Tax-cutting Dems?

[Spiffor]

And the problem is?

[Kuciwalker]

At some point it would apply to pretty much 100% of people. It seems fairly clear to me that this doesn't make sense.

[KrazyHorse]

Originally posted by Kuciwalker
Because otherwise the tax applies to an ever-increasing proportion of people.

Not necessarily, son.

[Kuciwalker]

Granted, a corresponding change in the income distribution would avert that. But you'd have to have all the real income growth account for by the people already paying the tax.

[KrazyHorse]

Originally posted by Kuciwalker
Granted, a corresponding change in the income distribution would avert that. But you'd have to have all the real income growth account for by the people already paying the tax.

Given that the bottom 80% of the population is basically seeing 0 real income growth currently I don't think that's all that implausible.

[Spiffor]

Originally posted by Kuciwalker
At some point it would apply to pretty much 100% of people. It seems fairly clear to me that this doesn't make sense.

If they're rich enough, then why the hell not?

As a rule, any westerner gets much more taxed than in the middle ages, yet the burden is not nearly as unbearable as it used to be, because we're also much richer.

If everybody gets rich enough that their real income warrants being extra taxed, then by all means, it's all right

[Kuciwalker]

Given that the bottom 80% of the population is basically seeing 0 real income growth currently I don't think that's all that implausible.

I believe it's time for AS or DanS to point out that the CPI typically overstates inflation by 1%, which would mean that 80% actually sees ~1% real income growth.

[KrazyHorse]

Do I need to explain to you why, if we were to index AMT to CPI inflation (which is the most likely scenario), that objection would be irrelevant?

[Kuciwalker]

Only as long as the real income growth of those 80% stays at 1%.

IMO it would be better to design the system to accommodate changing economic conditions than not.

[KrazyHorse]

Indexing to the nominal income wouldn't necessarily account for changing economic conditions either.

It simply guarantees that the same percentage of people pay the AMT. If income distribution changes, that's not necessarily the optimum solution.

[Kuciwalker]

True.

[Arrian]

The AMT just seems unecessarily complicated, and that's my main problem with it. Also, indexing to inflation (or whatever index is most appropriate) would seem to make sense.

-Arrian