> At the low end the reduced tax rates are an accommodation for those "too close" to the poverty line.
Interesting, I've never seen progressive taxation portrayed downwards rather than upwards.
I'm describing the underlying motivation, which is focused on those of more modest "ability to pay" as wiki phrases it:
"Progressive taxes are imposed in an attempt to reduce the tax incidence on people with a lower ability to pay"
https://en.wikipedia.org/wiki/...
In truth, being motivated by wealthy, rather than the modest, is the uncommon perspective, and a political tell.
> So if we starting creating additional higher tax brackets above $50K we are no longer fulfilling the role of assisting those "too close" to the poverty line. We are no longer dealing with the bottom 30% of households.
Not sure your point, the bottom 30% top revenue is about 50 000 but there are additional tax brackets up to about 500 000.
Your hypothetical ended at 50K. The point is to setup for the question: "We would need a new rationale, a new justification, for these tax brackets. What would you suggest the justification be? Hopefully something reasonable to the voters of the political left, center, and right so that it is plausible."
I think the answer to this question is very important.
> Also consider that tax brackets of a punitive nature ...
I don't think framing them as punitive is helpful or would you also consider calling today's lower economic class wages punitive?
At a point it does become punitive, when the "ability to pay" is no longer an inconvenience. Consider income levels A and B, both wealthy enough that a 35% tax rate would be nothing more than a minor inconvenience of either. However A is charged 30% and B 35%. What is the motivation other than emotions such as envy? That is what I mean as punitive. Again, the new justification for tax brackets as we move away from those of modest incomes is key here.
> ... just incentivize the wealthier to pay accountants and lawyers rather than the taxman. And (1) these accountants and lawyers always seem to be smarter than those working for the government and (2) tax deductions, credits, etc are probably the #1 vehicle for political corruption and abuse in the USA.
I don't see this being true before the 1970s?
Google puts the date as late 1940s: "Tax scholars and economic historians identify the post-World War II era as the turning point when the US tax code began its transformation into an abnormally complex entity. High marginal tax rates and broad economic bases incentivized politicians to offer targeted deductions and exemptions, turning the tax code into a vehicle to reward supporters and subsidize favored industries"