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Originally posted by Timber Loftis:
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Originally posted by Davros:
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Originally posted by Timber Loftis:
[qb] One of the things that stifles success is prohibitive upper tax ranges on people trying to break into the upper income brackets. It also generates a massive industry in tax avoidace accounting. The good thing about a broad based consumption tax should be less fraud and less fraud industry.
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Well, the "fraud" industry is a fair statement. Though, if you can get a deduction and don't take it, isn't it your own failing?
Anyway, the misconception with the income tax that the upper tax ranges keep people from breaking in is wrong. Say you are in the 15% bracket and want a new job that will put you in the 20% bracket. Well, you only pay 20% on the amount ABOVE the 15% cutoff level. On the first dollars, then, everyone pays the same rate. You are only charged the higher rate on your dollars that exceed the lower cutoff.
Hope I didn't mistake your meaning with the comment. 
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I see where you are coming from, but I think we are talking from quite a different basis TL [img]smile.gif[/img] - our upper marginal bracket in Australia is 50%, so you can see how this can be an incentive killer. Every extra dollar I make goes half to me and half to Uncle Johnny. The shift towards a consumption tax a few years ago also increased the tax brackets, improving that ratio for many and has lowered the incentive to cheat the system.
LOL - that second sentence was spoken like a true lawyer - but yes, if I am due a deuction I take it [img]smile.gif[/img] - what I was referring to were all the shonky accounting schemes and shelves and shysters that people employ in the pursuit of avoiding paying tax.