chalu2, I appreciate the tone of your reply much more than
the other poster, but my mathematics are not crooked...
You say: "the marginal tax rate does not change with
the allowance or disallowance of tax credits".
This is simply not true... The phase-out of tax credits
(like the child credit I cited) may *dramatically* impact
a family's marginal rate.
You say: "to say that the $7100 comes completely out of
the $10000 sliver between $100K and $110K is silly..."
No, it is not silly... This is *precisely* the definition
of what a *marginal* tax rate is, i.e., how many cents are
paid in taxes on an *incremental* dollar that is earned.
Sure, the McCain website doesn't come right out and
say "71% marginal tax rate", but that is *indeed* the
effect!! By earning *only* an additional 10K, this family's
final tax bill increases by huge $7,100. Case closed.
Unfortunately, our tax code is littered with such
hidden phase-outs. Not only is there the child care
credit, but personal exemptions and itemized deductions
also phase out at income levels > 100K. This is a very
sneaky and unfair way to raise marginal rates on
"those evil rich people" making > 100K. McCain is
apparently unconcerned about this: see his own words,
on his own web site! In fact, in the case of the
child credit, McCain has *compounded* the problem
by increasing the dollar amount of the credit *without*
any corresponding increase in the phase-out range. |
