For 2008, the Federal tax brackets for a single (unmarried) person are:
This applies only to amounts above $8,950 (standard deduction of $5,450 plus the one personal exemption of $3,500) for an individual. For example, a single individual would actually pay:
For 2008, The value of each personal and dependency exemption, available to most taxpayers, is $3,500, up $100 from 2007. The new standard deduction is $10,900 for married couples filing a joint return (up $200), $5,450 for singles and married individuals filing separately (up $100) and $8,000 for heads of household (up $150). Nearly two out of three taxpayers take the standard deduction, rather than itemizing deductions, such as mortgage interest, charitable contributions and state and local taxes. |
That is the current setup. What is needed is to add more brackets to income tax and tax each at progressively higher steps.
For instance
- 10%: from $0 to $8,025
- 15%: from $8,026 to $32,550
- 25%: from $32,551 to $78,850
- 28%: from $78,851 to $164,550
- 40%: from $164,551 to $350,000
- 44%: from $350,001 to $700,000
- 48%: from $700,001 to $1,400,000
- 52%: from $1,400,001 to $3,000,000
- 54%: from $3,000,001 to $6,000,000
- 58%: from $6,000,001 to $12,000,000
- 62%: $12,000,000 and above
Keep the deductions the same and also increase capital gains tax in similar ways. I see zero reason to have capital gains tax be less than income tax, if anything it should be more.
This would place the burden squarely on those who put is in this mess. I might point out that the top bracket for income tax is quite low considering the US's history and the number of brackets we have now is also low (see chart below). I am not sure how much more money this would raise, but it would redistribute the wealth. We do not need dynasties, they are not conducive to a democracy.
| Partial History of U.S. Federal Income Tax Rates Since 1913 | ||||
|---|---|---|---|---|
| Applicable Year | Income brackets | First bracket | Top bracket | Source |
| 1913-1915 | - | 1% | 7% | Census |
| 1916 | - | 2% | 15% | Census |
| 1917 | - | 2% | 67% | Census |
| 1918 | - | 6% | 73% | Census |
| 1919-1920 | - | 4% | 73% | Census |
| 1921 | - | 4% | 73% | Census |
| 1922 | - | 4% | 56% | Census |
| 1923 | - | 3% | 56% | Census |
| 1924 | - | 1.5% | 46% | Census |
| 1925-1928 | - | 1.5% | 25% | Census |
| 1929 | - | 0.375% | 24% | Census |
| 1930-1931 | - | 1.125% | 25% | Census |
| 1932-1933 | - | 4% | 63% | Census |
| 1934-1935 | - | 4% | 63% | Census |
| 1936-1939 | - | 4% | 79% | Census |
| 1940 | - | 4.4% | 81.1% | Census |
| 1941 | - | 10% | 81% | Census |
| 1942-1943 | - | 19% | 88% | Census |
| 1944-1945 | - | 23% | 94% | Census |
| 1946-1947 | - | 19% | 86.45% | Census |
| 1948-1949 | - | 16.6% | 82.13% | Census |
| 1950 | - | 17.4% | 84.36% | Census |
| 1951 | - | 20.4% | 91% | Census |
| 1952-1953 | - | 22.2% | 92% | Census |
| 1954-1963 | - | 20% | 91% | Census |
| 1964 | - | 16% | 77% | Census |
| 1965-1967 | - | 14% | 70% | Census |
| 1968 | - | 14% | 75.25% | Census |
| 1969 | - | 14% | 77% | Census |
| 1970 | - | 14% | 71.75% | Census |
| 1971-1981 | 15 brackets | 14% | 70% | IRS |
| 1982-1986 | 12 brackets | 12% | 50% | IRS |
| 1987 | 5 brackets | 11% | 38.5% | IRS |
| 1988-1990 | 3 brackets | 15% | 33% | IRS |
| 1991-1992 | 3 brackets | 15% | 31% | IRS |
| 1993-2000 | 5 brackets | 15% | 39.6% | IRS |
| 2001 | 5 brackets | 15% | 39.1% | IRS |
| 2002 | 6 brackets | 10% | 38.6% | IRS |
| 2003-2008 | 6 brackets | 10% | 35% | IRS |
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