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Politics : Formerly About Advanced Micro Devices
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To: J_F_Shepard who wrote (531938)11/24/2009 1:30:45 AM
From: TimF  Read Replies (1) of 1578553
 
You're presenting a marginal rate as the rate on all income....that is not true..

No, I've explicitly said its the marginal rate, and I also talked about paying 50+% tax on the marginal dollar.

Marginal rates that high create perverse incentives and discourage wealth creation. Also their is no just reason for the already bloated government to grab most of the additional wealth created by wealthy people (or any one else, but their only trying to do so to the wealthy).

In addition to those two points, focusing taxes so thoroughly on those with high incomes makes tax receipts more volatile and increases deficits when we have a downturn.

And it leaves many people paying no net taxes, which I used to see as a plus, but its probably not when government is so large and expensive, you have a large expensive government that almost have the voters can support making bigger at no cost to themselves.

And if I recall correctly, the hedge fund mgrs income is treated as capital gains....is that fair?

They still pay higher rates than most. Fair in this context as in many others isn't such a simple, or very valuable concept. But I do think they should pay a higher rate, if not the same as the ordinary income rate on their whole earnings. Effectively they are getting paid in part a percentage of the future earnings, they could take a percentage ownership, and get the percentage of earnings that way, but if they did that they would have to pay ordinary income tax on the initial worth of that ownership stake which they are not paying part of the money at ordinary rates.
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