Do you think the U.S. Personal tax exemption should be raised? (it's capped at just over $3k now)

[netmouse]

[Poll #1835541]

Comments

[drplokta]

Sharp cutoffs are nearly always a bad idea. You don't want people earning $109,990 per year to have to beg their boss not to give them a $200 raise. Increase the threshold for everyone, and reclaim it from the rich with a slightly higher top rate.

[eleri.livejournal.com]

*nod* I remember Blade having to turn down a raise at work, because it would have put us over income for Mousie's SSI.

[greyhat.livejournal.com]

Yeah. You can use a higher exemption for everyone, and people with high incomes just won't be affected by it as much. Their base tax rate will make up most of the difference.

Unless you want to consider many tiers, but that causes the same problem - trying to mini-max your income to stay below the cut-off.

[netmouse.livejournal.com]

Nod, you guys are right. I was just using the current tier, but there's no need for a cutoff, and it can have deleterious effects..

[ckd]

Either have a gradual phase-out, or just let it be part of the scheme.

Personally, I'd raise the exemption and get rid of the FICA cap. (I suspect doing so would cost me some money, but I'm okay with that.)

[purplecthulhu.livejournal.com]

The correct solution to that is to not have sharp changes in the system. Instead of delta function gradients smoother functions like polynomials etc. should be used. That way 'poverty gaps' etc. can be engineered out of the system.

I would love to see the BBC economics correspondent discussing how a change in the coefficients of the taxation equation will affect things, but I suspect that he, the Treasury and the general populace are just too mathematically ignorant to be able to cope.