Arcacia Passes Tax Reform

PROVIDENCE - Income tax reform legislation has been passed which changes the taxation rate of individuals effective from the beginning of the 2011-2012 financial year. The tax rate of low incomes earners has been drastically decreased, with the tax-free threshold raised to ARD$9,999. Tax rates for high income earners has been raised, with the top tax rate increasing from 30% to 40%.

That makes the UK system look like hell.

*hops on plane to Arcacia*

:shock: don't yah think thats a little high for 100,000 thats 40000 a year.

Uh... no. It's perfectly reasonable.

The British tax system is 40% for people on £45,000 a year. Arcacia's system looks amazing to me.

wait, never mind, for some reason i was thinking 70,000

so in the long run someone that makes $90,000 per year makes the same as someone with a $100,000 income

No, the person on $100,000 has $1500 more after tax.

In Arcacia, the rich are taxed more heavily, unlike other places (such as the USA) where the greatest tax burden is on low income earners, thus creating a sub-class known as "working poor."

It is the rich who consume the most resources and thus should provide the greatest contribution. It is unreasonable to expect a person earning less than $20,000, which amounts to about $385 a week, and who must still pay rent, which may be as high at $200-$300 per week, and must also pay for electricity, food, fuel and other sundries, to part with any more than a nominal amount of tax. Even then, they are only just making ends meet. There disposable income is extremely modest or non-existent.

Whereas, a person earning $100,000 a year, which is $1923 per week, can easily afford a 40% reduction, leaving them with $60,000 per year, or $1153 per week. A mortgage of, say, $500 per week, plus food, electricity, fuel and other sundries, their disposable income is still more than the person on $20,000 per year has before anything needs to be paid for.

Once a person breaks through to the higher tax brackets, their disposable income still rises. Someone on $1,000,000 per year takes home $600,000. More than enough for any reasonable person to live on.

There will always be fuzzy mathematics at the borders of the tax brackets and a 5% raise that just nudges a person into the higher bracket may not necessarily be such a cause for celebration, but it does still result in extra disposable income. As with any income tax system, the "sweet spot" is at the top of any given bracket. Once a person is in the highest bracket, any raise in pay is a guaranteed raise in disposable income.

Viva el socialism... :scratch:

In the us u can either afford to be liberal or need to be, the middle ground (like my family) is usually more conservative. also the midwest and south are more conservative and the east and southwest are usually MUCH more liberal, the northwest is eh-eh. my family is lower upper class, although both my grandparents are upper lower class. Liberalism is a thing for the super rich and super poor.

But maybe these people getting payed $100,000 a year actually deserve it all because they are contributing the most through there job.. Say a doctor is making $100,000 and a person working at a gas station is making $15,000. That doctor is helping 100s of people per day and the guy at the gas station is selling soda and twinkies... Should the doctor thats contributing greatly have to pay 40% of what he makes already?

Tyler - you're missing the point. The bottom of a tax bracket, in EVERY tax system, is always only marginally better than the top of the previous tax bracket. Are you saying that someone who is barely able to afford to live should pay the higher tax rate?

Julien - it's not socialism. It's social responsibility. There is a difference.

Aleks - That's an unfortunate side effect of the American system. In Australia, the opposite is true. It's the super rich who are conservative. Most of the middle class (where I am) and the lower class are liberal.

I never said it was socialism I just said, viva el socialism, cuz there's only 1 tax for every person.

Ah, okay. LOL

A flat tax was proposed for Arcacia, but was met with strong opposition.

It was actually the higher income earners that campaigned for this tax reform.

I really don't understand why you guys are confused by this, it sounds brilliant to me. If Arcacia was real, I'd hop on a plan to it now!

The UK tax system is atrocious.

but none of us are from the UK so we don't understand your point of view

And no im not saying the poor people should pay the higher rate.. Im saying it should be more balanced, instead of such a huge incline..

It's not a huge incline, at all. For some of them it's $10,000+ the gap between each tax band, and some go up by only 2% or so.
EDIT: In the UK, we pay 40% tax on income of over £37,000 per annum - in Arcacia it's 10%.

It's not a huge incline, Tyler. 5%-10% is not a huge incline. And by "more balanced" it would automatically mean raising taxes on low income earners to cover the shortfall.

Compare this with the US tax system, where someone on $8,375 pays 15%. How is that balanced?

Quebec has a similar tax fees with UK. For mid class ppl, it's like 50% of "impôts" of your annual salary.

I agree with Tyler, it does go sharply up.

Okay. Whatever. Tired of talking about it now.

Just wondering, the people of Arcacia, I believe, does get extra income through stock trading and investment and stuff. Does the tax rate also applies to income earned through stock trading and investments?

So it's fair for some one who earns less to have to be taxed more to provide services they probably hardly ever use.. Because statistics show that rich people earn more and use more services.. So they should pay more..

I see it this way, Services like power and water aren't free, you have to pay for them. The services most payed for by taxes are those that benefit the middle and lower classes, like public transportation, social security, and free education programs. It doesn't necessarily mean that the poor should pay more, it's just that they shouldn't pay so much less, because the amount of money they give to government will be lower, even if it's the same or similar percentage of their income. Making people pay more the more wealthy they get slows their gaining wealth, wealth that could be benefiting the economy, because wealthy people also spend more. Just my view, everyone has their own, and I respect that. I agree with Daniel though that this argument will go nowhere, it's purely ideological, even in real life no one has come to a perfect answer. If Arcacia wants to have this type of tax system then that's fine, just have your kind of tax system in your country. That's what makes CJ Unions so fun, is you get to control your country, and then have it interact with others like a real country.

Okay yea I'll stop talking about it cause

Tyler + Liberalism = Huge epic argument waiting to happen