This page has been archived and commenting is disabled.
Guest Post: The Real-World Middle Class Tax Rate: 75%
Submitted by Charles Hugh Smith from Of Two Minds
The Real-World Middle Class Tax Rate: 75%
If we include all taxes, the real-world tax rate is much higher than the "official" income tax rate.
For those Americans earning between $34,500 and $106,000, the real-world middle class tax burden in high-tax locales is 15% + 25% + 5% + 15% + 15% = 75%. Yes, 75%.
Before you start listing the innumerable caveats and quibbles raised by any discussion of taxes, please hear me out first. Let's start by defining "taxes" as any fee that is mandated by law or legal necessity. In other words, taxes are what is not optional.
If we include all taxes, the real-world tax rate is much higher than the "official" income tax rate. These "other taxes" vary from nation to nation. France, for example, has a "television tax." It is mandatory, and since virtually every household has a TV this operates as a universal tax. The argument that this is "optional" is specious.
In every other advanced democracy, basic universal healthcare is paid by tax revenues. In the U.S., healthcare insurance is "optional" but this too is specious: in the real world, private healthcare insurance is mandatory because the alternative--having zero insurance--places your entire net worth and income at risk of catastrophic loss.
Having no healthcare insurance only makes sense if you have no real assets and a low income. At that point, your care will be provided by the taxpayer-funded Medicaid program, which is the default universal-care program in the U.S.
For this reason I consider the cost of private healthcare insurance in the U.S. the equivalent of a tax. We pay over $12,000 annually for barebones healthcare insurance, which amounts to about 15% of our gross income. Some countries pay for healthcare with a 15% tax, here we pay the 15% directly. There is no difference except the process of collecting the 15%. (The only real difference is that healthcare costs twice as much per person in the U.S. because the system is operated by cartels whose business model is fraud, opaque pricing and the elimination of competition via Central State regulation.)
Yes, the super-wealthy can absorb a $150,000 hospital bill, but the 99.9% cannot. Thus any claim that healthcare insurance is "optional" is specious.
Property tax is mandatory. Some countries have no property tax, others do. Once again, only counting social-insurance and income taxes as the "official tax rate" is horrendously misleading. For countries without property taxes, the revenues are collected as value-added taxes (VAT) or higher income taxes. One way or another, the services paid by property taxes in the U.S. are paid by other tax schemes in countries without property taxes. So property taxes must be included in any accounting of total taxes paid.
Many of us who reside in states such as Illinois, New York, New Jersey and California pay $12,000 or more annually in property taxes. That is about 15% of our household income.
Renters pay the property taxes indirectly, but to the degree that rents would be lower if property taxes were eliminated and the tax burden shifted to a VAT, then renters "pay" the tax just like property owners.
Employees looking at the paycheck stubs do not see the entire tax paid on their labor. Empoyees may wonder why their net pay has stagnated for decades. One reason is that the total compensation costs of employees has risen substantially.
To give but one example of many, Social Security taxes were once modest, 3% paid by the employee and 3% paid by the employer for a total of 6% of the wage. Now the total for Social Security (12.4%) and Medicare (2.9%) is 15.3%. Self-employed people pay the total 15.3% as "self-employment tax." This is the real-world tax burden of Social Security and Medicare.
The 15.3% Social Security/Medicare tax starts with dollar one of net income. The Social Security tax goes away above around $106,000 in income, the Medicare tax does not.
Most employees do not know how much healthcare insurance "tax" is paid by their employer. To the degree that wages would rise if the healthcare "tax" was not paid by employers, then employees pay for this "tax" indirectly. To act like it isn't a mandatory part of compensation costs is both specious and misleading.
The only transparent way to calculate the total tax burden is to count all taxes (or equivalent) paid by self-employed property owners. Not counting the indirect taxes of healthcare and property taxes is misleading to the point of blatant misrepresentation.
The basic Federal income tax gives each individual earner $9,500 in standard deductions and exemptions. The tax rate for all income above that is:
$1 to $8,500: 10%
$8,501 to $34,500: 15%
$34,501 to $83,600: 25%
$83,601 to $174,400: 28%
$174,401 to $379,150: 33%
Above $379,151: 35%
These rates are scheduled to rise at the end of 2012 unless Congress acts to maintain rates at current levels.
Many households have gigantic interest deductions stemming from gigantic mortgages, but let's set aside outsized debt-based tax deductions as far from universal.
Above a rather modest $34,600 in taxable income and up to around $106,000, the real-world middle class tax burden in high-tax American locales is 75%:
Social Security and Medicare: 15.3%
Federal income tax: 25% (28% above $83,600)
State income tax: 5% (mid-range)
Healthcare insurance: 15%
Property tax: 15%
15% + 25% + 5% + 15% + 15% = 75%
Clearly, the percentage of income devoted to healthcare insurance and property taxes declines as income rises. Someone earning $200,000 has not only dropped the 12.4% Social Security tax for income above $106,000, healthcare insurance and property taxes as a percentage of their income drops from about 30% for those earning around $86,000 to 15%.
We can argue fruitlessly about how many tax angels can dance on the head of a pin, but all the caveats and quibbles don't change the basic fact that real-world tax rate for the "middle class" earning more than $34,500 in taxable income in high-tax locales is a confiscatory 75%.
Please don't tell me the U.S. is a "low-tax" nation; I might suffer a breakdown that I couldn't afford due to exclusions in my "voluntary" healthcare coverage.
»
- 34249 reads
- Printer-friendly version
- Send to friend
- advertisements -
In reality....all this is is really a defacto VAT tax.
And we...who are Soylent Green...are cooking in the VAT.
Waste of time printing this drival. 75% tax rate- that's just plain rubbish.
Waste of time printing this drival. 75% tax rate- that's just plain rubbish.
Spoken like the 15 year old you are living with your folks on their dime.
Jumpron, you moron. If you had a job, and owned a home, and paid taxes, like me, you'd understand the effective tax rate in America is too low. That's one reason why we have a deficit. Saying the tax rate is 75% is idiotic at best. Half the country pays NO income tax and receives a refund thru deductions for their 5 kids to offset any sales tax. Do you actually think about what you write or just listen to your cue from Rush?
If you had a job, and owned a home, and paid taxes, like me, you'd understand the effective tax rate in America is too low.
You are quite welcome to sell your house, take the cash, your paychecks and give it to the government. If you haven't done that, yet then shut the fuck up about advocating for more taxes on me.
Jumpron, you moron. If you had a job, and owned a home, and paid taxes, like me, you'd understand the effective tax rate in America is too low. That's one reason why we have a deficit. Saying the tax rate is 75% is idiotic at best. Half the country pays NO income tax and receives a refund thru deductions for their 5 kids to offset any sales tax. Do you actually think about what you write or just listen to your cue from Rush?
Buy one get one free ...
Regardless of the author's figure, you seem to believe that you are undertaxed and thats fine.
Might I ask how much extra you give to the IRS every year at tax time, and also why you do not send even more?
Please explain with facts.
With facts of life.
34,501 taxed by 75pc gives 8,625 income to live a year. $718 by month.
On which you have to substract heating, food, gas, car upkeep, the various mortgages etc...
Not far from it my 15 year old basement dwelling, masturbating to internet porn on their mommy and daddy's dime friend of mine.
I have a job at 35K. Don't own but pay 950 in rent...some of that to pay landlord's property tax.
I do pay a little income tax...but also pay SS tax, payroll tax, gas tax, carbon tax (Energy provider uses coal and is forced to pay for scrubbers and all that to produce "clean" coal power.
I also pay inflation and ZIRP tax as it is hard to save and get interest on savings just so I can afford down payment on house to actually then pay property tax for real.
I am taxed on my driver's license...my car tag....the toll road I now have to take to shorten time to work...or else I would be paying a defacto "distance" tax in increased mileage which would cause me to fill up more often and pay gasoline tax inherit in all gasoline purchases.
Higher food cost due to this same transportation taxation and also inflation due to using land and food items to grow fuel and not food.
Taxed to support public schools I do not send my kids to as my wife and I home school our children.
My income is taxed beyond the income, SS and payroll tax as it is lower because my employer is paying more for my health insurance which means my outlay from my check is more as well.
SO yeah....real world...I get paid twice a month. The first check goes completely to rent and power. The second goes for everything else.
And very little is left over for savings,,,,much less living. And THAT"S if no emergencies happen.
Go back to the X-Box junior.
Exactly.
Thank you for this.
Income is taxed, then when you get your paycheck anything you want to buy is taxed, investments are taxed, "investing" your already taxed income results in another tax on the interest earned (or dividends), and is taxed again if you want to "take it out". Property taxes, car taxes on sale and "value" each year, tax-tax-tax and they still can't keep the system solvent.
Un-phu-king-believable
If you include sales tax, property tax, ss/med, and state/fed inc tax. The rate is at the absolute minimum 40%. Add in all the little bullshit that doesn't fall into major categories and middle class families are easilly losing 50% (again...this is at the absolute minimum).
Let's not forget:
sales tax
gas tax
mobile phone tax
internet tax
vehicle registration fees
airfare tax
utility services tax
etc, etc, etc......
Accounts Receivable Tax
Building Permit Tax
CDL license Tax
Cigarette Tax
Corporate Income Tax
Dog License Tax
Excise Taxes
Federal Income Tax
Federal Unemployment Tax (FUTA)
Fishing License Tax
Food License Tax
Fuel Permit Tax
Gasoline Tax (42 cents per gallon)
Gross Receipts Tax
Hunting License Tax
Inheritance Tax
Inventory Tax
IRS Interest Charges IRS Penalties (tax on top of tax)
Liquor Tax
Luxury Taxes
Marriage License Tax
Medicare Tax
Personal Property Tax
Property Tax
Real Estate Tax
Service Charge Tax
Social Security Tax
Road Usage Tax
Sales Tax
Recreational Vehicle Tax
School Tax
State Income Tax
State Unemployment Tax (SUTA)
Tangible Taxes
Telephone Federal Excise Tax
Telephone Federal Universal Service Fee Tax
Telephone Federal, State and Local Surcharge Taxes
Telephone Minimum Usage Surcharge Tax
Telephone Recurring and Non-recurring Charges Tax
Telephone State and Local Tax
Telephone Usage Charge Tax
Utility Taxes
Vehicle License Registration Tax
Vehicle Sales Tax
Watercraft Registration Tax
Well Permit Tax
Workers Compensation Tax
~~~
OTHERS
http://whatistaxed.com/other_taxes.htm
AND THEY STILL CAN't BALANCE THE BUDGET.
lol
What budget? You seen a budget? I ain't seen no steenkin' budget...
INFLATION TAX!!!
CHS has ignored the Big One -- money printing to pay for more government. The Fed is monetizing over half of federal government expenditures at this point in time. If that's not a huge hidden tax on savers, what is?
True, but that is a shadow tax that the majority of the population can't wrap their heads around.
The Inflation Tax
Excellent, thank you.
Dr. Paul strikes again!
Ron Paul 2012
Two other taxes you haven't included are the sales/corporate tax and the inflation tax.
Corporations who are taxed at 35% in the US simply pass on that price into the product/service they sell. It varies by industry but you can be sure that atleast 10-20% of the cost of a product/service is on account of corporate tax. Then you also have sales tax. Some states have 0% sales tax so in theory you are safe there.
Lastly, the most insidious of all is the inflation tax... i.e loss of purchasing power due to debasement of the money supply. This usually runs at AT LEAST 5%/year maybe more.
These taxes apply to what's left of your income though and not the gross amount.
Pass it on, they may; but pay it, nay.
According to the Center on Budget and Policy Priorities on February 14, 2012: “Corporate tax revenues are now at historical lows as a share of the economy, at a time when the nation faces deficits and debt that are expected to grow to unsustainable levels. Although the top statutory corporate tax rate is high, the average tax rate — that is, the share of profits that companies actually pay in taxes — is substantially lower because of the tax code's many preferences (deductions, credits and other write-offs that corporations can take to reduce their taxes)...
Average Corporate Tax Rate (2000-2005): United States—13.4%
Australia—30.5%; UK—27.7%; France—20.0%; Portugal—17.2%; Belgium—17.1%; Spain—16.7%; Japan—16.4%; Finland—16.2%; Czech Republic—15.7%; Denmark—15.0%; Greece—15.0%; Canada—14.5%; Switzerland—14.4%; Korea—14.3%; United States—13.4%; Slovak Republic—11.5%; Poland—11.3%; Austria—11.2%; Germany 7.2%. (Source Treasury Department [2007} – Center on Budget and Policy Priorities
http://www.cbpp.org/cms/index.cfm?fa=view&id=3411
property taxes and payroll taxes are deductible
yep, as is the "employer-equivalent" portion of your self employment tax...
True but a few things: first, you should make it more clear that since you include some taxes that are taken out pre-w2 (healthcare and emploter paid payroll) it is 75% of more than 100% of what most people think of as their income. Second, though, you don't include sales tax which in a lot of places is another ~5% (of the remainder not of income). Finally, though, it's worth doing the same analysis for someone especially wealthy to show not only are we not a low tax place, we are also not a progressive tax place. As an example, for someone making $10M/yr as $5M income, $5M cap gains you get:
Federal: Income number becomes 35%, but capital gains @ 15% so on a blended base it is still 25%
Social Security portion trends toward 0% since it is capped above ~$100K. So the combined trends toward only 2.9%. Of course, now the new Obamacare law will add to this... I forget how much but I think ~3%.
Real estate taxes are likely lower as a % of income and cap gains but for conservatism leve them the same.
Health care is also much lower as a % of income since it is per person, trending towrd zero. ($12,000/$10M = 0.12%)
So you now get 0.1% + 25% + 5% + 6% + 15% = 51%... much lower than the 75%!
Actually his math is even more f*cked than you describe, because he is adding 'percentages' of very different base amounts.
For example, he quotes 12% social security payroll tax (6 employee + 6 employer), and adds that to the 25% federal tax rate.
12% SS payroll tax is 12% of the base salary amount, but as a percentage of the total "notional" salary (6% higher) is only 11.3% (this doesn't count the other benefits like health care.. which would make the percentage even lower).
But then to add "25%" as the federal tax rate is COMPLETELY wrong because the federal rate is applied to income after deductions, which include all those other taxes, not to mention mortgage interest dections etc. So the 25% applies to an base that is probably 30% less than the "notional" salary, which brings it down to 17.5
Not only that, the 25% is a marginal rate, most middle class people pay 25% on very little of their income.
This is not to say that we don't pay too much tax -- but 75% is complete bullshit.
40% is a more reasonable number. In my case, with mortgage interest deduction, one earner family, a child, and lower property tax than he quotes, my effective rate comes down well below that.
1954 Dreamers:
In my case, property (school district tax) tax plus county tax and borough real estate tax add up to "only" about 10% of my after tax income. But this is escalating every year as the school district (and the others) grant themselves a generous 4.1% increase EVERY year. I have never gotten a 4.1% raise (and that isn't because I'm lousy at my job). I HAVE gotten a pay CUT. Just once I'd love for the SOBs on the public gravy train to get a taste of the real world.
This entire article is... a stretch at best. The figures simply aren't representative... The conclusion is correct, middle america is taxed to oblivion, but the avenue to get there... exaggerated a lil.
First, tax donkeys, whether they be in greece or in the ussa, are naturally inclined to avoid taxes... yes, this means that whole uncle sam ain't gonna historically collect more than 20% thing.
Second, $12k/year in property taxes? In my locale, the tax on a 3/2, 1500 sq ft, new construction home w/ 1/4 acre yard is $900-$1100/yr w/ homestead exemption (+$400 w/o).
Third, $12k/year in healthcare? Maybe, maybe for insurance through your employer for yourself, spouse, and two rug rats. If you want to reduce your premiums dramatically, then get individual policies... obviously, depending on your circumstances, you might be uninsurable... but this figure is only for people who refuse to shop around and who have considerable medical histories... and whose employers don't contribute shit to their premium.
Fourth, the reason the IRS is cracking down so hard atm on self employment tax is because people don't pay it... taking advantage of a loophole for corporate status (s-corp), the amounts above a "reasonable" amount for a salary may be excluded from self employment tax. What happened? Well... you had folks that would pay themselves a reasonable salary of $1 while making a couple hundred $k a year. Needless to say, the taxing authorities thought that a bit generous. Once they started cracking those heads, they noticed the issue was a bit more widespread...
The gist of all this... yes, tax rates are high... but there is ALWAYS a battle over tax... people walk into CPAs everywhere daily who haven't paid taxes in 10 years... professionals... state employees... your neighbors... it happens with a frequency that would probably shock many people... the battle is ALWAYS won, in general, by tax donkeys... the police mechanism is simply not good enough to capture additional tax when it desires... the donkeys lay down. Yes, individual people get rooted out (and stomped on), but for every one who gets castrated, there are 50 that get away. It's not just a rich man's sport.
I take a very conservative approach with my personal taxes and my effective tax rate is nothing near what you're describing... as in light years away...
I think the trend is for increased taxes, but I also think the trend is for increased tax revolt/refusal. Who knows where it ends.
How could you know? In New York , upstate monroe county my property taxes $4500 for 1400sqft ranch .25 acre land in the burbs, Now I have seen homes as high as 18,000 in taxes for sale. So please dont presume he is exagerating.
This house is paid for and what really pisses me off is if I can not pay that $4500 the state gets everything. Which pretty much says it all we are slaves and as long as we can keep paying the master we are allowed to keep what we had to work for.
America Land of the BULLSHIT KINGS.
Happy enslavement day.The only independence we have is .......... I'm thinking................
How could I know what? I don't know the price of every single property tax in the U.S., but I think it's fair to say that the example presented is... in the outer bounds, at best, of not only the most punitive taxing authorities, but also idiotic tax donkeys who do nothing to utilize tax professionals to help them mitigate their payments... In other words, this entire article presents the "exception" and not the "rule". It's so exaggerated to be not representative of anything. (a $175,000 median house paying $12,000/year in taxes??? The article is about middle class... having a spread that requires $12k in property taxes a year is a bit... lavish for middle class, no?)
Further, if you fail to pay $4500 in taxes, the state does not get everything... when you fail to pay your local taxes for a long enough period of time (and plenty of notices), your county certifies your property to the state for nonpayment (at this point you have clouded title and can no longer convey good title since the state technically owns it)[however, you should be able to pay the tax, redeem the property, and convey the title you had before the lien]... then, after a long enough period of time (and again plenty of notices) your state auctions the property... if it sells for more than the tax owed (plus the penalties for late payment, etc.), then the surplus is YOURS... you merely need to prove your identity to the state land commissioner (equivalent). The state only collects what it is due... the windfall (difference between "real" or "market" value and the price paid) is for a third party... this process can take many years depending on your jurisdiction... obviously this is a generalization, but the process is going to be similar most places.
Now, if the state wants to build a highway through your property, then the state gets to OWN your property permanently (the state's ownership of your property for taxes is merely temporary and it simply acts as custodian)... but, of course, not without paying you fair market value for the taking (if you don't like their offer, then sue their asses and get a jury to decide fair value).
Don't forget the air you breathe in newly coming Carbon Tax
Nah, they'll never try that again! Um...
http://www.nytimes.com/2012/07/05/opinion/a-carbon-tax-sensible-for-all.html?_r=1
You forgot Inflation Tax.
Inflation, the cruelist tax of all.
In my state, highest property taxes, real estate and automobiles, sales tax, cigarette tax, drivers licence, registration 'fee', gas tax for the Dept. Trasp......er General fund, permits, state income tax. I should have made it simple, there is only one thing my state does not tax, and don't say the air as we have an emissions tax and emissions testing, even on brand new cars. No, there is only ONE THING in my state that isn't taxed, and I'm sure they are trying to find a way to attach some sort of meter in my bedroom...
masturbating?
VAT is coming.
Well, our tax rate is certainly higher than what is commonly thrown about, but also if we are to arrive at a honest rate, we must increase our effective salaries for certain costs that we can call a tax.
Ex: Employer paid portion of SS/medicare tax must be added in to our "salary." So the denominator will be a bit higher, resulting in a lower percentage.
Inflation is the still, on aggregate, the single largest tax that is payed.
Shit, I would toss in interest on loans conjured up out to thin air as another tax. We create the credit money, then pay the banks handsomely for the privilege of allowing us to do it.
Call it the "banker's kid want a Porsche tax" or "The Caymans are not cheap" tax.
pods
In the UK, if you drive a car, you have a lot of tax to pay, if you go by public transport instead you have to pay a lot to get a ticket!
There is tax on heating, tax on house insurance, 20% VAT on clothes, if food is processed it is also taxed with another 20% VAT on top, council tax... national insurance contributions (tax)
The reason they do this?
Gustav le Bon "The Crowd a Study of the Popular Mind" 1896
"It is only by obtaining some sort of insight into the psychology of crowds that it can be understood
how slight is the action upon them of laws and institutions, how powerless they are to hold any opinions other than those which are imposed upon them, and that it is not with rules based on theories of pure equity that they are to be led, but by seeking what produces an impression on them and what seduces them. For instance, should a legislator, wishing to impose a new tax, choose that which would be theoretically the most just? By no means. In practice the most unjust may be the best for the masses. Should it at the same time be the least obvious, and apparently the least burdensome, it will be the most easily tolerated. It is for this reason that an indirect tax, however exorbitant it be, will always be accepted by the crowd, because, being paid daily in fractions of a farthing on objects of consumption, it will not interfere with the habits of the crowd, and will pass unperceived. Replace it by a proportional tax on wages or income of any other kind, to be paid in a lump sum, and were this new imposition theoretically ten times less burdensome than the other, it would give rise to unanimous protest. This arises from the fact that a sum relatively high, which will appear immense, and will in consequence strike the imagination, has been substituted for the unperceived fractions of a farthing. The new tax would only appear light had it been saved farthing by farthing, but this economic proceeding"
This is why pickpocketing by a skilled operator has a much better risk to reward ratio than mugging and holdups.
look at the other side, all the people who get income from Uncle Sugar:
Bailout babies, wall street (from Fed manipulating futures, IR), corporate welfare employees, defense industry employees, anyone getting earned income, disability income, medicare insurance, all government employees (including state, local, Federal); probably 70% of the country is a net negative
Bad personal choices and random semantic substitutions do not an article make. Your innumerate lunacy is laughably dumb in its own goal-sought and prevaricating way. Who cares if the sum of the effective rates paid on your list there (since some of what you're counting can be written off on other things you are fucking counting and progressive taxation is not a linear quantity either you ignorant shitwit) is less than 30% on average?
But 75% sounds better, right?
Every individual part used to make a product are taxed on down the line. If a product uses 1000 parts. Well you do the math.
Remarkable that of all of the disperate taxes mentioned in the comments above, no one has mentioned the 28% tax on profits from the sale of "collectibles", which, of course, and outrageously, includes GOLD and SILVER!
Remarkable indeed.
that sure is more penalties than I thought..
If you make $100K, you don't pay $75K in taxes regardless of how you define these taxes in your article.
This is "fuzzy" math because you are adding up all these percentages but ignore the fact that many of these are deductible form the other taxes mentioned.
Common sense, if you make 100k, you don't pay 75K in taxes plus health insurance. This is highly misleading.
Here's another one: when a producer buys item A and B to put them together and sell the finished product, he pays taxes too, which gets pushes onto the customer which in turns pays taxes on that price which include the producer's profit tranche + tax inflated "cost" price.
Not all taxes are deductible producer wise.
I get a gross paycheck of $5k a month. I won't count my once a year bonus because that gets taxed at a higher rate.
After taxes and health insurance are deducted I net $3300 a month.
My property tax and mortgage insurance is $350 a month
Other mandated insurances add another $150
Right there is 45%
Sales tax is 7.25% in my area
Gas tax and other consuption taxes can easliy average 3%. So I would say the average middle American middle class tax rate is 55%, not 75% but still way too high. If you account for required expenses like living costs, I would easily put the number at 90% of earned income goes to taxes, insurance, and required expenses.
Another tax is inflation. Just 10-years-ago it cost less $20 bucks to fill-up my car with gas. Nowadays, I'm paying $45.
The government(s) have no intention of fixing the US, because if they did, they would have to admit that they understand the need to reduce the load on small business and the individual, which has been under massive attack from government and large corporations for years. If they admitted it then they would have to take action (how many lies are perpetuated in todays society because those in charge simply will not acknowledge obvious truths).
Instead, Obama, the so called servant of the people, keeps piling the load on people and small business and individuals through more reglation and implied if not factual taxes... and the size and cost of his government keeps expanding and putting weight on the backs of Americans.
And so what are the core issues?
1. Corporations write laws that eliminate competition from small businesses and that exempt their antisocial acts from punishment.
2. When given the opportunity to do a socially unacceptable thing that increases profit, almost unfailingly the people running corporations will choose to do the socially unacceptable thing (pollute, strip mine, lie, cheat, steal, bribe, defraud etc.) ... knowing they are protected by laws an lawyerrs.
How is this possible? Corporations have created laws that allow them to hide behind a veil that protects the decision makers from personally responsibility for their actions... and now that a corporation is a person and humans are monsters (as defined by Black) the path to sanity and socially positive behavior is long, hard and treacherous.
It is no wonder that those who are willing to commit the most heinous acts are the silver tongued devils who end up in charge. At one time in their lives they may have listened to the inner voice that we were all born with that tells us the difference between right and wrong. However, taking the path to indoctrination means that they live by a code of rationalizations stating that all humans are flawed and evil (have you ever listened to Cheney on the subject?) ... so they rationalize that they are absolved from choice between good and evil.
As in Sodom and Gomorrah, if everyone is doing it, then it must be God's will and acceptable, right? .... ooops.
there is also,
gas tax, alchohol tax, hotel tax, airline tax, city and county ordinance tax( countless numbers of them that vary) Cable & internet tax, garbage tax, car rental tax, Airport tax, phone tax, highway toll tax, and the go fuck yourself tax.
Ok, time to settle all the nitpicking. Assumptions: 1. Two family income earns 80k. 2. State/Federal effective rate of gross income is 25%. 3. Property taxes are 3.5k. 4. Health Insurance paid by emp is worth 12 k. 5. Family pays 3% of grosss inc in sales taxes.
Total Comp = 80 + 80*.153/2(emp ss/med cont) + 12 (health insurance)
Total Comp = 98.1
Taxes paid = 3%*80(sales tax)+25%*80(state/fed inc) + 3.5(prop tax) + 15.3%*80(ss/med employee&employer)
Taxes paid = 38.1
Taxes Paid/Total Comp = 98.1/38.1 = 38.8%
There you have it. A completely average middle class family (using conservative assumptions and forgetting a whole slew of taxes) has a real tax rate of about 40%. Add in all the hidden stuff and the number should reach 50% no problem.
Edit: Forgot the biggest tax of all...inflation.
The effective tax rate isn't 25%... it's lower because we use tax brackets on a progressive tax system... only certain marginal income is taxed at the 25% rate... In other words, you're being generous with the 25% rate... the real rate, the effective rate, is lower.
If you add the 12k to your income, then you also need to add that to your taxes to be in line with CHS' approach:
Taxes paid = 50.14
Tax rate = 50.14/98.12 = 51.1%
And you seem to be lucky to live in a place where no state income tax exists and the property values and therefore the property tax is low.
Otherwise you could easily need to add another 10% on top.
@Charles ...in Germany we're closer to 80%+
Germany has the thickest tax-book WW .
In the 80's, the Germans used to say .. "We work until July" just for the State.
I'd hate to ask them which month we have now .. probably Nov.
Oh, and the State Pension system ? .. that is a much longer story
Adenauer was said to have asked his adviser how long the Pension system would work.
.. 40 years , was the reply.
Adenauer's reply ... "Well, that's no longer my problem then"
From ca. 2008 :
CHIPPED FOR YOUR PROTECTION AND TAXED FOR ALL YOU'VE GOT
http://www.youtube.com/watch?v=N_EbIu_TEOI&feature=channel&list=UL
Don't forget "housing taxes" (not property taxes) the state adds about $100,000.00 in "fees" to every new house in CA, they also add a "immigrant Socialist tax" to renters too, (they allow in millions of illegal aliens then subsidize their rents driving up rents for everybody else).
In every other advanced democracy, basic universal healthcare is paid by tax revenues. In the U.S., healthcare insurance is "optional" but this too is specious: in the real world, private healthcare insurance is mandatory because the alternative--having zero insurance--places your entire net worth and income at risk of catastrophic loss.
You might as well say that paying for food is a tax, as everybody must do it. Life is a risk, so life insurance is mandatory if you have a family to protect, so it must be a tax too?
Life is a risk, get over it. You can deal with the risk by saving or by getting along with an extended family or buying insurance or any combination of the three. Or, in a free country, do none of those and run the risk without backup.
The corrollary is that no other advanced democracy is as free as ours, until 2014 when we are all under the same boot.
The money line in this estimate is "high tax locales." For those that live in non-welfare states with low property taxes, the property tax as a percentage of gross income would be more like 5-7%. Also many middle class Americans are simply employees, so that would cut FICA and Medicare in half to 7.65% as the employer pays the other half.
So the "average" person might be paying more like 55-60% in taxes, and this goes lower if their company pays part of the health insurance. Therefore I would say that 50% is more accurate.
In any case, I agree with the spirit of the article however the 75% number can only be attributed to a specific segment of the population and is likely not an average.
I'm a member of the 192. As in "we so broke we can't pay attention to all dis here noise" https://www.cia.gov/library/publications/the-world-factbook/rankorder/21...
Tax me here, tax me there, it's a joke on all of us.
More examples of US citizen math.
That is wonderfully supported by US citizens.
Examples of Chinese Citizenism math:
1 Chinese citizen + 1 digesting dog meal = 5 happy roadside turds
600 million 1949 Chinese + 1 Mousy Dung = 550 million Chinese
1300 million Chinese + 50 million Tibetans = 1300 million Chinese
Listening US citizens, they are taxed on the priviledge of being taxed.
US citizenism at work.
Judging by some of these comments, ZH reading-comp is pretty abominable.
... not only abomable, it aint too good neither.
at least there is no tax
on hookers and cocain...
Speaking of Cheasapeake and lousy tax policy...
Cheaspeake’s 1% Tax Rate Shows Cost of Drilling Subsidy
My fuck, if the wind and solar guys got sweetheart treatment like this....
Corporate tax breaks being pocketed by the Officers.... can you say kleptocracy?
Anyone ever hear of the Johnstown Flood Tax?
As a result of the damage from the 1936 flood, the Pennsylvania General Assembly imposed an emergency tax on all alcohol sold in the Commonwealth. The "temporary" 10% tax was initially intended to help pay for clean up, recovery, and assistance to flood victims. The tax still exists and in 1963 was raised to 15% and again in 1968 to 18% (not including the statewide 6% sales tax). The nearly $200 million collected annually no longer goes to flood victims, however, instead going into the general fund for discretionary use by lawmakers.
Remember also the Social Security tax.
The net revenue hasn't gone to SS payments since Reagan/Bush dipped into it to pay for tax "cuts"; it is all siphoned off to the general fund and replaced with worthless, never to be repaid, IOUs. Remember the "lockbox" of the 1992 election? Never happened, but that's no surprise.
if everyone hates fucking taxes, than why does everyone still pay them !!!!!...... Quit the rigged game and enjoy your life and kill the machine in the process
Tax tax tax.
It's the soldiers dying in vain to protect the systemic annihiliation of their own blood that is priceless.
Patriotism monetized that's what.
Still clueless about ghosts in Iraq?
"The flag follows the dollar, and the troops follow the flag" - Bgdr. General Butler
Calculating the True Tax is easy: add up all government expenditures at all levels (including inflation-paid deficits) and divide by the # of tax payers. There must be some accounting of course for foreign-bought Treasuries as well, since they pay for a good part of the current deficit.
You could get fancy and divvy it up by income class, which would be informative.
I haven't yet found a source that appears to capture all forms of spending at all levels.
http://www.usgovernmentspending.com/downchart_gs.php?year=1900_2014&unit...
http://en.wikipedia.org/wiki/Government_spending
You left out sales tax, hidden excise taxes, "registration" and other "fees". Next time you fill your tank, read the pump. About 1/2 the price of gas is state & federal taxes.
inflation tax included?
Canadian figures.
I am single, pay property tax on a modest yet underwater home. The provincial tax rate is 10% but I have never had to pay separately to it. My completely basic deductions seem to keep that at bay. I pay into a modest extra company health and insurance plan. It covers fairly decent dental and various life and disability insurance. X bucks for a toe, etc... Prescription coverage and other things. Of course most health care is provided from the fed and provincial taxes I pay. With all deductions on my pay and my property taxes, I pay a tax rate of 30%. I make just under 60K gross.
The Canadian government was doing well in paying down debt for a while. And that was with supposed left wing governments. The trend has reversed lately, with a very conservative government. Also due to bailouts and such. Of course the government, whatever way it leans is a big machine with lots of leaks. So far I am mostly satisfied with my tax rate versus the massive country it pays to run. I am completely unsatisfied with paying taxes to a current government that is at odds with the country in it's character and history, as well as it's citizens.
This government seems like being bought out by a rival company. And I know too well what that is like.
I'd say 50 - 75 percent of income is close yes.
Healthcare is not a tax unless it is mandated by the gov't. With the same reasoning you utilized to define non-mandated healthcare as a tax you could also classify food expenses as taxation because food is necessary to survive. If you don't eat you die.