| Top Marginal Tax Rate | |
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NoCoPilot
Posts : 20161 Join date : 2013-01-16 Age : 69 Location : Seattle
| Subject: Top Marginal Tax Rate Tue Jul 15, 2014 12:51 pm | |
| Much is made, in Stiglitz and Hartmann and other recent economy books I've read, that during the Eisenhower years the "top marginal tax rate was 90%."
However, it's not often pointed out that the 90% is not ALL INCOME -- only income above $200,000 (which would be $2.5 million today). The net tax rate, including income below $200,000 as well as above it, probably approaches the more universal rate of between 31% and 36%.
Reagan's slashing of the top tax rate to 28% (and reclassifying capital gains to a lower rate) means that billionaires actually pay LESS tax on their top income than on their bottom -- making it advantageous to gamble in the stock market rather than invest in new plants or starting new businesses. |
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_Howard Admin
Posts : 8734 Join date : 2013-01-16 Age : 79 Location : California
| Subject: Re: Top Marginal Tax Rate Tue Jul 15, 2014 2:16 pm | |
| - NoCoPilot wrote:
- However, it's not often pointed out that the 90% is not ALL INCOME -- only income above $200,000 (which would be $2.5 million today). The net tax rate, including income below $200,000 as well as above it, probably approaches the more universal rate of between 31% and 36%.
You may want to rethink this, NoCo. Yes, in 1953, for a single person or married filing separately, the top marginal rate kicked in at $200,000 (about $1.7 million in constant 2013 dollars). But there were about two dozen brackets below that. For example, the 80% bracket kicked in at $60,000 ($516,000 in 2013 dollars) and the 34% bracket kicked in at $6,000 ($52,594 in 2013 dollars). Hard to see how anyone who entered the top marginal bracket could wind up with an overall effective rate of 31%. |
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NoCoPilot
Posts : 20161 Join date : 2013-01-16 Age : 69 Location : Seattle
| Subject: Re: Top Marginal Tax Rate Tue Jul 15, 2014 2:19 pm | |
| I didn't do any research on it. This sort of information is not easy to come by. The math would be well beyond my feeble education. |
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_Howard Admin
Posts : 8734 Join date : 2013-01-16 Age : 79 Location : California
| Subject: Re: Top Marginal Tax Rate Tue Jul 15, 2014 2:38 pm | |
| I could run an example, but with 25 or 26 brackets to calculate, it's too much work (or I'm too lazy; take your pick). But I can give you this real life example: the last year I worked, I was in the top bracket of 39.6%. Tricky thing is that as your income reaches certain levels, you start losing deductions, so my effective marginal bracket was over 41%. The federal income tax rate for my total income was 35.98%. (And that does not include the California income tax, which was another $100,000.)
So using my example, and accounting for the large number of brackets they used to have, I don't see how anyone who hit the top marginal bracket could ever have an overall rate about 20 brackets lower.
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NoCoPilot
Posts : 20161 Join date : 2013-01-16 Age : 69 Location : Seattle
| Subject: Re: Top Marginal Tax Rate Tue Jul 15, 2014 2:44 pm | |
| Poo. Your pathetic devotion to reality is no match for my internet-fueled indignation. |
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_Howard Admin
Posts : 8734 Join date : 2013-01-16 Age : 79 Location : California
| Subject: Re: Top Marginal Tax Rate Tue Jul 15, 2014 2:52 pm | |
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NoCoPilot
Posts : 20161 Join date : 2013-01-16 Age : 69 Location : Seattle
| Subject: Re: Top Marginal Tax Rate Tue Jul 15, 2014 3:02 pm | |
| It's snowing still. And freezing. However, we haven't had an earthquake lately. |
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_Howard Admin
Posts : 8734 Join date : 2013-01-16 Age : 79 Location : California
| Subject: Re: Top Marginal Tax Rate Tue Jul 15, 2014 3:04 pm | |
| I'm sure that has some connection to this thread, but I am missing it.
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NoCoPilot
Posts : 20161 Join date : 2013-01-16 Age : 69 Location : Seattle
| Subject: Re: Top Marginal Tax Rate Tue Jul 15, 2014 3:06 pm | |
| How do you eat a baby bird? |
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_Howard Admin
Posts : 8734 Join date : 2013-01-16 Age : 79 Location : California
| Subject: Re: Top Marginal Tax Rate Tue Jul 15, 2014 3:10 pm | |
| Are you off your meds again?
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| Subject: Re: Top Marginal Tax Rate | |
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| Top Marginal Tax Rate | |
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