Let’s say you invent something and you make $1million dollars on it.
You would think you are set for life- you’ve won the lottery.
But, for THAT YEAR your income is $1 million so you pay a majority of that money in taxes- and then you go back to working for a living for the rest of your life
How if the hell is that ‘fair’??
Perhaps the better and more historic question to ask....after the new President gets Senator Snuffy and Representative Freddy to pass some new great tax on the rich....what typically happens?
Snuffy and Freddy come back to the table an hour later....and craft ten tax credits, which work in other ways unrelated to the taxes created at the beginning of the day.
So when IRS does all the tax revenue collection....it’s an odd thing. Out of the 100 new tax dollars for revenue collection that was talked about...just five dollars make it through the system....mostly related to non rich-people and the middle-class who didn’t get some nifty new credit.
It takes about four years for anyone to realize that the credits cancelled out the taxes, and all that talk was for nothing.
This is the script used by Presidents and politics for the past hundred years...why should I expect anything to change?
It's not. There used to be an ‘income averaging’ tax provision for exactly this purpose - allowing you to pay taxes on average income over a specific period (I think it was 5 years). That's gone now, except for farmers and fisherman.
To me, the same concept applies to people who made nothing, or very little for many years while training for a specific professional degree. When they finally start making decent money, they are taxed as though they're wealthy, but they are in reality playing catch up for all the years they didn't make anything, or very little. For some professions this can be a decade or more. Then add in the percentage of income that has to go to paying student loans.
On the other hand, for many of the uber rich, there's no such thing as a W-2 for your weekly or monthly paycheck. You may not even show an employment income, and can shelter your investment income in specific ways if you have good accountants and tax lawyers.
And then you have the 45.3% who pay no federal income taxes at all.
The system is broken and needs simplification and fairness.
It wasn’t fair for you to invent something at the expense of others who didn’t invent it. Society has determined, heretic, that you need to be taken down a peg. :)