State Senate votes to ban income tax in Tennessee
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03-14-2011, 11:49 PM
Join Date: Aug 2007
nice topic, kudos to all who have posted sensibly on both sides so this thread doesnt get closed/deleted.
Im from KY so I dont have a dog in this specific fight, but I do want to make a comment about a progressive income tax(meaning, a higher percentage is taken from higher incomes)
regardless of whether you believe a progressive tax is "fair"(which is a point of debate and by no means a "settled" question) it is absolutely a fact that a progressive tax is a disincentive to working harder and earning more.
For instance, if your family income is $69,000 or less, your federal tax rate is $15%, and you would owe $10,350 in taxes, for an net income of $58,650 . However if you busted your butt and made an extra $5,000, your $74,000 income would be taxed at 25% and thus you would owe $18,500 in taxes for a net income of $55,500.
How crazy is that??
A flat tax rate would not be a disincentive to productivity. A slightly less attractive alternative is a progressive tax but the higher rate only applies to the dollars in the bracket itself, Thus in the example above the taxpayer would pay 15% of the $69,000 and then pay 25% of the extra 5K. Its not perfect, but it doesnt go back and take more from the first dollar
looking forward to other comments on this
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