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Politics : Formerly About Advanced Micro Devices
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To: J_F_Shepard who wrote (606789)4/6/2011 5:02:10 PM
From: TimF  Read Replies (2) of 1579916
 
I kept saying wealthy folks only pay about 20% of AGI and you and friends kept tossing out the marginal brackets.

Noting that marginal tax rates are high, and this is a bad thing, is not claiming that the marginal rates paid are the same as the average rate paid. The marginal rate is the tax on the next dollar, and as such exerts a strong effect on decisions about earning that additional dollar. The average rate is also important, a high average rate means the tax creates a high burden. 20 percent average effective rate is a high average rate.

Increasing the marginal rate might not increase the average rate or the tax revenue (since it encourages tax avoidance and evasion, and discourages investment and work), so the benefit is rather uncertain (and that's assuming higher federal revenue as a benefit), the harm, the distortion and dead weight loss is not uncertain (even if the exact level of it is unknown).
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