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Originally Posted by tgavin71
I wish we had a flat tax rate. Many times when overtime is done the dreaded bracket creep kicks in. It is ridiculous that people who work hard get penalised.
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This perspective indicates a fundamental misunderstanding of the tax system. We have a progressive income tax not to 'penalize' the wealthier incomes, but to prevent the lower incomes from being penalized. A single-rate flat tax would have to be 35% to 40% to be revenue neutral to where we were in 2000. That level of taxation would bankrupt the Middle-class and worse for the Working-Poor. Therefore, the only manner in which to provide realistic tax rate levels for the lower incomes is to raise them on the higher incomes, which by the way is where the bulk of the income exists.
A simple solution to your "
dreaded bracket creep" would be lots of incremental brackets as they used to have instead of just a few large jumps in rates.
Again, "flat" is not limited by a single rate.
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