So let's talk about marginal tax rates, especially with the discussion going on now. Note this is a hypothetical example with simple numbers to make it easy to understand and explain. Let's say Bubba earns $10 million dollars a year. There are two tax rates: 20% for all income up to $1 million dollars, and 70% for everything over $1 million. Bubba's first million is taxed at 20%. But the remaining $9 million is taxed at 70%, which means he is paying $6.3 million in taxes on that income. Adding that to the taxes he pays at the lower rate means he is paying 65% of his income in taxes.
When does taxation become theft?
When does taxation become theft?
When does taxation become theft?
So let's talk about marginal tax rates, especially with the discussion going on now. Note this is a hypothetical example with simple numbers to make it easy to understand and explain. Let's say Bubba earns $10 million dollars a year. There are two tax rates: 20% for all income up to $1 million dollars, and 70% for everything over $1 million. Bubba's first million is taxed at 20%. But the remaining $9 million is taxed at 70%, which means he is paying $6.3 million in taxes on that income. Adding that to the taxes he pays at the lower rate means he is paying 65% of his income in taxes.