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Originally Posted by Fern
So maybe the lowest, or 1st tier, could be for households making less than $30,000 a year.
The middle tier would be where the vast majority of middle income people fell, while the upper tier would be for those making over $100,000 a year.
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if you allowed an exemption of say $30,000 and taxed everything above that at 40%, then that would automatically be a progressive tax - if you made $40,000 you'd pay $4,000 in taxes (effective rate 10%), if you made $100,000 you'd pay $28,000 (effective rate 28%), and if you made $1,000,000 you'd pay $388,000 (effective rate 38.8%). I'm not suggesting those rates are what people should pay. however, if one worked things right, you could make a flat tax progressive (ie rich pay more), as well as reduce bureaucracy. someone brighter than I would have to crunch the numbers to see how it could be done.
what I think is a good article on the subject was published in Forbes Magazine (of all places):
http://www.forbes.com/finance/free_f.../1017/042.html