Since this is now a political board I can't help but pose this question for the board: Right now under current federal tax law, a self employed small business person with $50,000 taxable income pays federal income tax of $8694 and self employment tax of $9023 and state tax of $4500 depending on the state. The effective tax rate is 44.4%. Now take a trust fund baby with the same taxable income of $50,000 generated by dividends and stock sales. The trust fund baby pays federal income tax of $2408, self employment tax of $0 and state tax of $3546. The effective tax rate is 11.9%. Our tax policy is obviously designed to foster investment in publicly held companies. Here is the question: Should our nation's tax policy encourage earning a living by the sweat of your brow or should our tax policy encourage investment?
Tax Policy
- Thread starter BJN
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knabe
Well-known member
BJN said:
neither. that would be what is called discrimination. trust funds usually last one generation and overtaxing them still would not be enough revenge for some people.
there should be no discrimination on taxing revenue. no exemptions for capital expenses, increasing headcount, hiring minorities, nothing.
