Quote:
Originally Posted by raab
And that's where a negative income tax comes in. Basically you take a set amount and you don't pay tax under that, but get a refund. Let's say the amount set is 40k with a 50% rate for easy math. So if you make nothing in a year you would be paid 50% of the difference between 0 and 40k. Meaning you would take home 20k. Now let's say you could earn 10k. You now take the 30k difference and again divide it in half. So with you 10k and the 15k refund you end up making 25k. That's the essence of a negative income tax. A tax of this kind would replace all welfare programs.
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To extend your proposal of progressive tax rates, why not just have 1% rate jumps for every $10K over your proposed base of $40k?
ie. If you make $50K, you pay 1% of the extra $10K, or $100 in income tax. If you make $60K you pay 1% of the first $10K and 2% of the next $10K for a total of $300. If you make $100K, you pay a total of $2100, if you make $150K you pay $6600 and so on up to a max rate of $95% at $1million. Above $1million, you pay $9500 of every $10K you make
General question: Does it bug you that the company you work for pays less income tax than you do? And they can write off stuff prior to taxation that you and I have to pay for after we're taxed.