General Discussion
Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsThis is what we need to return to for federal income tax rates.
https://www.tax-brackets.org/federaltaxtable/1982Just inflation adjust the income brackets on the left, but the rates are spot on.
Karadeniz
(22,513 posts)JHB
(37,160 posts)'Nother hour and a half, two hrs.
Dr. Shepper
(3,014 posts)This would mean after mortgage and basic bills (including student loans and medical) were paid, we would have nothing left even for groceries.
No thank you.
ETA - we moved to the Midwest so our mortgage is basically the cost of rent we paid on the west coast. We would have to give up the house, no more extracurriculars for the kid, and no trips home to see the family.
roamer65
(36,745 posts)You will be shocked at level of currency devaluation since 1982.
https://www.bls.gov/data/inflation_calculator.htm
Adjust the brackets however...but these rates need to come back to plug the budget hole.
Response to roamer65 (Original post)
Dave in VA This message was self-deleted by its author.
Scrivener7
(50,949 posts)urban people.
roamer65
(36,745 posts)Todays dollar is worth on 36 cents in 1982. Nearly 2/3 of purchasing power has been lost since then.
doc03
(35,332 posts)real estate taxes up and sales tax has doubled here. Reagan's cuts shifted the tax burden to the states.
JustAnotherGen
(31,823 posts)Doesn't account for state, local, property taxes.
kelly1mm
(4,733 posts)spouses did not work out of the home.
WarGamer
(12,440 posts)Replace 39.6 (currently 37%) with 50%
Keep write-offs as they are today, NOT like it was in the 70's...
Wealth tax and "per transaction" Wall Street tax... oh and tax Capital Gains as normal income.
And a .01% VAT tax for 10 years to help pay for C19 expenses
roamer65
(36,745 posts)Aka National Sales Tax.
Exclude necessities.
WarGamer
(12,440 posts)C19 cost the country at least $4T, probably $6T by the time we're through it...
Time to pay the bills... with the rich shouldering most of it.
roamer65
(36,745 posts)Luxury items should have a higher rate...near double.
JHB
(37,160 posts)...should be open for debate. The main goal is reversing what the 80s ushered in, that the highest virtue was shooting money skyward -- as much as possible, as fast as possible, as high as possible. Even with all the loopholes that let the well-off and wealthy avoid paying the top rates, the old high-level brackets put a damper in that upward geyser (and many of the loopholes still helped push money outward rather than upward). It was the 80s tax cuts and other policies that removed that damper and eliminated drawbacks to grabbing for every last dollar.
Back during the centennial of the Income Tax in 2013, the Tax Foundation put out a spreadsheet of historical tax rates (in both original and inflation-adjusted terms). Since "Is $250K/year 'rich'?" was still making the rounds in tax discussions (or blather, from some sources) and I know things had been very different pre-Reagan, I crunched some numbers and wound up focusing on the number and spread of brackets rather than the rates themselves.
For instance, here's the distribution of brackets from 1942 to 2013 (using 'married couple filing jointly' inflation-adjusted data):
I used 1942 as a start because in inflation-adjusted numbers spiked so far upward before then (and even more just before the Roosevelt administration but quickly came back to a less-astronomical top bracket boundary) that I would have needed to build a "skip" in the graph, and my Excel skills weren't up to that.
The compression of rates as you move forward in time is how inflation shows up in the inflation-adjusted numbers, and you can see when various tax reform efforts changed things. It wasn't until the mid-80s that tax brackets indexed to inflation and stayed relatively steady across years.
But look how far up the income spectrum those past brackets ran. To pick one year, "good old 1955" as the movie said, there were 24 brackets. Adjusted for inflation, 16 of them affected taxable income over $250K. Two thirds of all the brackets. 11 of those affected income over the equivalent of $500K. About 45% of the brackets. The top rate (91% that year) kicked in for taxable income over the equivalent of about $3.3 million.
Here's the yearly breakdown for total brackets vs number affecting inflation-adjusted income over $250K and $500K:
The reason I think raising awareness of these bracket spreads rather than the raw rates is because how it changes the framing and terms of the debate. Instead of going hammer and tongs over particular thresholds like $250K or $400K, it points up that there is a lot more room to maneuver. Historical bracket levels were wiped out in the 80s and have never returned. They should, even if the actual rates are open to debate.
roamer65
(36,745 posts)tinrobot
(10,899 posts)Most rich people don't make money off of W2 income. This would punish workers and professionals.
roamer65
(36,745 posts)But income beyond $10M, for instance, should be taxed at 45 pct rate at a minimum.