For those who are focused on the near-term debt limit talks and the swirl that accompanies it, let me throw out a word of caution: the Democrats are salivating over the potential for 70%+ marginal tax rates. Let me explain how a portion of the tax-paying public could reach those:
First, for those unsure of what a “marginal tax rate” is, it is the rate of taxes for the last dollar earned. Let’s start with the current top federal tax bracket is set at 35% which will rise (with no action) to 39.6% in 2013. This could be adjusted higher by two points due to phase outs of some itemized deductions for high-income earners – remember those evil income earners over $200K ($250K for joint filers). The payroll tax is 12.4% capped to the first $106,000 of income and tack on another 2.9% for Medicare taxes. If we add in state taxes (Hawaii’s top rate is 11%, California’s is 10.3% and many states max out around 9%) and adjust the marginal rate for the deduction of state taxes, this nets out to about 44% as the top marginal tax rate. Then we need to add in the 0.9% increase to the payroll tax for ObamaCare and his proposal to uncap the Social Security taxes, this would net out to a bit over 58%.
For a single filer in 2011 whose net income is $50K, they’ll get hit too. They fall into the 25% tax bracket, then add the payroll tax at the new 15.3% and a state rate of 9.3% (California’s rate for this income bracket – see here) and this $50K a year earner is paying a marginal rate of almost 50% (49.6). Half of every dollar earned at the end of the year (essentially) goes to the government.
GorT is an eight-foot-tall robot from the 51ˢᵗ Century who routinely time-travels to steal expensive technology from the future and return it to the past for retroinvention. The profits from this pay all the Gormogons’ bills, including subsidizing this website. Some of the products he has introduced from the future include oven mitts, the Guinness widget, Oxy-Clean, and Dr. Pepper. Due to his immense cybernetic brain, GorT is able to produce a post in 0.023 seconds and research it in even less time. Only ’Puter spends less time on research. GorT speaks entirely in zeros and ones, but occasionally throws in a ڭ to annoy the Volgi. He is a massive proponent of science, technology, and energy development, and enjoys nothing more than taking the Czar’s more interesting scientific theories, going into the past, publishing them as his own, and then returning to take credit for them. He is the only Gormogon who is capable of doing math. Possessed of incredible strength, he understands the awesome responsibility that follows and only uses it to hurt people.