LGC 1.8 - the WEALTH Act - Passed

[AGA]

Let's take a look at the current tax policy in Lincoln and Atlasia. The top federal income tax rate is 40.6%, and the top regional income tax rate is 45%, meaning that some people are paying an effective marginal tax rate of 85.6%. That's not even including any other taxes, such as state income tax or the federal wealth tax. There is also a regional budget surplus of over $600 billion, meaning that the government is extracting hundreds of billions of extra dollars from the people as we are in the midst of recovering from a recession. The fact that some look at this and think this region needs even more taxation suggests to me that this tax is just about punishing well-off people and not addressing any sort of need.

The only reason anyone is able to get away with tax rates this high is because the economy in this game is broken. There are no distortions to incentives no matter what tax is levied. You can double revenue simply by doubling tax rates. Since most of you are probably aware of this fact, why don't you raise the wealth tax to something astronomical? How about 60%? 70%? There will be no damage to the economy, and you'd be showing your progressive bonafides. After all, the wealthy can "afford" it.

Or we can at least pretend the economy works similar as RL. An 85% tax rate is almost certainly past the peak of the Laffer curve, so you could raise revenue by lowering taxes while at the same time reducing economic inefficiency. At current rates, this region's economy would be crushed by the burden of extractive government, which this new proposal would make even worse. Several European countries had to repeal their wealth taxes due to the massive exodus in wealth. Something similar would occur here since it is very easy for people to just move to another region and dramatically reduce their tax burden. At the federal level, it is at least more difficult for people to move, but the tax still forces people to sell off assets to pay it. If you that adamant about raising taxes, please consider just taxing capital gains as income. That would make much more sense.

[AGA]

Also, one more comment. The bill says that this applies to "Lincoln citizens." So non-citizens are exempt from the tax?

[AGA]

Since Lincoln Law does state illegal immigrants can hold certain jobs, and there's also people on work visas, etc, residents makes more sense than citizens:

the Way Excess Amounts of Loot, To Hell! Act

1. The Wealth Threshold Figure (WTF) shall be defined as a level of net worth exceeded by 0.1% of the population of Lincoln.
2. All Lincoln citizens residents whose net worth exceeds the WTF will pay a 3.1% tax on their assets exceeding the WTF.

Any objection?

Let's take a look at the current tax policy in Lincoln and Atlasia. The top federal income tax rate is 40.6%, and the top regional income tax rate is 45%, meaning that some people are paying an effective tax rate of 85.6%. That's not even including any other taxes, such as state income tax or the federal wealth tax. There is also a regional budget surplus of over $600 billion, meaning that the government is extracting hundreds of billions of extra dollars from the people as we are in the midst of recovering from a recession. The fact that some look at this and think this region needs even more taxation suggests to me that this tax is just about punishing well-off people and not addressing any sort of need.

The only reason anyone is able to get away with tax rates this high is because the economy in this game is broken. There are no distortions to incentives no matter what tax is levied. You can double revenue simply by doubling tax rates. Since most of you are probably aware of this fact, why don't you raise the wealth tax to something astronomical? How about 60%? 70%? There will be no damage to the economy, and you'd be showing your progressive bonafides. After all, the wealthy can "afford" it.

Or we can at least pretend the economy works similar as RL. An 85% tax rate is almost certainly past the peak of the Laffer curve, so you could raise revenue by lowering taxes while at the same time reducing economic inefficiency. At current rates, this region's economy would be crushed by the burden of extractive government, which this new proposal would make even worse. Several European countries had to repeal their wealth taxes due to the massive exodus in wealth. Something similar would occur here since it is very easy for people to just move to another region and dramatically reduce their tax burden. At the federal level, it is at least more difficult for people to move, but the tax still forces people to sell off assets to pay it. If you that adamant about raising taxes, please consider just taxing capital gains as income. That would make much more sense.

On the 85.6%: No, that's not how it works. Income taxes are marginal. This means if you have say 3 brackets at 10, 20, 30, and Income thresholds of 40,000 ; 80,000 ; 200,000 - you pay 10% on your first 40,000, 20% on your second 40,000, and 30% on any Income above 200,000. Not 30% on your whole Income if it is above 200,000.

So those paying the 45% rate are not paying that on all their income- just the portion above the top Income threshold. The rest of their income is taxed at a lower rate.

I know that income taxes are marginal, I just worded it wrong. The Laffer curve still applies to marginal rates to a certain extent.

[AGA]

An amendment:

the Way Excess Amounts of Loot, To Hell! Act

1. The Wealth Threshold Figure (WTF) shall be defined as a level of net worth exceeded by 0.1% of the population of Lincoln.equal to $1 trillion.
2. All Lincoln citizens whose net worth exceeds the WTF will pay a 3.1%tax on their assets exceeding the WTF.

[AGA]

Aye

[AGA]

Nay