At 09:30 PM 5/7/96 -0400, Black Unicorn wrote:
On Tue, 7 May 1996, jim bell wrote:
At 04:46 PM 5/7/96 -0400, Black Unicorn wrote:
I'm not sure I understand what you mean. I sent the text of the law to the list. The position that you take (that increse in inflation can send you into the next tax bracket) is incorrect.
You seem to be forgetting that one of the provisions of (I believe) the 1986 tax act was that capital gains would be indexed for inflation. However, the sleazy politicians only scheduled it (the indexing process) for about 1990 or so, and by 1990 they managed to get that idiot Bush to agree to drop it.
Considering that there is one bracket for capital gains income (namely 28%) what does this have to do with bouncing you into the next income tax bracket?
Well, you can play all the word-games you want, but many people use the term "tax bracket" to mean the amount of tax they pay as a proportion of income. (Too bad the IRS hasn't yet defined the term "income"!) Since inflationary gains on assets shouldn't be counted as "income" at all, people end up paying a larger proportion of their income as taxes due to this. Go ahead, play games, but ultimately the amount they write on the check will be increased as a result of inflation. I doubt whether they would be in any mood to accept a picky technical definition. It is these people that will eventually decide that it's better to pay money to go to government employees' detriment, rather than benefit. Jim Bell jimbell@pacifier.com