Inequality is obviously bad for social order because perception of inequality breeds discontent. You notice if your neighbor is much better off than you, and this pisses you off. What your income is in absolute terms makes far less difference than its size in relative terms. It's the status monster all over again.
The US has a ridiculous tax-system where income from capital is taxed at lower rates than labor income. Since only the very rich get most of their income from accrued capital, the effective tax-rate as a percentage of total income falls for the highest earners in the US (when looking at all forms of income combined). In addition there is a fat gross-tax on labor income called the Pay-roll tax which used to be about 13 percent but has been temporarily reduced - probably the dumbest idea ever, but that is characteristic of this administration's policies (even dumber than Bush, which is saying something). But the pay-roll tax as a share of income DECREASES the more you earn (above USD110,000 or so). How fucked up is that? All it does is make labor more expensive - same as you issued bonds at a price below par.
This is sub-optimal, because the US has very high marginal rates on labor income already. 35%, when added to state and local taxes, is a very HIGH marginal tax rate and is paid mostly by small businesses, the main job creators, who also have to waste 50bn a year on tax-lawyers to navigate the hellish tax-code our leaders, least of all the current administration, are unwilling to fundamentally reform. So the ones who can least afford to dabble with the bureaucracy are the ones who have to pay the most - congrats my friend, this is what more regulation means in practice. We're setting up a game where the rulebook is so complicated you have to pay someone to understand what's going on, instead of using that money to create more value. In that system, only the biggest banks come out on top.
In effect, the US tax system is not very progressive - even if the marginal rates are among the most progressive in the world. In practice, our tax-system is in fact REGRESSIVE. Not even fucking flat. But Obama the idiot can't stop yapping about the top marginal rates. What a fucktard.
You could lower US taxes to gross tax rates on all income at levels of 12, 18 and 28 percent financed by removing tax-breaks and deductions, and generate MORE revenue than you're doing today while increasing every worker's after-tax income.
The US has a ridiculous tax-system where income from capital is taxed at lower rates than labor income. Since only the very rich get most of their income from accrued capital, the effective tax-rate as a percentage of total income falls for the highest earners in the US (when looking at all forms of income combined). In addition there is a fat gross-tax on labor income called the Pay-roll tax which used to be about 13 percent but has been temporarily reduced - probably the dumbest idea ever, but that is characteristic of this administration's policies (even dumber than Bush, which is saying something). But the pay-roll tax as a share of income DECREASES the more you earn (above USD110,000 or so). How fucked up is that? All it does is make labor more expensive - same as you issued bonds at a price below par.
This is sub-optimal, because the US has very high marginal rates on labor income already. 35%, when added to state and local taxes, is a very HIGH marginal tax rate and is paid mostly by small businesses, the main job creators, who also have to waste 50bn a year on tax-lawyers to navigate the hellish tax-code our leaders, least of all the current administration, are unwilling to fundamentally reform. So the ones who can least afford to dabble with the bureaucracy are the ones who have to pay the most - congrats my friend, this is what more regulation means in practice. We're setting up a game where the rulebook is so complicated you have to pay someone to understand what's going on, instead of using that money to create more value. In that system, only the biggest banks come out on top.
In effect, the US tax system is not very progressive - even if the marginal rates are among the most progressive in the world. In practice, our tax-system is in fact REGRESSIVE. Not even fucking flat. But Obama the idiot can't stop yapping about the top marginal rates. What a fucktard.
You could lower US taxes to gross tax rates on all income at levels of 12, 18 and 28 percent financed by removing tax-breaks and deductions, and generate MORE revenue than you're doing today while increasing every worker's after-tax income.
A year from now you'll wish you started today