margins
our marginal tax rate is over 50%. do i care? rarely. it helps the beautiful and talented alisa make decisions about how much contract work to do and how much to charge. say she charges $100/hr for simplicity. she gets to keep less than $50. she works because she wants to keep her fingers in the pie. and deal with problems not related to family. so she either raises her rate for uninteresting work until the company balks. or she takes the tangible hit for the intangible gain. i love that woman. anywho, but wait you say! i prattle on and on about my tax rate usually being in the low 20%s and now i say it's over 50%. heh. strange but true. it's the difference between marginal tax rate and effective tax rate. very little of our income is taxed at the marginal rate. most is taxed at either the lower brackets or at the capital gains rate or not at all. which makes kind of a weird situation. one assumes the smartest brightest most talented most experienced individuals command the biggest salaries. but those very same individuals are strongly incented to leave the work force and live off the proceeds of managing their portfolios. which seems like it's not in the best interest of society. i think that's a pretty strong argument for changing our tax structure. ie keep the best workers in the work force. instead of letting them slip away.