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aceventura3 · 12-14-2009, 09:37 AM

Those are interesting charts and graphs, but...

One of the points of a progressive tax policy is to social engineer. One of the unintended consequences is that low wage earners have major disincentives to earn more because of large marginal tax rates. If a person has the opportunity to earn an additional $5,000 but would face the lost of a tax credit or be put in a higher tax bracket that costs him $3,000 would he do it? Depends right? But the point is don't we need to look at after tax income trends or neutral, adjusted for taxes, income trends?

Another problem is that the people in the percentiles is not stagnant. Generally average people start in a low percetile and reach their personal highest percentile in their 50's or early 60's and then they go down. So a person who is 18 and dropped out of H.S. is hurt the most. But the 18 year-old who goes to college gets a minimum wage job while in school, then goes to grad school while working an entry level job, and then gets a Phd. may hit the top percentile in their 40's and only stay their until retirement.

So what does the above graphic information really tell us? Not much.

What we do know is that when Bush cut taxes, the tax dollars collected by the federal government went up, not down. what does that tell us? And who benefited from that?

12-14-2009, 09:37 AM	#41 (permalink)
aceventura3 Junkie Location: Ventura County	Those are interesting charts and graphs, but... One of the points of a progressive tax policy is to social engineer. One of the unintended consequences is that low wage earners have major disincentives to earn more because of large marginal tax rates. If a person has the opportunity to earn an additional $5,000 but would face the lost of a tax credit or be put in a higher tax bracket that costs him $3,000 would he do it? Depends right? But the point is don't we need to look at after tax income trends or neutral, adjusted for taxes, income trends? Another problem is that the people in the percentiles is not stagnant. Generally average people start in a low percetile and reach their personal highest percentile in their 50's or early 60's and then they go down. So a person who is 18 and dropped out of H.S. is hurt the most. But the 18 year-old who goes to college gets a minimum wage job while in school, then goes to grad school while working an entry level job, and then gets a Phd. may hit the top percentile in their 40's and only stay their until retirement. So what does the above graphic information really tell us? Not much. What we do know is that when Bush cut taxes, the tax dollars collected by the federal government went up, not down. what does that tell us? And who benefited from that? __________________ "Democracy is two wolves and a sheep voting on lunch." "It is useless for the sheep to pass resolutions on vegetarianism while the wolf is of a different opinion." "If you live among wolves you have to act like one." "A lady screams at the mouse but smiles at the wolf. A gentleman is a wolf who sends flowers."