09-05-2015, 12:53 AM
(09-04-2015, 10:08 PM)JustWinBaby Wrote: I don't need to read the logic behind it to know it's stupid - I actually studied economics. And I also know there's little correlation between marginal tax rates and revenues collected by the govt. But a 90% tax rate is just the tops for attracting future investment and businesses!
And the wealthy pay quite a bit more than you realize. Let's take the owner of a C Corp:
1) 35% corporate tax rate
2) top federal rate on his income of nearly 40%
3) state and local taxes vary significantly, but let's call it 5%
So right there, every dollar his business earns he takes home $0.37 after taxes, which is an effective rate of 63%.
But we're not done. He invests that money back into his company and then has 23%+ taken out as a capital gain AFTER the 35% tax the corporation paid. Now we're north of 80% effective tax rate.
You have no clue how any pf this works.
A corporation only pays taxes on PROFITS. And the salary that he earns from his company is a tax deduction that reduces the corporations profits.
Plus pretty much all money re-invested in the corporation is a tax deduction that reduces the profits that are taxed.
So pretty much every one of your points is false.
