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income - 30,000
income tax = 3000 (All SSA and Medicare)
income - 60,000
income tax = 6000 (All SSA and Medicare)
income - 100,000
income tax = 10,000 (SSA and Medicare) + 6000 (Federal Income Tax)
income - 500,000
income tax = 10,000 (SSA and Medicare) + 6,000 (Federal Income Tax) + 100,000 (Federal
income - 1,000,000
income tax = 10,000 + 6,000 + 225,000
income - 10,000,000
income tax = 10,000 + 6,000 + 4,250,000
And the guy making 500k pays the same SS and Medicare as the guy making 100k? That shouldn't be and probably why they say it's going broke.
Last edited by Pragmatist; 6th November 2016 at 03:46 AM.
I don't think any of us are in possession of the data with which to work out a balance between revenues and expenditure which will be at least neutral - in respect of any of our societies. However, it might prove useful to examine the purposes of taxation.
It appears to me that the primary purpose of taxation is to provide sufficient revenue with which to run a society in the manner we see fit. As you can see, we are already operating in the realms of ambiguity, as different ideologies have different blueprints for their ideal society. Perhaps the only things we may all agree upon in respect of our conceptually ideal society, might be a secure, non-violent place, in which inequity is kept to the minimum required to avoid individual suffering - particularly where the dis-empowered and disenfranchised are concerned (children being a prime example thereof).
Therefore, any discussion devolving about taxation systems should perhaps concern itself with practical consideration of that potential harm, rather than any conceptual unfairness to the already socially and financially advantaged. To use a somewhat hyperbolic example, a man on five million a year could easily afford to pay an effective 60% in income taxes, and neither he nor his family would struggle to exist on a nett two million dollars/pounds/euros. Whereas a family trying to get by on twenty thousand might easily suffer if subjected to even a modest 20% effective tax rate. And this is before considering VAT or any other form of consumption taxes - which are unequivocally regressive, but beloved of governments.
The current systems of progressive taxation rates extant in most civilised societies are at fault only insofar as the rates are kept too low to balance the books - largely by the efforts of politicians whose only foresight encompasses their chances at the next general election. A fist full of dollars should not be the premium enticement from those who would seek to govern our children's future.