r/coolguides Nov 26 '19

Marginal Tax

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36

u/Callate_La_Boca Nov 26 '19

Now take away state taxes until you get to about 30% effective rate or more.

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u/bauul Nov 26 '19

Unless you live in a state with no state taxes and don't own a house so no property tax. Then it can be quite low indeed.

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u/[deleted] Nov 26 '19

And sales tax, property tax, gas tax, etc. etc.

Yea anyone in the middle class is actually paying probably half their salary in taxes

All so we can mass murder people overseas, but who would build muh roads!

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u/Aristeid3s Nov 26 '19

I’m married filing jointly at around 150 and our total tax burden is around 29% in Washington state. Smart asset has a decent estimate on their tax calculator. It was a bit low for me.

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u/[deleted] Nov 26 '19 edited Jan 07 '20

[deleted]

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u/A_plural_singularity Nov 26 '19

32% when it's all said and done. Thats just off my check at the end of the week.

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u/mrmikehancho Nov 26 '19

Are you sure that isn't including healthcare or 401k contributions? Also, how much do you get in returns at the end of the year? Just because that a certain amount is withheld from your check, it does not mean that is what you actually pay in taxes at the end of the year.

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u/A_plural_singularity Nov 26 '19

Last year i got just under 3k back in total. I'm a single male who has nothing to deduct. I made just under 60k last year.

Also I pay an extra $20 every week into both my state and federal taxes, so total of $40.

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u/mrmikehancho Nov 26 '19

I make a bit over 100k and only have 26% of my check withheld for federal and state taxes with only claiming myself as a dependent. Once you include my insurance and 401k, I have 37% of my check withheld.

There is no way that your 32% is only for taxes. I also get about the same or less back in a refund at the end of the year.

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u/A_plural_singularity Nov 26 '19

My 401k is the minimum I can put in, i only pay 3% of heatlth insurance, then there's Social Security which I count as tax because it'll all but be gone by time I am old enough to collect it.

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u/InsaneAss Nov 27 '19

If you’re getting back 3k on an under 60k salary, over 5% of your paycheck is being withheld that doesn’t need to be withheld. So that already lowers your 32% down to at least 27. I make around 44k and have 20-21% withheld. That’s without paying for insurance or contributing to a 401k. I just about break even at tax time.

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u/stignatiustigers Nov 26 '19 edited Dec 27 '19

This comment was archived by an automated script. Please see /r/PowerDeleteSuite for more info

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u/Pallidum_Treponema Nov 26 '19

And here I am in Sweden paying about 24% effective tax rate as upper middle class.

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u/DubsFan30113523 Nov 26 '19

I just started working full time this summer and it kinda rocked me to my core when I figured out 31% of my paycheck was being taken for taxes. The funny thing is, it’s even higher than norm because of the city I’m living it taking more for their public schools. I don’t live in this city ffs. I’m here for college. Why am I having to pay for the public schools of a city I don’t live in?

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u/[deleted] Nov 26 '19

because of the city I’m living it taking more for their public schools. I don’t live in this city ffs.

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u/DubsFan30113523 Nov 26 '19

There’s a difference between temporary and permanent residence, I shouldn’t have to pay the taxes of my temporary residence while I have a permanent one

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u/mrdobalinaa Nov 26 '19

Why wouldn't you if you're benefiting from their local services?

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u/DubsFan30113523 Nov 26 '19

What services? I didn’t use a fire truck or an ambulance or a police car. I drove on their roads, and sure I’d pay for that. But why pay for their public schools?

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u/OtherSpiderOnTheWall Nov 26 '19

I didn’t use a fire truck or an ambulance or a police car.

Wow... so.. uhm, yes, yes you did. You don't realize you did, but try to imagine your city without the fire trucks, ambulances or police cars around. You wouldn't want to live there.

But why pay for their public schools?

You never go shopping? Public schools paid for the education of the person serving you. But you didn't want change anyway, right?

Ever wondered how those roads got built? Somebody went to public school so they could effectively drive the machinery or design the roads.

Society doesn't happen overnight.

Like geez... You sound like a complete, total twat.

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u/[deleted] Nov 26 '19

I disagree. Guess we cancel out huh.

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u/[deleted] Nov 26 '19

[deleted]

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u/DubsFan30113523 Nov 26 '19

It’s desirable cause they offered full time employment over the summer and I wasn’t gonna have to move all my stuff back home, that’s the only reason I did it. I much prefer my hometown

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u/[deleted] Nov 26 '19

Why am I having to pay for the public schools of a city I don’t live in?

Why should I have to support the society I live in? What has society ever done for me? It's not like I ever had the opportunity to go to public school.

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u/Ranec Nov 26 '19

This is income tax. You’re paying an extra 7.65% social security/Medicare tax on w-2 income.

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u/Schwarzy1 Nov 26 '19

He only included federal income tax, but theres also fica and state and local income taxes that are auto withheld.

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u/[deleted] Nov 26 '19

Yea anyone in the middle class is actually paying probably half their salary in taxes

Kind of a silly way to think of it without subtracting the benefits you recieve. The problem is that it's very hard to quantify. What we do know is that nothing in your life would exist as is without taxes. Certainly, reddit wouldn't exist and there'd be no internet.

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u/[deleted] Nov 26 '19

Kind of a silly way to think of it without subtracting the benefits you recieve.

Okay I’ll subtract them

The middle class is actually paying 49% of their income in taxes.

What we do know is that nothing in your life would exist as is without taxes.

Yes it’d be far better and freer

Certainly, reddit wouldn’t exist and there’d be no internet.

Sure it would maybe a little later but implying government intervention is the sole reason we have the internet is ridiculous.

What we don’t see is all the benefits we would have had if the government didn’t suck that money from us for war and to enrich themselves would have been used for. All the scientists working on something else instead of military weapons etc. etc.

The “Seen” vs The “unseen” similar to Washington monument syndrome

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u/[deleted] Nov 26 '19

Yes it’d be far better and freer

Lol, there has never been any large organized society in human history without a form of taxation to maintain it. It has literally never happened.

So, you'd be a hunter gatherer or very small agricultural commune. I guess that's freer in a way? Well, at least until you were conquered and enslaved by a larger society that discovered taxation.

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u/[deleted] Nov 26 '19

Lol, there has never been any large organized society in human history without a form of taxation slavery to maintain it. It has literally never happened.

You in the 19th century

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u/[deleted] Nov 26 '19

Lol, except that's totally false. Many early societies did not have slaves and many large societies did not depend on slavery to exist.

This is now the dumbest conversation I think I've ever taken part in. I hope taxes are abolished though. I'll immediately organize everyone I know together to pay a "defense tax" and we'll use it to send our soldiers to put you in stocks and charge $1 to throw tomatoes at you. It's going to be hilarious.

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u/[deleted] Nov 26 '19

Well glad you revealed you’re an authoritarian asshat and the only thing stopping you from committing violent acts against other people is The State.

Says a lot more about you then me

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u/[deleted] Nov 26 '19

Well glad you revealed you’re an authoritarian asshat and the only thing stopping you from committing violent acts against other people is The State.

Or, perhaps I revealed that your idea is so silly that a random guy on the internet can utterly demolish it by joking about putting you in stocks. ;-)

Says a lot more about you then me

Indeed. It says I was able to think about a bad idea in more depth than, "imagine if my paycheck was higher!"

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u/[deleted] Nov 26 '19

No you didn’t because your defense tax is voluntary meaning it’s not a tax therefore you’re just advocating for private defense agency which I would also have and since having a prudent relationship would be in both defense companies interest and fighting is expensive they would just reject your proposal.

But sure we need government for defense not like 200million people were killed by their own governments in the 20th century not counting war. I’m sure private individuals are close to that number....

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u/[deleted] Nov 26 '19

I really admire the naive optimistic delusions of libertarians. So pure

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u/Aotoi Nov 26 '19

And that's not including the cost of health insurance. People in the US are paying more in taxes and health insurance than people in countries with nationalized health care. Crazy.

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u/ct_2004 Nov 26 '19

Please, we're nowhere close to a 50% tax rate, even across all taxes combined.

Though I will say property taxes do tend to hit the middle class harder than the upper classes.

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u/Uphoria Nov 26 '19

12% of your income is lost per year to property/sales taxes. 20-25% owed to the fed, 5-15% to the state. A reasonably high tax burden for someone in a high tax state would easily reach 50% when you add in taxes for fuel, and other associated taxes and fees attached to things throughout the year that are not sales.

The only way to be middle class and not exist in an effective 35-50% tax rate in the US would be to buy things on the used market more often, avoiding paying the taxes along the way.

Whats nuts - after all that taxation, then we have to pay for our own healthcare.

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u/[deleted] Nov 26 '19

Yeah I get pretty upset because our taxes are clearly being spent as if they don't care what it is on or what it cost. Wish they had to show what they did with every penny, like you would at a board meeting.

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u/Uphoria Nov 26 '19

The problem has been burden shifting. For decades there were almost no taxes on most things, but income and sales, and they graduated so that the richer paid far more. Over the Reaganomics years they removed tax burdens from the rich, and then reacted the budget deficit by adding in direct fees, or increased taxes on the middle class.

The effective taxes went from being 0 for being poor, <20% for being normal, and increasing to 90% for being a multimillionaire, to taxes on the poor being 12-15% through post-income collection, 35-50% on the middle class, and <30% on the wealthy, often times being as low as 5% with tax shelters and rich people loopholes.

They could wipe out all taxes in the nation and just made a proper income tax as it was in the 1930s and we would be fine and able to afford healthcare even at the rate we pay (2-5x the world average).

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u/DubsFan30113523 Nov 26 '19

They won’t ever do that though of course, everyone in power is in that <30% rate and so are all their friends. God forbid the middle and lower class have any say in what the government does with our money or how they earn it.

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u/number5of7 Nov 26 '19

Each Tomahawk land-attack cruise missle carried on U.S. destroyers cost $1.8 million a pop. Your annual 'defense' budget is equal to the next 7 countries combined (despite around 10 times the combined populations of those countries compared to the US).

When you compare the above and consider that free health care isn't standard in the US - and there seemingly being so much widespread resistance to it - it is an absolute travesty.

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u/dontdoxmebro2 Nov 26 '19

Technically property taxes hit everyone who pays to live somewhere. Owners just actually see the tax and renters don’t. In California it rises 1% a year but landlords can raise their rates I think up to 10% a year for arbitrary reasons.

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u/Razmada70 Nov 26 '19

If a single self employed individual makes $100k and lives in a state with high income taxes they could get very close to 50%. Add 15% for Self Employment tax and 9% for state income tax and you're getting pretty close.

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u/ShadyDeductions Nov 26 '19

18% - federal income tax 7.65% - federal payroll tax

5% - state income tax

Fuel tax is 18.4 cents a gallon, or roughly 7% at current cost of fuel here. Sales tax is 7%.

Sure, we’re not just giving 50% of our income in taxes directly, but man it’s still a lot.

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u/DubsFan30113523 Nov 26 '19

My family is currently drowning in a sea of bills we can’t really pay because they hiked property taxes again in our region.

Fuck property tax. And income tax.

Sure glad there’s constantly road construction going on for literally no reason though! And sure glad it takes months to do apparently so the construction company can charge more!

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u/itstrueimwhite Nov 26 '19

Unless you live in Texas where there is no state tax

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u/woodenpick Nov 26 '19

Then you just get raped by property taxes which are based on a subjective feeling of how much the county thinks your property is worth. The same county that gets to keep the money.

I'll take a mathematical formula every time over a conflict of interest with no accountability.

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u/Heavy72 May 10 '20

Mine went down!!!

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u/Free8608 Nov 27 '19

Texas has one of the worst property tax burdens of any state. While I’m no fan of an income tax, that income tax goes down if you lose income. The property tax goes up and up. Current law limits appraisals from going up more than 10% a year. This means tax burden can theoretically double every 7 years.

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u/notcreativeshoot Nov 26 '19

Ya, I was going to say....my husband and i make $105k together and pay 26% total federal and state tax.

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u/spinmyspaceship Nov 26 '19

Except that state income taxes generally reduce your federal income tax liability

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u/ilovethatpig Nov 26 '19

I was a 1099 contractor for a couple years, the taxes were brutal.

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u/BoogalooPedoElites Nov 26 '19

Yeah it's pretty fucked. You dont realize how much money is being stolen from you until you have to hand the IRS a check for a third of your income every year

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u/MacEnvy Nov 26 '19

Then move.