Taxes and incentive to work

[headcheese]

I encourage you to read the entire article.
 
Suppose that some editor offered me $1,000 to write an article. If there were no taxes of any kind, this $1,000 of income would translate into $1,000 in extra saving. If I invested it in the stock of a company that earned, say, 8 percent a year on its capital, then 30 years from now, when I pass on, my children would inherit about $10,000. That is simply the miracle of compounding.
Now let’s put taxes into the calculus. First, assuming that the Bush tax cuts expire, I would pay 39.6 percent in federal income taxes on that extra income. Beyond that, the phaseout of deductions adds 1.2 percentage points to my effective marginal tax rate. I also pay Medicare tax, which the recent health care bill is raising to 3.8 percent, starting in 2013. And in Massachusetts, I pay 5.3 percent in state income taxes, part of which I get back as a federal deduction. Putting all those taxes together, that $1,000 of pretax income becomes only $523 of saving.
And that saving no longer earns 8 percent. First, the corporation in which I have invested pays a 35 percent corporate tax on its earnings. So I get only 5.2 percent in dividends and capital gains. Then, on that income, I pay taxes at the federal and state level. As a result, I earn about 4 percent after taxes, and the $523 in saving grows to $1,700 after 30 years.
Then, when my children inherit the money, the estate tax will kick in. The marginal estate tax rate is scheduled to go as high as 55 percent next year, but Congress may reduce it a bit. Most likely, when that $1,700 enters my estate, my kids will get, at most, $1,000 of it.
HERE’S the bottom line: Without any taxes, accepting that editor’s assignment would have yielded my children an extra $10,000. With taxes, it yields only $1,000. In effect, once the entire tax system is taken into account, my family’s marginal tax rate is about 90 percent. Is it any wonder that I turn down most of the money-making opportunities I am offered?
http://www.nytimes.com/2010/10/10/business/economy/10view.html
 

[wmdn_bs]

You start off with "Suppose" then drift off into some hypothetical situation. Allow me to offer this. "Suppose" there were no wars. "Suppose" there were no hunger or poverty. "Suppose" there was no evil. "Suppose" there were no bigotry. If those suppositions were reality, there would be no right wingers. Then who would I have to argue with?

[Baretta19]

We see WMD is true blind devotion can't face REALITY, Sadly the Goose Steppers reality is  making the successful bear yet MORE of THEIR BURDEN, Frankly I want ALL the Bush cuts to expire, Frankly I think that this ENTIRE COUNTRY in in a world of shit, REGARDLESS OF WHO TO BLAME and EVERY  AMERICAN needs to step up and share the burden, sadly liberal morons think the cabale but unwilling should continue to do NOTHING and reap the rewards,

[gwboolean]

Fumunda,

Good bullshit Porky.  Now the rest of us will get back to reality.

[chuck_curtis]

If I invested it in the stock of a company that earned, say, 8 percent a year on its capital, then 30 years from now, when I pass on, my children would inherit about $10,000. That is simply the miracle of compounding.
 
Just to sidetrack from the point of the original post for a moment (with apologies), 8% if you're lucky.  On top of the income tax is the inflation tax which, alone, cuts that 8% down to -2% (10% is the real inflation rate, not the government's phony numbers -- see shadowstatistics.com).  You can't make any money even if that 8% was subject to no income tax.
 
I just can't understand why anyone supports more taxes unless they are putting taxpayer money in their own pockets.

[gwboolean]

Chuck,

Exactly what 'MORE' taxes are you talking about.  The only taxes that anyone has seen on the table are the ones that you RWFs excused the wealthy and corporations from paying since 2001.  You must be concerned that there are a few jobs left that didn't get shipped overseas using the tax breaks.

[chuck_curtis]

Chuck,  Exactly what 'MORE' taxes are you talking about.
 
Oh, then I guess it's a non-issue.  Nobody is asking for more taxes.  So, then what are we talking about?