Delete comment from: Captain Capitalism
No Randian. In no respects is our corporate tax rate 'flat'. It is progressive. The ability to calculate an average tax rate per dollar of income doesn't make the tax flat.
There are serious implications on incentives and subsequent redistribution by varying marginal tax rates within those bands of profit.
Let me illustrate this with an absurd example. Suppose we tax the first million in profit at 15 percent and the next 9 million at 100 percent. The average tax rate on 10 million in profit is 91.5 percent. But no company would choose to earn a penny more than 1 million.
A flat tax has a constant marginal tax rate on every dollar of income above a certain exclusion. A special case of this is when the exclusion is $0 in which case it's called a proportional tax.
Any group of numbers can be averaged. Just because our basketball team averages 100 points per game doesn't mean we scored 100 points in all (or any) of our games. If our opponents averaged 95 points per game, it doesn't mean we won all our games.
Nov 4, 2008, 3:06:00 AM
Posted to Dumbass Liberals