Top marginal tax rate in US now ~65%

[Kidlicious]

$4 trillion added to deficit as a result of the fiscal cliff deal.

Even the title of that article is misleading. It should have read "$4 trillion in DEBT added over ten years." But no one knows what the deficit will be in 10 years. Those are simply projections.

[Kidlicious]

Do any of the US posters have an idea what their fellow citisens think of the US tax system.
From what I know you have a ridiculous system in place that should not appeal to anyone but for some reason there seems to be no preasure on the politicians to actually do something about it.

USians don't like taxes, period. You will never please them with any tax code.

[Kidlicious]

Or not really..

The truth is that the CBO warned that ending the Bush tax cuts and automatic spending cuts would put the economy back in recession, but I guess some thought that would be good for our grandchildren.

[DinoDoc]

Or not really..

The deal is devoid of any substantive spending cuts and indeed includes additional spending. Why should it get any deficit-reduction credit at all?

[Guynemer]

USians don't like taxes, period. You will never please them with any tax code.

Our country was founded by tax-dodging rich men. What else would you expect?

[kentonio]

The deal is devoid of any substantive spending cuts and indeed includes additional spending. Why should it get any deficit-reduction credit at all?

Because it raises revenue, you know the half of the deficit reducing equation you lot like to pretend doesn't exist.

[Robert]

For a married couple living in NYC earning about 360k a year agi

The whole range from 300k to 400k is above 60%

Based on 33-35% federal marginal rates, 10% state+local, 3.8% medicare tax, and phaseouts for personal exemptions and itemized deductions. Could be even higher if they have a mortgage.

35% + 10% + 3.8% = >65%?
please elaborate for clueless european.

[Kidlicious]

I think it's some supply side thinking.

[MikeH]

The numbers seem nice and low for you.

I pay 40% on earnings above £32k and 50% on anything I would earn above £150k (though that's dropping to 45% in april).
+ 12-14% national insurance
+ 20% sales tax on most things.
+ vast additional duties on fuel, booze etc.

[Imran Siddiqui]

The deal also put in place a tax cut for those making under $400,000. So of course that isn't going to be good for the deficit.

[Kidlicious]

It wasn't really meant to balance the budget. It was meant to avoid the fiscal cliff, and a recession.

[giblets]

Because it raises revenue, you know the half of the deficit reducing equation you lot like to pretend doesn't exist.

Like Ben Kenobi he's probably living in a fantasy land where raising tax rates doesn't raise revenue.

[DinoDoc]

Because it raises revenue, you know the half of the deficit reducing equation you lot like to pretend doesn't exist.

When in the history of the American Republic has an increase in taxes been used for anything other than more spending?

[Kidlicious]

When in the history of the American Republic has an increase in taxes been used for anything other than more spending?

Be fair. For a good part of that history, many of us were slaves and we had our masters to provide all of our needs for us.

[MichaeltheGreat]

Broaden the base, lower the rates. And get rid of all capital gains taxes.

A majority of capital gains are essentially non-job creating transactions between asset owners. The only jobs created are for the brokers, the caddies for the CPA firm partners, and the guy in India who does the actual accounting work for the CPA firm. Capital gains are also used in conjunction with repeated use of accelerated depreciation to manipulate ordinary income into deferred capital gains.

Case in point, I'm working on a transaction involving a couple of existing powerplants with a lot of time remaining on their power purchase agreements. After purchase, they'll have minimal capital improvements to convert them to combined heat & power, which will change the core plant from 20 year depreciation to 5 year. On the whole plant, not just the capital improvements, all with a new placed in service date as of the re-start. Tax depreciation will offset all operating income, with a little pass through on top, then the buyer will flip the assets and take a capital gains hit at the end, after paying nothing in income taxes for five years. The next buyer will do the same. Then the next. The first set of buyers will create about zero net jobs (most of operating crews will be laid off during capital improvement program, so this will offset creation of construction jobs.) Subsequent buyers will create zero jobs as well, as the same crews will operate. At the end of the process, 15 years of profitable operating income will be taxed at lower capital gains rates after one to five year deferrals when the asset is resold. Who exactly benefits from this sort of tax subsidy game?