At 07:22 28-01-01 -0600, "Erik Reuter" <[EMAIL PROTECTED]> wrote:
>On Sat, Jan 27, 2001 at 11:44:00PM -0500, John D. Giorgis wrote:
> > You hit the nail with the first sentence. I was actually surprised at
> > how low I pegged it. According to John Stossel on ABC tonight, even a
> > middle class family (husband works as a roofer, the wife works as a nurse,
> > both in St. Louis) pay FORTY-SIX percent of their income in tax.
>
>Is that marginal rate or total rate? For marginal rate it sounds high
>to be me but I could believe it (if I saw the detailed accounting, perhaps
>there are some special circumstances).
>
>But if they claimed that was the TOTAL tax, then I don't believe it.
>There is something fishy there.
>
>Missouri's highest tax bracket is 6% (I won't count exemptions or
>find out whether the intitial amounts are taxed at a lower rate, I'll
>just assume it is all taxed at 6% and so overestimate the tax)
>
>For joint filing, the married couple gets taxed 15% on the first
>$43,050 and 28% on the rest (up to $104,050, which I will assume
>they are making less than). Again, I'll try to overestimate the
>taxes, since you didn't specify their income let's be generous
>and say $100,000. Then they pay 22.4% in federal income tax.
>
>FICA (which includes 6.2% for SS and 1.45% for Medicare) totals 7.65%.
>Normally, employer pays 7.65% and employee pays 7.65%, but if you
>are self-employed you pay both, which comes to 15.3%. The nurse probably
>pays 7.65%, but the roofer could go either way. To overestimate again,
>I will assume their ENTIRE income is taxed at 15.3%. (Also, there is
>normally a cap on SS tax, I think it kicks in at income around $70,000
>but I don't remember exactly; anyway, I will ignore the cap to
>overestimate)
>
>So, adding up 6+22.4+15.3 we get 43.7%, which is probably a significant
>OVERESTIMATE, but it is still less than 46%. If we replace 22.4 with
>the marginal rate 28%, then we could get a number like the one quoted.
>But that is quite misleading since marginal rate is not what most
>people would interpret the statement that a person pays 46% in taxes
>to mean.
>
>I'd really like to see how that 46% number was calculated.
Plus probably 8 or 9 percent on every dollar spent at the store (the last
time I bought anything in Missouri was back in June and I don't recall the
exact sales tax percentage there, but it's that much in many cities), plus
however many cents a gallon for gas, plus the Gore tax on phone service as
well as all the other utility taxes, etc., not to mention all the hidden
taxes: taxes on corporations passed on to the consumer.
-- Ronn! :)
