Let's play: Name that Tax Cut!
A18:
1. Is this a tax cut [mostly] for the rich?
--Upper Class 01
----40% tax
--Middle Class 01
----15% tax
--Lower Class 01
----10% tax
All that raises $1,000,000. Now let's say someone decides to cut the budget to 10% of its former size, so now government only needs $100,000.
Now let's lower the tax burden on these citizens to 10% of the former size.
--Upper Class 01
----4.0% tax
--Middle Class 01
----1.5% tax
--Lower Class 01
----1.0% tax
2. Is this a tax cut [mostly] for the rich?
--Upper Class 01
----40% tax
--Middle Class 01
----15% tax
--Lower Class 01
----10% tax
Again, all that raises $1,000,000. Now let's say someone decides to cut the budget to 10% of its former size, so now government only needs $100,000.
Now let's lower the tax burden on these citizens to 10% of the former size. THIS TIME, the legislature decides to cut each tax rate by 15 points...but the lower class only pays 10%, so they just make it 0 rather than paying these people money.
--Upper Class 01
----25% tax
--Middle Class 01
----0% tax
--Lower Class 01
----0% tax
So are the poor exploited?
3. Is this a tax INCREASE on [mostly] the rich?
--Upper Class 01
----4.0% tax
--Middle Class 01
----1.5% tax
--Lower Class 01
----1.0% tax
This time, all that only raises $100,000. Now let's say someone decides to increase the budget to 1,000% of its former size, so now government needs $1,000,000.
They increase taxes proportionally.
--Upper Class 01
----40% tax
--Middle Class 01
----15% tax
--Lower Class 01
----10% tax
Now some poor people walk around happy. After all, their taxes only went up 9 points! The rich are paying 36 points more!
YAY!! PROGRESSIVE TAXATION!!
Are they right?
A18:
01 = 0ut of 1ncome
Stupid abbreviation, just ignore it
Lunar:
How do you define "upper class?"
A18:
Why should it matter? It's a tax rate that each person in that group pays.
For example, it could be the top 90% or the top 1%. Make your choice.
b_rules:
it depends on the distribution of income. unless you can define a curve with both the income distribution and your arbitrary class cutoffs, it is impossible to answer the question in an intelligent manner.
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