[ksen]

Ok, that’s a good illustration for capital gains . . . now do it again with marginal income tax rates. ;)

[ksen]

omg, please ignore my previous post. I thought I was in a different thread . . . carry on!

[Uncle Miltie]

No worries. It's still a good question, so I'll answer it:

Mainly, people modify how much they work, how hard they try to avoid taxes, and how they present their income to the tax man to achieve the same approximate effect for the Treasury.

Interestingly, I've polled all my friends about what a reasonable TOTAL TAX RATE is for all levels of government. The result is astounding. The more liberal someone is, the lower the rate they specify. My most liberal acquaintances say 10%, and my most conservative say 25%. The fact that it's around 40% is the horror.