Re: Why I Pay Too Much in Taxes

[jim bell <jimbell@pacifier.com>]

At 09:30 PM 5/7/96 -0400, Black Unicorn wrote:
>On Tue, 7 May 1996, jim bell wrote:
>
>> At 04:46 PM 5/7/96 -0400, 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.
>> 
>> You seem to be forgetting that one of the provisions of (I believe) the 1986 
>> tax act was that capital gains would be indexed  for inflation.  However, 
>> the sleazy politicians only scheduled it (the indexing process) for about 
>> 1990 or so, and by 1990 they managed to get that idiot Bush to agree to drop 
>> it.
>
>Considering that there is one bracket for capital gains income (namely
>28%) what does this have to do with bouncing you into the next income tax
>bracket?

Well, you can play all the word-games you want, but many people use the term 
"tax bracket" to mean the amount of tax they pay as a proportion of income.  
(Too bad the IRS hasn't yet defined the term "income"!)    Since 
inflationary gains on assets shouldn't be counted as "income" at all, people 
end up paying a larger proportion of their income as taxes due to this.  Go 
ahead, play games, but ultimately the amount they write on the check will be 
increased as a result of inflation.  I doubt whether they would be in any 
mood to accept a picky technical definition.

It is these people that will eventually decide that it's better to pay money 
to go to government employees' detriment, rather than benefit.




Jim Bell
jimbell@pacifier.com