Comments for The NYT Doesn't Understand Marginal Tax Rates at http://www.cepr.net , comment 1 to 11 out of 11 comments http://www.cepr.net Tue, 18 Jun 2013 22:19:37 +0100 FeedCreator 1.7.3 http://www.cepr.net/index.php/blogs/beat-the-press/the-nyt-doesnt-understand-marginal-tax-rates#comment-8976 Why is it that liberal bloggers, who ought to have some modicum of understanding as to what a persuasive argument is, routinely fail to point out in the loudest and clearest terms that when we talk about people with taxable incomes of $250,000, we are talking about people who most likely "make" -- before exemptions, tax-exempt income and deductions -- somewhere between $400,000 and $500,000 a year??? Dean is guilty, as is Brad Delong, Mark Thoma, Paul Krugman and others who abjectly who let Republicans frame the argument on this issue. As others have wisely noted earlier, it's TAXABLE-FRICKIN'- INCOME that higher top marginal rates will apply to. You can't apply a rate to gross or adjusted gross income, and people with $250 K in taxable income are doing very, very, very well. - urban legend Mon, 16 May 2011 10:44:21 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/the-nyt-doesnt-understand-marginal-tax-rates#comment-8975 One thing that I rarely see mentioned in discussions of the "not rich" family making 250-400k in New York or San Francisco or whether living expenses are very high is that deductions tend to be greater for people living in exactly these areas. State and local Income taxes in Manhattan are very high, and these taxes are deducted from your federal taxable income. Real estate is incredibly expensive in these locations, and mortgage interest is... wait for it ... deductible. If I lived in NYC, and made enough to be comparably well off as now, I would expect to have taxable income around 1/2 or less of my gross. After mortgage and property tax payments on a condo/coop, state tax and local tax deductions. The plan Obama went in with 3 years ago, involved fixing the AMT so that families in the range discussed were much less likely to get hit with it. And for someone making 300k in a very high cost locale, it is much more likely that they heavy deductions cause them to pay AMT, than that their taxable income is over 250k. A plan that raised AMT thresholds but put in a 250k bracket of +3% would probably cause most of the people making 3-400k in expensive cities to *save* tax, not pay more. The people who would pay more are the people who are making that kind of money in cheaper places with fewer deductions. - Michael Sullivan Mon, 16 May 2011 09:55:00 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/the-nyt-doesnt-understand-marginal-tax-rates#comment-8950 I've listened to discussions of tax rates among colleagues, talk radio, read columns and such, watched politicians harangue. And it's almost always based on the ignorant or, quite commonly, falsified implication that once some limit is reached, the higher tax rate applies to the whole. I.e., 'if I make $500K then suddenly they're going to take 50% [or whatever the terror figure used] away! I might as well not work! I have no incentive for excellence!' If you point out how marginal tax rates work, and how they know this very well when they pay their own taxes, or they ought to, or if they have the slightest interest in looking something up, it's either dismissed as irrelevant or some sort of liberal misunderstanding. If you point out how many ways those who were once taxed at 90% marginal income avoided paying that amount, and why it made some sense to reform that number down while increasing collection, then it's still dismissed as robbing people who are successful. In fact, the current Congress and Republican politicians [b]oppose funding the IRS in making sure it's collecting from current taxes[/b]. You know, because it's simply immoral to collect income taxes from people with money, and it's probably better to ignore the whole idea that a government of the nation with the richest and largest economy ever known needs revenues, and just keep screaming about high taxes and deficits and debts. - El Cid Sun, 15 May 2011 10:47:41 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/the-nyt-doesnt-understand-marginal-tax-rates#comment-8947 Thanks for the correction. - jayackroyd Sun, 15 May 2011 09:34:47 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/the-nyt-doesnt-understand-marginal-tax-rates#comment-8946 I think downpuppy is on the right track. My situation isn't that different that said Mason (except I'm in NJ) and because of the AMT the expiration of the bush tax cuts is essentially moot. Basically if you are a homeowner in a high income/high property tax state and over the AMT thresholds the bush tax cut extension debate is irrelevant to you. - scottinnj Sun, 15 May 2011 09:12:30 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/the-nyt-doesnt-understand-marginal-tax-rates#comment-8945 Actually, there is a point to be made here. People earning $250,000 are clearly not in the same league with people earning $1 million. Those earning a $1 million are not in the same league as those earning $10 million, let alone more. It makes sense that there should be a series of progressively higher tax bracket. Perhaps that series should even start at $100,000. Yes, there certainly are examples of government spending that can be parred back. But when police officers in major cities are getting laid off as crime rises, and we cannot afford to help the sick, it's also clear that government does not have enough money. - techietype Sun, 15 May 2011 07:58:14 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/the-nyt-doesnt-understand-marginal-tax-rates#comment-8944 The mortgage interest & state tax deductions are between AGI & taxable income. The AGI might well be $262, but the taxable would be closer to $200k. So they'd most likely be in AMT, & the whole thing is even more pontless. - Downpuppy Sun, 15 May 2011 07:27:32 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/the-nyt-doesnt-understand-marginal-tax-rates#comment-8941 Math has a liberal bias. - - QuentinCompson, Negatory Sun, 15 May 2011 05:03:14 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/the-nyt-doesnt-understand-marginal-tax-rates#comment-8940 I love the comment in that story about how the "round" nature of $250,000 "suggests that it's arbitrary." Is there a non-arbitrary way to set tax brackets and tax rates? - Glenn Sun, 15 May 2011 04:55:21 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/the-nyt-doesnt-understand-marginal-tax-rates#comment-8939 Actually, since he's probably citing his gross, he'd have no tax increase. After the mortgage on the condo, and the three dependents, his AGI would be well under 250K - jayackroyd Sun, 15 May 2011 04:25:20 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/the-nyt-doesnt-understand-marginal-tax-rates#comment-8937 Mason can't get to a sporting event for under $400 any longer. - fuller schmidt Sun, 15 May 2011 03:48:13 +0100