this post was submitted on 29 Oct 2024
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No Stupid Questions

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I’m looking for serious answers to understand the mentality. Please avoid the snark. I know it’s low hanging and tempting but I’m pretty sure most, if not all, of use here on Lemmy “get it”.

I just can’t get out of my head how absurd it is that we, in the U.S. anyway, put so much of the tax burden on working class folks instead of those most benefiting from our economic system.

It seems to me the standard deduction should be at least the median personal income (~$40k) if not the mean(~$60k) with progressive tax brackets adjusted to cover costs thereafter and possibly a supplemental wealth tax.

But I’m not an economist so trying to understand why I’m wildly wrong and this would be a terrible idea either from an economic perspective or from a political perspective.

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[–] scarabic@lemmy.world 6 points 1 month ago* (last edited 1 month ago) (2 children)

The standard deduction should be at least the median income…? Wouldn’t that mean that half of people would pay no income tax?

You might say this is what we should do, but I think it’s far from obvious.

If you earn $40k and the first $13k is untaxed, then you’re paying no taxes on about the first third of your income. And from there you begin paying in the lowest bracket.

If you make $100k, and the first $13k is untaxed, that’s the first 13% of your income, not 33%. And some of your income will be taxed at levels higher than anything the $40k earner pays. I just fail to see how this is placing the burden on the poor. It Is structured to do the exact opposite and give them the most breaks.

The fact that there’s one standard deduction for the whole country is insane, since $13k means something extremely different in different places.

But across the board I’d probably agree that the floor on the deduction should come up, and we should raise taxes on extreme wealth to make it up. But at least in its most essential form, income tax is already progressive.

So I don’t really get your question. But who am I fooling? I’m going to be downvoted into oblivion for going against the popular narrative on this.

[–] prole@lemmy.blahaj.zone 1 points 1 month ago* (last edited 1 month ago) (1 children)

Going against the popular narrative? What would that be, that progressive tax brackets are the very fucking least we can do (and is clearly not enough)?

[–] scarabic@lemmy.world 2 points 1 month ago* (last edited 1 month ago)

No man read the top dozen voted root comments and you will see the narrative: rich people are using their political access to fuck you and get richer. The OP doesn’t even acknowledge progressive tax brackets. The entire system apparently is specifically designed to direct money out of starving people into the super wealthy. That’s the narrative. It’s right up there with “CEOs don’t do anything” and “you shouldn’t recycle because it’s just a scam cooked up by Big Plastic.” It’s actually hard to be a good liberal when those around me are dripping with this kind of horseshit nonstop.

[–] ccunning@lemmy.world 0 points 1 month ago (2 children)

The standard deduction should be at least the median income…? Wouldn’t that mean that half of people would pay no income tax?

Half or more depending on mean or median. But that’s just a starting point for the discussion.

You might say this is what we should do, but I think it’s unreasonable to say that it’s a total head scratcher why we don’t already.

That’s not what I was intending to ask. Sorry if I phrased it poorly. I’m trying to understand the arguments against it because it’s what makes sense to me.

I just fail to see how this is placing the burden on the poor. It Is structured to do the exact opposite and give them the most breaks.

I think the logical thing is to have those who most benefit from the infrastructure our taxes pay for be the ones who contribute the most. And those that are seeing the least benefit be exempt.

I’d probably agree that the floor on the deduction should come up, and we should raise taxes on extreme wealth to make it up. But at least in its most essential form, income tax is already progressive.

This is almost exactly what I suggested. I think we’re basically on the same page.

[–] scarabic@lemmy.world 3 points 1 month ago (1 children)

Yeah I think we may only differ on degree, and yes some of my confusion about your post came from phrasing. There are still some phrasing points I’m struggling on.

I think the logical thing is to have those who most benefit from the infrastructure our taxes pay for

The poor benefit from roads, schools, firefighters, Medical/Medicaid, and utilities as much as anyone. But I think you had the super wealthy in mind. “Those who benefit from infrastructure” is an odd way to pinpoint the super wealthy.

be the ones who contribute the most.

This part is already true. Progressive tax brackets have them contributing the most as a proportion of pay, and far and away the most in absolute numbers.

And those that are seeing the least benefit be exempt.

The entire lower 50-60% of the economy is an extremely inclusive notion of “those who benefit the least.”

Again, phrasing.

[–] ccunning@lemmy.world 2 points 1 month ago

I think the logical thing is to have those who most benefit from the infrastructure our taxes pay for

The poor benefit from roads, schools, firefighters, Medical/Medicaid, and utilities as much as anyone. But I think you had the super wealthy in mind. “Those who benefit from infrastructure” is an odd way to pinpoint the super wealthy.

Those who “most benefit” would be those who have been able to leverage the infrastructure and security provided to profit wildly. Not those who are just scraping by.

I think we do agree on all but degree like you said. And maybe mean/median income is too high. I was just trying to come up with a somewhat natural but objective breaking point. I think a more reasonable but also more subjective one might be the “living wage” which will certainly be much lower than mean/median but also much higher than $13k.

P.S. Tangentially related, I found this living wage calculator which put my current LCOL residence at ~$42k and my previous HCOL residence at ~$57k. Turned out to be much closer to Mean/median than I expected.

[–] orcrist@lemm.ee 3 points 1 month ago

I think you need to take a step back and stop talking about income tax. Instead, talk about wealth distribution overall. What about businesses? What about corporations? What about passive income? What about savings that's passed to children? What about inheritance tax? What about tax fraud and tax evasion? And I meant to separate those explicitly, because there are many weak points in the tax code that allow for companies to take advantage of the ability to send money overseas, for example.

If all you're doing is adjusting the standard deduction or the base exemption or the top threshold for social security payments, you're ignoring the gigantic high-dollar figures that are happening with the billionaires and the largest corporations in the world. And if you ignore them, then there's no way you can fix the corruption that's plaguing modern society.

Of course I think you were trying to keep your focus narrow, which is a reasonable thing to do, but it's also worth noting in at least one comment that the big picture involves much more important questions about how we should allow wealth to be redistributed.