Free Republic
Browse · Search
News/Activism
Topics · Post Article

To: Pearls Before Swine
Today, if the Fed Gov took 91%, the top bracket would have an effective tax rate above 100%.

First, the state and local taxes come off the top of the income line, and then the federal taxes kick in on the difference. So, no, it would not take it past 100%.

But the bigger point is that back in the 50s, no one paid a 91% tax rate. That was always a myth. There were so many loopholes and deductions allowed back then that if someone was at the very top, their effective tax rate was probably very similar to what they would pay today on a equivalent income.

The biggest difference between then and today is that the bottom income tax rates have gone to below zero. Today, many actually pay nothing yet get generous refunds for what they didn't pay. That is thanks to the old 'negative income tax' idea that surfaced in the late 60s and Nixon implemented in the early 70s. It was considered an incentive to work back then. Today, its an incentive to keep working at McDonalds.

It took a lot of people out of the game... they get without giving... and it has changed the dynamics profoundly. It's the Santa Claus government. It's not what can I give? It's what can I get?

25 posted on 11/20/2012 6:51:59 PM PST by Ditto
[ Post Reply | Private Reply | To 2 | View Replies ]


To: Ditto

Excellent points. Thanks for adding.


26 posted on 11/20/2012 7:06:32 PM PST by Pearls Before Swine
[ Post Reply | Private Reply | To 25 | View Replies ]

Free Republic
Browse · Search
News/Activism
Topics · Post Article


FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson