re: #367 ggt

If one wants to consider fairness in the tax code, does it make sense for someone in the 30% bracket to pay closer 30% of their income*, while someone who would be in the 35% bracket pays 15% of their income*? From a dollar value - the person in the 35% bracket will still pay more, but as a percentage of their worth, it’s far less than someone in the lower bracket who pays a higher percentage of their income to tax.

Much of the distortion results from several tax laws - namely those on capital gains/interest, donations, and mortgage interest. At high income levels, capital gains/interest is the primary driver of income, and since it’s taxed at a much lower rate, the effective rates for those people is far lower than otherwise. It also reduces the effect of the noxious AMT, which is a bigger hassle than it’s worth and which requires a much more complex return (and should be eliminated and replaced by a more stringent top tax bracket indexed to inflation that allows few/no deductions, exemptions, or credits on say income* over $1 million).

* income includes wages, compensation, interest, capital gains, etc.