Quote:
Originally Posted by astra
If I understand correctly, he says that there is very high tax if you earn more than a certain figure.
For example:
If you eran 15K pa., the tax is 20%, so you pay 3K
If you earn 40K pa., the tax is 30%, so you pay 12K
If you earn 51K pa., the tax is 40%, so you pay 20K
If you earn 100K pa., the tax is 50%, so you pay 50K
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I think is most countries tiered tax rates only apply to income in that tier, so actually someone earning 100K wouldn't be paying 50K in tax, but less than that.
Quote:
However, if the percentage was the same 20% for everybody, then people who earn would not have to find ways to hide their income.
It would look like that:
If you eran 15K pa., the tax is 20%, so you pay 3K
If you earn 40K pa., the tax is 20%, so you pay 8K
If you earn 51K pa., the tax is 20%, so you pay 10K
If you earn 100K pa., the tax is 20%, so you pay 20K
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On your figures, ignoring tiered tax rates, total tax income here across these four people is 41K vs 85K in the first set of figures. Therefore everyone's tax rates would have to be doubled to have the same amount collected. So this becomes more like:
If you eran 15K pa., the tax is 40%, so you pay 6K
If you earn 40K pa., the tax is 40%, so you pay 16K
If you earn 51K pa., the tax is 40%, so you pay 20K
If you earn 100K pa., the tax is 40%, so you pay 40K
Still sound fair?