Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : View from the Center and Left -- Ignore unavailable to you. Want to Upgrade?

To: Steve Lokness who wrote (210474)

12/4/2012 6:36:34 PM

From: cosmicforce

Respond to of 543509

< Why would you want to retain that system?>

I don't and said that it is broken. Apologists (not you ) say how high our total tax rate is - it is just not true. It is like quoting the list price for a car when almost no one pays that... it is a red herring.

I like progressive wealth and income taxes. Lets look at the following model which is progressive by a simple constant times the wealth or income, increasing at a low exponent of 1.05. The total tax is an income plus a wealth tax. Income and Wealth have a single deduction each. This can be calculated very easily by anyone with a calculator.

T = f(I^k) + g(W^k)
k = progression constant = 1.05 (you pay more if you make and/or own more)
f = 8%
g = 1%
W = AdjWealth = Assets - Obligations - $150,000 personal residence adjustment
I = AdjIncome = Income - d*15k person deductions

d=deductions (children, old age, etc. like now)

Here's what such a tax looks like for several families : 1 home owning family, one professional, one modestly wealthy, and three clearly wealthy, including a multi-billionaire uber-wealthy family. The people that pay the most are the wealthy. But because uber-wealthy have most of their wealth in assets, not income, the wealth taxes still capture it. Even though their numbers are large, these people are still keeping the vast majority of their wealth year after year. It looks very fair to me.

unadjusted I	unadjusted W	Tax	T as % of I	T as % of W
$75,000.00	$300,000.00	$4,662.87	6%	2%
$200,000.00	$800,000.00	$32,947.48	16%	4%
$300,000.00	$2,000,000.00	$73,736.11	25%	4%
$1,000,000.00	$10,000,000.00	$369,927.70	37%	4%
$10,000,000.00	$1,000,000,000.00	$29,959,085.83	300%	3%
$40,000,000.00	$10,000,000,000.00	$323,888,779.00	810%	3%