Von Fugal <[EMAIL PROTECTED]> writes:
>>
>> Are you sure you pay 40% of your income to taxes?
>>
>> I tracked all my taxes for a month (every piece of tax: sales tax,
>> property tax, gasoline tax, income tax, social security tax, phone bill
>> taxes, etc), and it wasn't that high.
>
> Interesting... I pulled that number out of the air (maybe I heard it
> somewhere and my subconscious brought it up) but I look at a wikipedia
> article:
> http://en.wikipedia.org/wiki/Taxation_in_the_United_States
> and hey look! 40%! wow I'm good! Then another figure: "government will
> collect 30.8% of the nation's income for 2008." And that doesn't even
> account for inflation, the hidden tax. What? You _really_ don't think
> that government benefits from being first to use new money where
> everyone else pays the price? Sure sounds like a tax to me.
Okay, so someone needs to read a little further in the Wikipedia
article, or have some sort of clue from elsewhere about taxes. You do
pay your taxes, right? Or are you still a poor student that doesn't
make enough money to owe anything?
So, marginal tax rate is the rate for the tax bracket you're in. But
you don't actually *pay* that amount. If you think about the little
bit you read, that should be obvious. I mean, take the following
facts: The government will collect 30.8% of the nation's income for
2008. Tax rates are progressive; the percentage is higher the more
income you have. And the average marginal rate is 40%. Clearly the
average person doesn't pay 40%, or the total collection from the
nation's income would be way higher than 30.8%.
What happens is that you start with the 40% (or whatever your marginal
rate happens to be) and apply deductions (there's a standard deduction
if you haven't got enough to itemize), credits, etc. to determine what
your *actual* rate is. And for most people, I believe it will end up
being far less than 30%, especially for low income people who may even
get a small subsidy after the credits are accounted for. I make a
decent salary, and my final percentage was well under 30%.
You're funny, Von. All this outrage, and you don't appear to have
even ever worked through a tax form. Please, join the real world,
it's really not that bad of a place.
--Levi
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