If we expanded the bracket to lets say 2 million at 37%, then people at the 150,000 or lower would be at a lower tax bracket. Makes sense to me, but it doesn't seem to be an idea coming out of politicians mouths.
This is a pull-it-out-of-my-@$$ guess, but I think it has something to do with the fact that the percentage of the population that makes at least $2 million a year is extremely small, but the percentage of the population that makes at least $150,000 a year is a heck of a lot bigger, so Club Fed figures their best bet for getting more tax money is to set the tax bracket cap lower -- especially since the millionaires have high-priced accountants working for them that can find all kinds of creative ways to structure their income and net worth so they pay very little tax on it.
The tax bracket doesn't stop at $150,000. This means you don't stop paying taxes when your taxable income exceeds $150,000. The single tax brackets for 2006 are: $0 - $7,550: 10% $7,550 - $30,650: 15% $30,650 - $74,200: 25% $74,200 - $154,800: 28% $154,800 - $336,550: 33% $336,550 - up: 35% This means that once a person's taxable income exceeds $336,550, every additional dollar of income they receive is taxed at 35%. There is no upper cap where they are no longer subject to tax. If they earn $2,000,000, then the amount of income they earned from $336,550 up to the $2,000,000 ($1,663,450) is taxed at 35%.
because politicians for the most part have high incomes, and or have people with big incomes in their pockets, so it's in their best interest to screw the little people and keep things the same.
First, you'd have to put in that top bracket and then adjust the other ones down. Even if you put in the bracket at $2 million for 37%, no one will get benefit until the other ones change. Second, we're talking about taxable income and not just all earnings. Because of adjustments like depreciation and other expenses, many people who appear to have loads of income have very little in taxable income. Take Mr. Bill Gates as an example. I'd be willing to guess that his effective tax bracket is lower than the highest. Why? Because the rate on capital gains is so much lower. It's all a game at the end of the day. One just needs a good enough coach to guide the team through.
