and the net take away will be less than $200,000. And for cities such as Los Angeles and San Francisco, given the high cost of living, the tax increase will have a large negative impact on the quality of life. After WWII, the top marginal tax rate was 90% in the US and it was still in the 70% range by the 1960s. Nobody making $400,000 a year is hurting terribly because of taxes, and their wealth is only possible in the first place thanks to the economy built by the US-style of government. One thing remains undeniable- as long as the US runs a deficit, nobody is paying enough in taxes.
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Shasha80
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March 28, 2021, 06:00:31 AM |
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I think the steps taken by Biden were right by raising taxes, especially for the rich and large corporations it is obligatory to pay higher taxes. The problem is that the economic crisis in America is getting worse and the government has done a lot of printing money. The most effective way to get income is to raise taxes, from there the government can get income that can be used for the interests of the American state. I know it will definitely have a negative effect, but if this step is able to provide a bigger positive effect why not do it. The problem is that the rich and big companies often manipulate the profits they generate, this is what makes American tax revenues not optimal. Hopefully, Biden's steps will be supported by most of the American people, because they themselves have chosen Biden as president. So they have to trust all the decisions that Biden makes, and let Biden do his job well.
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bryant.coleman
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March 28, 2021, 12:31:07 PM |
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Those numbers are always talking about as household income, if you thought otherwise that's on you for not understanding since that's the common way taxes are always talked about. Biden always said households making more than $400,000.
For someone who earns $400,000 per year, the applicable state income tax in California comes to 11.3%. With the latest increase in federal income tax, California residents will be paying more than 50% of their income as tax and the net take away will be less than $200,000. And for cities such as Los Angeles and San Francisco, given the high cost of living, the tax increase will have a large negative impact on the quality of life. After WWII, the top marginal tax rate was 90% in the US and it was still in the 70% range by the 1960s. Nobody making $400,000 a year is hurting terribly because of taxes, and their wealth is only possible in the first place thanks to the economy built by the US-style of government. One thing remains undeniable- as long as the US runs a deficit, nobody is paying enough in taxes. US us running a deficit because of the incompetence of the government. So giving this excuse, you want to go back to the 1960s and impose a 70% tax on everyone? If the budget deficit is there, then the solution is to reduce government expenses and not to increase the tax rates further when they are already in the 50%-60% range (I am talking about states such as California). Anyway I am not an American and I don't really care how much they raise the taxes. If the taxes are raised to 70%, then they very much deserve it because they voted someone in to power who said before elections that he is going to raise taxes.
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Kakmakr
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March 28, 2021, 05:24:23 PM |
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His favor with the voters are going to take a knock, because Tax increases are never taken well. The thing is, the proposals are targeting the rich people and they are the people who are creating the jobs for the middle class.
The fairest tax implementation would be a value-added tax (VAT) ....because it spreads the burden on all citizens and not only on the middle class and the rich people. (I think this only applies to some states?)
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RealMalatesta
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March 29, 2021, 11:22:41 AM |
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Still it is 14%. In my country (India) it is estimated that the actual amount of income tax owed is more than 2 times the annual collection, meaning an evasion rate of more than 50%. And I am sure that this is the case with most of the developed nations. The tax rates are kept extremely high (43% for the top slab), and government has made gambling, crypto trading.etc as illegal. And there is a stupid loophole to make agricultural income tax free. A lot of people use this loophole to avoid paying taxes on their income from other sources (they just show it as agricultural income).
The difference between USA and in all other nations is that if you do not have a branch of government like IRS trying to catch every single tax evasion and charge insane punishments for it to deter people away from doing that. India may or may not have that, but I know almost all huge European nations do not have that. On top of it, this is a thing that impacts very wealthy, they will have to pay a lot more taxes now that Biden puts this in charge (when) and that means IRS needs more money because the more money you give to IRS the more money they find and give back to community, so giving money to IRS is not a bad idea Right now IRS is underfunded and needs more money, they may not find everyone and they may not end up stopping some rich people, but if they could actually get funded, and given more powers, they could stop everyone from tax evasion, from the small grocery store right around the corner to amazon, everyone.
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Vishnu.Reang
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March 29, 2021, 12:16:05 PM |
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The difference between USA and in all other nations is that if you do not have a branch of government like IRS trying to catch every single tax evasion and charge insane punishments for it to deter people away from doing that. India may or may not have that, but I know almost all huge European nations do not have that.
On top of it, this is a thing that impacts very wealthy, they will have to pay a lot more taxes now that Biden puts this in charge (when) and that means IRS needs more money because the more money you give to IRS the more money they find and give back to community, so giving money to IRS is not a bad idea
Right now IRS is underfunded and needs more money, they may not find everyone and they may not end up stopping some rich people, but if they could actually get funded, and given more powers, they could stop everyone from tax evasion, from the small grocery store right around the corner to amazon, everyone.
Tax avoidance using various loopholes may be possible in the US, but tax evasion is very unlikely due to the above mentioned facts. In India, the income tax department is now mostly going after the big fish, so they may ignore the small-scale tax evaders even if they have enough data to prosecute them. Tax-related law suits can go on for many decades, due to the slowness of the legal system in India. In most cases, the tax authorities try to reach a compromise with the evaders. Only in 10-15% cases, they actually go ahead with the legal action.
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jaysabi
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April 10, 2021, 05:43:45 PM |
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Those numbers are always talking about as household income, if you thought otherwise that's on you for not understanding since that's the common way taxes are always talked about. Biden always said households making more than $400,000.
For someone who earns $400,000 per year, the applicable state income tax in California comes to 11.3%. With the latest increase in federal income tax, California residents will be paying more than 50% of their income as tax and the net take away will be less than $200,000. And for cities such as Los Angeles and San Francisco, given the high cost of living, the tax increase will have a large negative impact on the quality of life. After WWII, the top marginal tax rate was 90% in the US and it was still in the 70% range by the 1960s. Nobody making $400,000 a year is hurting terribly because of taxes, and their wealth is only possible in the first place thanks to the economy built by the US-style of government. One thing remains undeniable- as long as the US runs a deficit, nobody is paying enough in taxes. US us running a deficit because of the incompetence of the government. So giving this excuse, you want to go back to the 1960s and impose a 70% tax on everyone? If the budget deficit is there, then the solution is to reduce government expenses and not to increase the tax rates further when they are already in the 50%-60% range (I am talking about states such as California). Anyway I am not an American and I don't really care how much they raise the taxes. If the taxes are raised to 70%, then they very much deserve it because they voted someone in to power who said before elections that he is going to raise taxes. Do you know what a top marginal tax rate is? Because a top marginal tax rate of 70% does not mean "everyone pays 70% taxes." Your response seems to ignore how progressive tax structures work in that as tax brackets increase they affect fewer and fewer people and it ignores the fact that not all income is taxed at 70% for people who fall into that bracket. Someone who falls into the 70% tax bracket wouldn't have their first tens of millions taxed at 70%, only income past a certain threshold. And yes, I believe the top .1% (or possibly more) should be paying 70% income tax.
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bryant.coleman
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April 12, 2021, 05:00:48 AM |
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And yes, I believe the top .1% (or possibly more) should be paying 70% income tax.
Yeah.. that is the ultimate dream of every left supporter. Successful people should be punished and their wealth should be confiscated (obviously with the exception of left-leaning billionaires such as Jeff Bezos and Mark Zuckerberg, who are allowed to evade taxes using various loopholes). A few years back, François Hollande came up with the idea of taxing the rich at a rate of 75%. And everyone knows what happened after that. Anyway, best of luck with your 70% tax proposal.
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