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US Historical Income Tax Rates

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Re: US Historical Income Tax Rates

#71

Post by cplusplusfellow »

SpodGaju wrote: post #45

1950 Tax Rate - 91.0% > $400,000 The economy overall grew by 37% during the 1950s. At the end of the decade, the median American family had 30% more purchasing power than at the beginning. Inflation was minimal, in part because of Eisenhower's efforts to balance the federal budget. Unemployment remained low, about 4.5%.

The United States held the majority of the worlds factories and almost all of the ones that weren’t in a decimated war torn country.

It took nearly 20 years to rebuild Europe to the point that it could compete, and USSR was largely cut off from global supply in western worlds.

It’s not the same today and one cannot possibly assert with a straight face that we would enjoy a decade of 37% growth with those rates.

Re: US Historical Income Tax Rates

#72

Post by cplusplusfellow »

throwaway0a5e wrote: post #51
floren wrote: post #13

Earlier quoted context omitted.

Posters will now stumble over each other to assure you that tax evasion was so widespread that actually the effective tax rate was lower than Reagan's wildest dreams.

>Posters will now stumble over each other to assure you that tax evasion was so widespread Arranging your income to reduce the tax paid in accordance with the law isn't tax evasion.

I’m pretty sure the rationale given by current politicians for at-present proposals is that they are arranging their income to avoid taxes, and therefore they aren’t paying their “fair” share.

It’s nauseating but evasion (a legal term) and avoidance are taken as the same morally compromised position now.

Re: US Historical Income Tax Rates

#73

Post by giantg2 »

vmception wrote: post #69
giantg2 wrote: post #63

Earlier quoted context omitted.

I'm not sure that's true. They are only supposed to report on a 1099 if they know it's earned income, not just a transfer. If they're reporting mere transfers to the IRS, then that's a problem. That said, based on personal experience, I don't think Venmo is sending 1099s to everyone above that cumulative amount. I do believe they categorize transfers based on personal or commercial use. I expect a 1099 to be issued o…

Transaction is the word I use, not transfer, just in case you mentioned transfer for some other reason. My reason is deliberate. Some kinds of transactions are tax events, others aren’t. Venmo has no way of knowing. Anybody doing automated 1099s has no way of knowing. 1099s just tell the IRS to look for a tax filing from the same tax ID that matches.

That's sort of my point. If they don't know, they don't have to file one. You only need to file one if it's taxable. And I think this is all moot since I believe they differentiate between business and personal transactions, right?

Re: US Historical Income Tax Rates

#74

Post by giantg2 »

modeless wrote: post #65
giantg2 wrote: post #64

Earlier quoted context omitted.

"The people complaining about these loans have no idea how it actually works." Not that I'm one complaining about the loans, but so you have a link to how it works? I didn't mean they directly use it like that, which is why I mortgage in quotes. I thought there's a specific type of small corp the wealthy use to avoid/reduce taxes by going through a sort of conversion.

I explained how it works. Which part is unclear? How you get the loans? At the asset levels where you might consider the "buy, borrow, die" strategy, like $100m+, you can simply ask your banker or more likely your family office will do it for you.

Lol OK. How about a link then?

Re: US Historical Income Tax Rates

#75

Post by modeless »

giantg2 wrote: post #74
modeless wrote: post #65

Earlier quoted context omitted.

I explained how it works. Which part is unclear? How you get the loans? At the asset levels where you might consider the "buy, borrow, die" strategy, like $100m+, you can simply ask your banker or more likely your family office will do it for you.

Lol OK. How about a link then?

A link to what?

Re: US Historical Income Tax Rates

#77

Post by dane-pgp »

credit_guy wrote: post #39
floren wrote: post #13

Earlier quoted context omitted.

Posters will now stumble over each other to assure you that tax evasion was so widespread that actually the effective tax rate was lower than Reagan's wildest dreams.

All right, then I'll ask the other question. What do you consider "fair"? You don't say it, and the GP doesn't, but the implicit assertion is that the rich don't pay their "fair share", presumably because in some mythological past they used to pay 94%. What is then "fair"? 94% ? Do you have a formula? At least a principle. If I make $100 MM (I don't), should I pay 50%, 60%, 70%? I mean, even if I pay 99%, I still ret…

> Do you have a formula. At least a principle.

I have a formula and a principle. Anyone earning $100 MM or above should pay the same effective percentage as the median taxpayer... relative to their wealth.

The median US household has a net worth of $120k and pays about $10k in taxes each year. That equates to an 8% wealth tax.

If a billionaire has $1 MM in income one year, they could pay $2 MM in tax and not even notice, despite that being a 200% effective income tax rate. What matters, in terms of "fairness", is what that burden feels like, which is losing 0.2% of their wealth (assuming wealth of exactly $1000 MM). For the median household that would be like paying $240 in taxes.

Note that this doesn't even take into account the law of diminishing marginal returns, which states that the millionth dollar matters less to someone than their first dollar, so the millionth dollar should be taxed at a higher rate for the same hedonic burden.

Re: US Historical Income Tax Rates

#78

Post by CaptainNegative »

SomeHacker44 wrote: post #55
CaptainNegative wrote: post #35

Earlier quoted context omitted.

The key problem for After the standard deduction, the net income tax rate for a single filer making $20k is 3.75%. For a couple filing jointly it's 0 up through $25.5k/yr. In both cases, the EITC guarantees those with at least one child a (substantially) negative effective tax rate, while single child-free filers are left with about a 2.6% effective rate.

$20k x 2 >> $25.5k. Marriage penalty in action.

The post-deduction income tax rate for a MFJ household making $40k is also 3.75%. There are some examples of a marriage penalty -- and others of a marriage benefit -- but this isn't an example of either one of them.

Re: US Historical Income Tax Rates

#79

Post by hnburnsy »

antognini wrote: post #15
donatj wrote: post #4

I don't understand why we don't just not tax income below say $20k. It can't be a lot of money for the government even in aggregate, and it would make a huge difference in low income people's lives, arguably larger than any of the government programs their taxes are going to fund.

The rates presented are slightly misleading because it's not including the standard deduction. For a single individual in 2021, income below $12,550 is effectively not taxed (or $25,100 for married couples).

The tax brackets are always based on AGI, millions have an effective negative tax rate due to EITC.

Re: US Historical Income Tax Rates

#80

Post by modeless »

giantg2 wrote: post #76
modeless wrote: post #75

Earlier quoted context omitted.

A link to what?

A link to how the ultra wealthy access their money/stocks and reduce taxes.

There are plenty of articles you can find by googling buy borrow die, such as this one https://www.wsj.com/articles/buy-borrow-die-how-rich-america...
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