The Marginal Tax Rates for the Common Man

The federal marginal tax rates have always been biased in favor of rich people. Why the rest of us put up with this inequity, boggles the mind. Poor people need to start chopping rich people down to size

If you click on this link, chart, you will see a chart with proportional marginal tax rates. You can download it and make your own changes if you want.

I know this proposal is a pipe dream but sometimes you just have to point out the truth in spite of the odds.

The Structure of the Chart

The chart lists annual taxable earnings ranges starting with $0 to $10,000. Each range is incremented by $10,000 up to $500,000. Then the ranges are incremented by $500,000 with the last range running from $5,500,000 to $10 billion. The earnings ranges should be based adjusted gross income but for comparison purposes I am using taxable earnings.

The pattern for the change in the marginal rates is a .75% increase for every increase of $10,000 in income up to $500,000.

The first range of $0 to $10,000 has a 0% tax rate.

Above $500,000 the rate increase is 5% for every $500,000 increase in income and for the last open-ended earnings range up to $10 billion.

The Left Side of the Chart and the Right Side

If you look at the left side of the chart, you will see the proposed tax rates and the max taxes for the top of each earnings range.

If you look at the right side of the chart, you will see the current tax rates and the max taxes for the top of each earnings range.

For example, the proposed rate for the $140,000-$150,000 range is 10.5% with a max tax of $7,875 on $150,000.

The current tax rate is 24% with a max tax of $28,800 on $150,000.

After tax income on the proposed marginal tax rates would be $142,125, while on the current marginal tax rates are $121,200.

The Upper Ranges

Even with this proportional approach, this scheme gives rich people a break. There is, however, much greater fairness with this method.

You will notice that all income ranges up to the $490,000-$500,000 range generate lower taxes than the current marginal rates but all the ranges above $5000,000 (the 1%) are subject to higher taxes.

It goes without saying that the 1% will fight to death to kill these types of marginal rates. It is up to the 99% to make them pay.

The 1% benefit enormously from living in America and they should pay for that benefit.