tag:blogger.com,1999:blog-4485266386769806559.post1690369026593019183..comments2023-06-03T03:51:36.883-07:00Comments on Canadian Election Watch: Whither Policy Debate?Election Watcherhttp://www.blogger.com/profile/10276655533153494264noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-4485266386769806559.post-20080893109043796702011-04-26T14:52:34.413-07:002011-04-26T14:52:34.413-07:00Yes, a rich saver pays even more. My point is that...Yes, a rich saver pays even more. My point is that the current system penalizes savers. This penalty is so large that it can easily cause middle-class savers to pay a higher tax rate than rich non-savers. Obviously the most taxed person is the rich saver.<br /><br />Why did you post the comment under an unrelated post?Election Watcherhttps://www.blogger.com/profile/10276655533153494264noreply@blogger.comtag:blogger.com,1999:blog-4485266386769806559.post-75610820607101076772011-04-26T14:45:03.766-07:002011-04-26T14:45:03.766-07:00I don't understand this example
"The mid...I don't understand this example<br /><br />"The middle-class worker, however, faces a rate much higher than 29.7% because he is trying to save. Indeed, with no tax, he would receive $1*(1.04^20) = $2.191 in 20 years. With tax, he starts out with $0.703 to invest. But then, each year, his return is (1-0.297)*4% = 2.812% because interest is also taxed (assuming he stays in the same bracket throughout). As a result, in 20 years, he will only have $0.703*(1.02812^20) = $1.224. He is giving up $0.967 out of $2.191 in taxes, or 44.1%. If he saves for 30 years instead of 20, the effective tax rate is 50.2%.<br />" <br /><br />You could create a similar scenario for the rich guy if you were looking to prove that he paid way more - just change up the investment scenario - you've not provided a fair playing ground so I don't get the pointAnonymousnoreply@blogger.com