Δαφνη Ευτυχια Αρθουρος

(Also posted to FB & Twitter)

I was thinking about the clear explanations I've seen recently of how marginal tax rate brackets work, and it's obvious that the percentage-of-income that the final tax bill represents has to be smaller than the percentage your tax bracket is named for (i.e. the percentage collected on the topmost slice your income reaches), but I didn't have a clear picture of how much less. So I banged on LibreOffice for a bit when I should have been asleep, to plot a really naive approximation (i.e. ignoring all the deductions, deferments on retirement accounts, etc. that most tax returns involve, much less all the fancy approaches the super-rich use).

That is to say, it's obvious that someone in the 70% tax bracket won't be handing over 70% of all their income, but I wanted a visualization of how much less. And likewise for the existing brackets.

The perspective on how far out I had to zoom the view to see the effect of the proposed 70% marginal rate on incomes over $10MM, that is, just how big ten million is, may also be useful. (I didn't want to make the x axis a log scale, because I feared that would throw some people off. Though I'm not even sure whether LibreOffice will let me do that anyhow.)

Do check my math. I'm well beyond my areas of expertise. And if someone wants to do a more realistic version instead of my simplified worst-case one, I'd like to see that. 'Cause these are just an "if you pretend that the description of tax brackets is the whole of the tax code" abstraction.