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Comment by seiferteric | Hacker News Reader

I think I don't like income tax as it disincentivizes labor and also makes it harder for working people to build up wealth. Making a million a year sounds like a lot, but who knows how long someone might be making that kind of money? Meanwhile already wealthy people are mostly untouched. Would rather see majority of taxes come from corporate taxes and capital gains.

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> but who knows how long someone might be making that kind of money?

Would you mind saying a little bit more about your thinking here? A million a year doesn’t just sound like a lot, it is a lot. FRED reports the median income in Washington at just shy of $100,000 [0]. We’re talking about households that make 10x the median.

Also, what does it matter the length of time they earn it? If they don’t earn more than $1m, they don’t pay it, right?

[0] https://fred.stlouisfed.org/series/MEHOINUSWAA646N

> If they don’t earn more than $1m, they don’t pay it, right?

Correct, and for the times they do earn more than $1m, with this tax they are only taxed on the income over $1m and pay nothing for income of $999k and below. If you make a million and one dollars, you owe 10 cents.

There are plenty of ways that you might make a large income in a single year like selling a business you have spent years or decades building up. Your "income" for that year might be several million that year, but it took you years to "earn" it. In general I don't think taxing people that actually have to work for a living is a great thing, all you are doing is prolonging the amount of time they have to work to save enough to either retire or start their own business. I would prefer to shift taxes to cap gains (why do long term cap gains rates exist???) and corporate taxes as well as sales tax.

How do you deal with a corporation just moving their HQ to another state though? It is hard because you cannot just say oh we should only have a federal income tax because then states would just rely on the federal government for funding. At the same time the wealthy people/corporations can easily move to another state leaving the middle class to make up for lost revenue.

You just... deal? You think about it then make a law in a way or another, instead of this decision paralysis. I also assume all states will think about it (rather sooner than later) so it's all a matter of concern and will - if there's one, because in a world ruled by corporations and billionaires, if it's all left to them, the only ones paying for roads, military or community services will be you, me and our likes (I assumed there aren't many billionaires on HN and also won't be any time soon). The tax breaks trend seems to only increase, right?

You deal with it by competing with other states, which is what happens now, and what is intended based on the very architecture of the federal and state governments. This will make Seattle less attractive to the type of person who makes a LOT of money almost entirely from W2 income. Private practice physicians, specialty attorneys, that kind of thing. "Working people" who happen to be very highly compensated.

If I was in that type of role and I could routinely expect to make $1.5-$2M/yr it would absolutely make me consider places like Florida or Texas more, especially with the marriage penalty mentioned in the article (although I'm curious how many households have two people both earning more than $1M/yr).

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