I mean to a degree it is continuous. To simplify things the first $10 you make isn’t taxed. $11 to $15 is taxed at rate A, $16 to $20 is taxed at rate B, etc. This is what is meant by the progressive tax system. Obviously these numbers are much higher in reality.
People who can’t understand this are the ones bragging that they turned down a raise because it would “change their tax bracket”. With one exception at very low income, called the benefits cliff, the more money you are paid the more money you take home after taxes.
Does this make tax brackets less confusing? I want to help you and anyone else reading to understand.
I think what they’re saying is that it shouldn’t be in steps, the tax rate should increase as income increases.
So $11 would be taxed at A.2, $12 at A.4, $13 at A.6 and so on. And $11.50 at A.3.
As it is, it’s more discrete than continuous (from a mathematical perspective). Another problem is that it usually stops. Like where I live, and it tops out at about $250,000.
Yeah I get what they mean but that’s much more complex. I suppose that’s what computers are for but it could make it even harder for people to understand and so many people do not understand the current system.
Definitely agree we need more brackets after the top one. Although this only goes so far, as the more wealthy a person is the more likely their income isn’t classified as income anymore. I’d love to return to post WW2 tax rates on the rich but we need to do something to make them pay some kind of fair share. It’s disgusting what they get away with.
I mean to a degree it is continuous. To simplify things the first $10 you make isn’t taxed. $11 to $15 is taxed at rate A, $16 to $20 is taxed at rate B, etc. This is what is meant by the progressive tax system. Obviously these numbers are much higher in reality.
People who can’t understand this are the ones bragging that they turned down a raise because it would “change their tax bracket”. With one exception at very low income, called the benefits cliff, the more money you are paid the more money you take home after taxes.
Does this make tax brackets less confusing? I want to help you and anyone else reading to understand.
I think what they’re saying is that it shouldn’t be in steps, the tax rate should increase as income increases.
So $11 would be taxed at A.2, $12 at A.4, $13 at A.6 and so on. And $11.50 at A.3.
As it is, it’s more discrete than continuous (from a mathematical perspective). Another problem is that it usually stops. Like where I live, and it tops out at about $250,000.
Yeah I get what they mean but that’s much more complex. I suppose that’s what computers are for but it could make it even harder for people to understand and so many people do not understand the current system.
Definitely agree we need more brackets after the top one. Although this only goes so far, as the more wealthy a person is the more likely their income isn’t classified as income anymore. I’d love to return to post WW2 tax rates on the rich but we need to do something to make them pay some kind of fair share. It’s disgusting what they get away with.
You are just saying “have 1000 or 1m tax brackets” instead of 5. It is not super different other than being more complex.