Terry, If I remember correctly, in the 60' we had a marginal tax rate of 70%, now we have it at 36% (well truly at 39.6% but that rates applies only on income above $1 MM, most of us are in the 36% marginal rate). So the direction is of less taxation at the margin. The distortion however is the "payroll" taxes (one I mostly do not pay living "off royalties") which runs really at 15% or so of the first $67,000. If you add these to the list Berney supplied you get a better vision of the real distribution of taxes.
The question, IMHO, is not so much what is fair or not, but what works best economically. I think that economically, to the extent that there is really a surplus, raising the thresholds will provide more support to continuation of the economic prosperity then either changing the system to a flat rate or to the institution of a national sales tax or for that matter to reducing everyone rates by 10% (the approach which will be most beneficial to me is elimination of the capital gain taxes, since a good 90% of my taxes are in this category, but what happen to be good for me in this case is not, IMHO, exactly the best for the economy and the country).
Zeev |
