Originally Posted by Slims

It is true that someone who is making say 100,000 dollars a year and only spends 50,000 a year will pay a lower percentage in taxes....that year. But when he eventually takes that money out of savings and spends it, BAM! he pays tax. There is no escape.

But what if he invests that money and makes a profit? Then when he tries to spend those profits they also get taxed!


I realized what the 8,000 dollar figure was, and it is misrepresented in that graph. The 8,000 dollars represents the amount of money reimbursed by the government...it is a reimbursement for taxes paid on poverty level spending, which makes spending up to about $25K/year tax free which your chart fails to accurately reflect. That chart makes it look like every dollar over the first 8,000 is taxed which, I think, is deliberately misleading.

Additionally, someone who makes 50,000 per year will, after the prebate, only pay taxes on about half their income, so they will be paying a rate of approximately 12% whereas someone who is making a million a year will pay the full 23%.