Explanation of the Tax System for Dummies (or us drunks) (companies, economic)

[trzlucky]

I usually don't just post links, but I thought that this one was worth sharing.

Our Tax System Explained: Bar Stool Economics - [domain blocked due to spam]

"that, ladies and gentlemen, journalists and college professors, is how our tax system works. The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start drinking overseas where the atmosphere is somewhat friendlier."

[LArenter]

Great link!

Prior to the 2001 and 2003 tax cuts, we had a larger degree of economic distortion created by the tax system. Higher earners not only pay a greater amount of taxes on a larger sum of earnings but they also pay at a higher percent bracket. This results in a reduction in economic efficiency – greater incentive to engage in tax-preferred behavior (Borrowing to buy more opulent home or investing in tax favored activities for companies). Those in higher brackets will have less incentive to increase work and savings as they are taxed disproportionally for doing well.

Then came the tax cuts, but after 2010, the maximum rate will increase to be 39.6% -- unless our next president says otherwise. You are going to find the wealthy finding other loop holes to avoid taxes and/or they will buy their “beer” elsewhere. Plus, with the additional tax savings for the poor, they will have fewer incentives for working harder and you are already collecting fewer taxes from them.

Our tax system just needs to be less progressive.