Saturday, October 29, 2011

"Experts" and How Much Taxpayers Pay

There are so many ways for an expert to misrepresent information, whether they mean to or not.  Consider THIS ARTICLE, talking about the difference between assessing taxes paid on the basis of annual income or of total wealth. 

On the one hand, using annual income gives a relatively neat, clean, number to use.  If we are looking at tax rates, it makes sense too.  But like all technical tools, it quickly loses effectiveness when used for anything else.  For example, if we are looking at the real impact of various tax plans, than using annual income doesn't really make sense.  Not only does income not account for savings, investments, etc..., but also fails to account for some forms of wealth growth (capital gains, interest on muni bonds, etc...).   Read the article. 

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