Re: Why I Pay Too Much in Taxes

[Black Unicorn <unicorn@schloss.li>]

On Mon, 6 May 1996, Timothy C. May wrote:

> By the way, as long as I've added another comment to this not-very-relevant
> thread (but one which has generated a lot of comments, so it's hard to hard
> folks aren't interested), I should mention that I left out the effects of
> INFLATION in my "60%" figure.

[...]

> Also, the effect of inflation has been to inflate salaries and thus inflate
> people into higher tax brackets, even when their "real wages" have not gone
> up.
> 
> If we ever get really bad inflation again (>10% per year, as we had in the
> late 70s, early 90s), or, God forbid, hyper-inflation, the tax system will
> likely not survive in anything near its current form.

Section 1(f) of the Federal Income Tax Code provides:

(f) Adjustments in Tax Tables so that Inflation Will Not Result in Tax
Increases.-

(1) In General.- Not later than December 15 of 1993, and each subsequent
calender year, the Secretary shall prescribe tables which shall apply in
lieu of the tables contained in [the tables which define the tax brackets]
with respect to taxable years beginning in the succeeding calander year.

(2) Method of prescribing tables.-  [The tables] shall be prescribed-

(A) by increasing the minimum and maximum dollar amounts for each rate
bracket for which a tax is imposed under such table by the cost-of-living
adjustment for such calender year,

(B) by not changing the rate applicable to any rate bracket as adjusted
under subparagraph (A), and

(C) by adjusting the amounts setting forth the tax to the extent necessary
to reflect the adjustments in the rate brackets.

[deletions]

This, at least, has been considered.

> 
> --Tim May
> 

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