In article ,
Doug Miller wrote:

Nope those numbers are based on the AGI, which includes income from
all sources. It isn't until you get AGI that you start playing with the
different rates.

Sorry, but that's just not true. Income from long-term capital gains is taxed
at a different
[lower] rate than income from wages and salaries.

Let me try this one more time as I am obviously having problems
explaining it. My figures are taxes paid as a %age of AGI. AGI is all
income minus a few things every body takes off like deductions. What I
am quoting is looking at the bottom line and dividing that by AGI. It is
all of the various brackets and things like cap gains melted together,
the final taxes due computed and THEN divided by the AGI.


But SS and MCare have always been built on the model where you pay for
your benefits, not someone else's (allegedly anyway).

That "allegedly" is the key. The whole damn thing is a Ponzi scheme, everyone
knows it,
and if anybody other than the Federal government were running it, he would
have been
thrown in jail two generations ago.
I am hesitant to call it a Ponzi scheme. I view that as an insult to
Mr. Ponzi who did not send people armed with guns and asset seizure
orders to get his investors.



The cutoff for
payroll taxes is exactly the cutoff for benefits. If I make a $1 million
dollars, I only get MCare based on the cutoff point.

That's not relevant to the point that higher earners have a lower effective
tax rate.
We'll have to agree to disagree on this one. I view SS and MCare as
money going to a specific program and thus I'll get it back (albeit at a
VERY low rate of return.

If your income is entirely from investments, regardless of the amount, you
pay NOTHING in
these taxes.
And you get nothing in return.


Oh, and by the way... if you're self-employed, you pay double.

Everybody pays double. To say otherwise is to pretend that the employer
doesn't look at all employee-related expense when deciding what to a job
is worth to them.

Also, as I point out, the very lowest tax brackets have Earned
Income and Child Care Credits and other such things which means they get
money back over and above any withholding tax refunds. IRS figures
clearly show that the bottom quintile STILL has a negative effective tax
rate even after payroll taxes and the second one pays a very low rate.

So do you contend that this income redistribution scheme is a good thing?
I am less hesitant than others specifically because it very nicely (I'll
leave the efficiency part to others) addresses some of the progressivity
issues you are bringing up.



And I have a *major* problem with someone whose income from capital gains far
exceeds
my income from salary paying a lower rate than I do.

Why, other than it offends you? (serious question, honest)

--
People thought cybersex was a safe alternative,
until patients started presenting with sexually
acquired carpal tunnel syndrome.-Howard Berkowitz