Re: Why I Pay Too Much in Taxes

[tcmay@got.net (Timothy C. May)]

At 8:46 PM 5/7/96, Black Unicorn wrote:

>I'm not sure I understand what you mean.  I sent the text of the law to
>the list.  The position that you take (that increse in inflation can send
>you into the next tax bracket) is incorrect.

I wrote my comment before I saw your message. Does this make it clearer?

I agree that the fewer brackets have lessened the problem in the last
couple of years, but, then, inflation has not been an issue in the last
couple of years. (I seem to recall an explicit statement that the brackets
would not be adjusted upward, as the bill called for, because the inflation
rate had been below the threshold....).

In any case, my larger point has been about the effect over the last decade
or so, where significant numbers of people are now up at the 40-45%
marginal tax rate (Federal plus state, in many states).

...
>Rates will not change with respect to inflation (to the extent that
>inflation is accurately measured by the CPI).
>
>I believe an exception was made for the top bracket in 1994, but I don't
>recall how it was implemented.

The top marginal rate was increased. As I recall, from around 38% to around 42%.

(As the money runs out, as the so-called trust funds turn out to be empty,
as "entitlements" expand, and as more and more people are too
poorly-educated and -motivated to succeed in high-paying jobs, I expect the
top marginal rate to continue to be ratcheted upward. Until other forces
come into play, of course.)


--Tim May

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