Re:IRS Launches Paperless Processing Initiative
by laurencerowe on Wednesday August 02, 2023 @07:57PM
(#36979538)
Wealthy individuals already pay a far lower rate of tax on their income from investments than employees do on earned income.
For a single filer in 2023 the standard deduction is $13,850. After that income is taxed differently.
Income tax rates for single filer earned income (excludes social security tax of 6.2% each for employee and employer up to $160,200):
10% $0 to $11,000
12% $11,000 to $44,725
22% $44,725 to $95,375
24% $95,375 to $182,100
32% $182,100 to $231,250
35% $231,250 to $578,125
37% $578,125 or more
Long term capital gains tax rates paid on most investment income (excludes 3.8% NIIT of 3.8% for those with income over $200,000):
0% $0 to $41,675
15% $41,676 to $459,750
20% $459,750 or more
It's perfectly possible for a flat tax to be far more progressive than the tax system today, though its rate would be far higher than 20%.
The highest effective marginal tax rates are often faced by those on lower incomes as the various transfer programs (earned income tax credit, medicare, healthcare subsidies, etc.) have uncoordinated phase outs. In 2012 it was particularly egregious and effective marginal rates approached 100% for those earning around $20,000. https://johnhcochrane.blogspot.com/2012/11/taxes-and-cliffs....
Personally I think it would make more sense for everyone to pay a flat tax of say 50% paired with a basic income for all (including children) and publicly funded healthcare.
For a single filer in 2023 the standard deduction is $13,850. After that income is taxed differently.
Income tax rates for single filer earned income (excludes social security tax of 6.2% each for employee and employer up to $160,200):
10% $0 to $11,000
12% $11,000 to $44,725
22% $44,725 to $95,375
24% $95,375 to $182,100
32% $182,100 to $231,250
35% $231,250 to $578,125
37% $578,125 or more
Long term capital gains tax rates paid on most investment income (excludes 3.8% NIIT of 3.8% for those with income over $200,000):
0% $0 to $41,675
15% $41,676 to $459,750
20% $459,750 or more
It's perfectly possible for a flat tax to be far more progressive than the tax system today, though its rate would be far higher than 20%.
The highest effective marginal tax rates are often faced by those on lower incomes as the various transfer programs (earned income tax credit, medicare, healthcare subsidies, etc.) have uncoordinated phase outs. In 2012 it was particularly egregious and effective marginal rates approached 100% for those earning around $20,000. https://johnhcochrane.blogspot.com/2012/11/taxes-and-cliffs....
Personally I think it would make more sense for everyone to pay a flat tax of say 50% paired with a basic income for all (including children) and publicly funded healthcare.