Never understood the idea of tax brackets. Why isn’t it just continuous? Computers are calculating the tax now anyway, not like it would be infeasible.
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.
Tax brackets are there for progressive taxation. Progressive income taxation is the most fair form of taxation. The least fair is consumption tax - such as sales tax. Sales tax tax disproportionately burdens lower income households. Since most places have sales tax, an aggressive progression of income taxation is called for to balance the scales.
I’m not speaking against progressive taxation, I’m saying the brackets should be continuous so there aren’t any sharp turns in taxation. Right now the brackets make the taxation discrete, but I feel it should be continuous.
Never understood the idea of tax brackets. Why isn’t it just continuous? Computers are calculating the tax now anyway, not like it would be infeasible.
Could totally do a sigmoid function and just integrate over the income. But the brackets are just discrete approximation of that.
You still have brackets, but they’re at every $0.01
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.
Tax brackets are there for progressive taxation. Progressive income taxation is the most fair form of taxation. The least fair is consumption tax - such as sales tax. Sales tax tax disproportionately burdens lower income households. Since most places have sales tax, an aggressive progression of income taxation is called for to balance the scales.
I’m not speaking against progressive taxation, I’m saying the brackets should be continuous so there aren’t any sharp turns in taxation. Right now the brackets make the taxation discrete, but I feel it should be continuous.
Oh I see. Well, you gotta understand the public don’t take too kindly to math. Especially politicians.