Question

Marginal Tax rate	Earnings/Income	Tax owed
10%	$0 to $9,525	10% of income
12%	$9,526 to $38,700	$952.50 plus 12% of the amount over $9,525
22%	$38,701 to $82,500	$4,453.50 plus 22% of the amount over $38,700
24%	$82,501 to $157,500	$14,089.50 plus 24% of the amount over $82,500
32%	$157,501 to $200,000	$32,089.50 plus 32% of the amount over $157,500
35%	$200,001 to $500,000	$45,689.50 plus 35% of the amount over $200,000
37%	$500,001 or more	$150,689.50 plus 37% of the amount over $500,000

Part 2:  

Should the U.S. change the percentages, dollar amounts or number of rows/brackets in the above table ? Explain your position. If you aren't comfortable answering this do a google search on "proposed marginal tax rate changes" to learn about different points of view. Hopefully you'll find contrasting points of view to learn from.

Answer 1

According to me this new tax regime in US relaxes people a little bit as it has lowered the tax rates which is to paid by people to government from their earnings. Earlier there were seven brackets which were 10 percent, 15 percent, 25 percent, 28 percent, 33 percent, 35 percent and 39.6 percent while now the percentage have declined in every bracket. This progressive tax system is good for economy as you charges more tax from wealthy people and less from poor.

Take a case if you have a earning of 37000 in both the regimes.

Earlier you paying 952.5 + 2781 [ 12% of (32700 - 9525) ] = $3733.5

Now you are paying 952.5 + 2317.5 [ 10% of (32700-9525) ] = $3270

The difference over here is $463.5 when you income is $32700. When you take a case of higher income, the gap would widen further. Now if you are thinking from a customer/producer prespective, the tax declined is a good step which raises the consumer/producer surplus in the society. If you are thinking from government point of view, your tax revenue have declined which you use for infrastructure building of the society, it is bad from that point of view.