Posted on 07/13/2012 5:03:34 AM PDT by from occupied ga
The math is a bit prolific for one off-topic post on this thread.
Point was that to hit someone with an Obama-suggested tax increase will encourage that taxpayer to work less, resulting in much less of a revenue increase than planned. Hit someone with a tax increase equaling a week of unpaid vacation, and instead of working an extra week to maintain the same net income he may very well decide to take an additional week of vacation, which in high tax brackets (example was $0.5M/yr) cuts the expected tax revenue by 40%.
It’s a variant of my main point on your TSPLOST threads: the “one cent” tax increase will cost me the equivalent of a replacement (used) car ... now, do I take MARTA instead (as socially engineered to)? or do I take FUKITOL and do something that will deprive the state of that revenue?
I’m developing a headache. Pardons if I don’t develop these points more. :-)
The tax brackets are a bit more complex, applying at different percentages (ex.: everyone, no matter how rich, pays 10% on the first $17,000 income). The roughly 4-point increase to the over-$250K brackets are calculated at netting the feds an extra $9560 revenue on a guy making $10,000/week. Annoyed that he’d have to work an extra week to cover that higher tax payment, he may very well decide to just take an extra week off without pay, reducing his annual income by $10,000 and reducing feds’ net revenue increase to just $5600 ... a 40% decrease in expected federal revenue increase.
It’s a variant of “going Galt”: instead of paying increased taxes, our rich guy making a half-million a year might decide to take half a month of unpaid vacation, which results in the feds not getting any more money (and the economy suffering reduced productivity).
Likewise, realizing that TSPLOST is going to cost me the price of a car, I may very well decide to make a fundamental change in spending which will reduce those taxes. Pushing people to the “had enough” point can have unintended consequences.
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