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Just finished my taxes for 2010. I still pay an absurdly small amount (effective tax rate of 4%) but I actually did pay federal income tax instead of getting back more then was withheld which happened last year.
Still it feels kinda nice to get over that 50% threshold (half of Americans don't pay any income tax).
I was reading a wikipedia article the other day about Pennsylvania and was amazed to read they have an income tax of (flat) 3.07%. Unbelievable when in Australia it's around 14% and then it goes higher depending on how much you earn. Just so that the government can continue to pay pregnant teenage mothers and support lazy teenagers/young adults.
But what do you mean taht half of Americans don't pay any income tax? How is that possible?
Yeah, I d like too know how they pull that off. Off the top of my head I can think of ridiculous budget deficits, sales taxes, property and capital gains taxes set at highway robbery rates or just plain us not understanding that Americans say they don t pay income tax if their payroll taxes are their final taxes.
Dude, that's state income tax; federal marginal income taxes range from 10 to 35%.Quote:
Originally Posted by Draco
Old story; various federal deductions and credits allow approximately half of tax filers zero liability (or even they get paid some money if they work and have children). I wouldn't be surprised if a similar situation was present in Australia as well.Quote:
But what do you mean taht half of Americans don't pay any income tax? How is that possible?
Not true; consumption taxes in the US are much lower than in Europe (though I'll admit our property taxes are pretty high), and long term capital gains are still considered pretty low. Also when people say they pay zero liability or get money back, they normally do not mean that they just don't pay any above withholding (certainly the 50% statistic doesn't mean that).Quote:
Originally Posted by Hazir
The biggest source of the 'money back' people is the Earned Income Tax Credit, which is a refundable credit (meaning that even if your income tax liability is zero, the EITC can still pay you money). It's essentially an incentive to work for low-income households with children. The 'zero liability' crowd are mostly because deductions eliminate their taxable income to zero.
I see then, thanks for clearing that up. In that case then, America isn't that comparable to Australia.Quote:
Originally Posted by wiggin
You are entitled to such a benefit if you work and have children. But there's a particular amount you can earn before you become ineligible.Quote:
Old story; various federal deductions and credits allow approximately half of tax filers zero liability (or even they get paid some money if they work and have children). I wouldn't be surprised if a similar situation was present in Australia as well.
I'm certain they do a great deal more with your money than that. Why don't you tell the truth? :mad: :down:Quote:
Originally Posted by Draco
The wealthy pay through the nose.Quote:
Originally Posted by Draco
Maybe if you learn to speak english you will be capable of earning a decent salary. :haha: How old are you?Quote:
Originally Posted by Lewkowski
It's not as bad as it sounds. The wealthy have big noses :downcast:Quote:
Originally Posted by Lewkowski
JOOS
http://img.photobucket.com/albums/v3.../socialism.jpg
http://img.photobucket.com/albums/v3...4352194343.jpgQuote:
Originally Posted by wiggin
Wooo that's tiny.Quote:
Originally Posted by Lewkowski
Over 20% of my income is taxed at 40%.
Most of the rest is taxed at 20%.
Just as well as the govt didn't introduce the 50% tax on bankers' bonuses they were threatening, or I'd have half my bonus taxed too. :)
What's your effective tax rate, though? (that is, the percentage of your total gross income you pay in taxes) A large chunk of Americans have marginal (state + federal) rates of around 20-25%, but the effective rate on all gross earnings tends to be a lot less.
Hell, I don't even know what a real effective tax rate is. If you include contributions made to tax-deferred retirement savings, our effective tax rate for 2010 is quite a bit lower than if you exclude them. I don't have all of the numbers, but I think our combined state/federal effective rate was around 13% this past year if you include retirement savings, but about 14% ignoring tax-deferred accounts.
While the 50% not paying federal income tax sounds like a lot, I think we also need some perspective. What do you guys think is the household income for the highest 10% in the US? It works out to approximately $150,000. That sounds like a lot of money, but assuming two wage earners that's only a $75k salary - not bad, but hardly something most Americans would consider as the top 10% - a pair of decently educated people could easily be making that by the time they're 30. That implies that the bottom 50% of households are probably making a lot less than we think they are, and maybe some of the outrage directed at their lack of income tax is a bit misplaced.
Seems like a bit of a trivial bit of trivia given the top 0.1%Quote:
Originally Posted by Ender
You're making baby Reagan cry :(Quote:
That implies that the bottom 50% of households are probably making a lot less than we think they are, and maybe some of the outrage directed at their lack of income tax is a bit misplaced.
It's meaningless to say, 'well we know the top 0.1% make X, so that means 99.9% of Americans make less than X ridiculous amount'. But it's a lot more meaningful to say that 9 out of 10 American households make less than what many would consider a very pedestrian-seeming income level (and redefines our conception of 'rich'). It's easy to forget how few Americans actually earn salaries many of us would aspire to. More broadly, I think it questions what we consider 'middle class'. If you had asked me before I saw the breakdown whether a family income of $150k was middle class, I would have likely answered in the affirmative, albeit on the high end. Now, I'm not so sure.Quote:
Originally Posted by Nessus
The bigger issue to me is that I sometimes fail to realize just how rarefied my social and professional circles have become, at least with respect to income. The majority of people I interact with on a regular basis are probably going to be in that top 10% by their 30s. None of us consider it 'wealthy' since we have so many demands on that money - retirement savings, housing, charity, education for our kids, etc. But in reality the vast majority of Americans are making do with less, and they're largely invisible to us.
I am in full agreement here, and it's somewhat more disappointing in states which claimed to be about equality rather than the Lewkowskian dream :(Quote:
Originally Posted by wiggin
Rub it in, why don't you!Quote:
Originally Posted by wiggin
That's the weird thing, though; I never considered my social circles to be wealthy. To me, the wealthy had large homes, exotic vacations, fancy cars, that sort of thing. Most of my circle are boring professional-types who religiously contribute to retirement savings, college funds, their loan for a Toyota Camry and the mortgage on their nice but unprepossessing home. It makes me wonder how, say, those at the 60th percentile are doing.Quote:
Originally Posted by Nessus
Of course, these stats are probably skewed a lot in that they aren't corrected for age. It's a lot less unreasonable for a couple in their 50s to be making that kind of money than a fresh college graduate. Even so, it's still food for thought.
(For those of you who are wondering, no, my wife and I don't come even close to that number.)
Yes the infrastructure in my city is great, there ;)Quote:
Originally Posted by Aimless
Other people don't save as much for retirement and college tuition, go on cheaper vacations, have cheaper homes, have older cars, buy less expensive gadgets and clothes, i.e. the way the top quintile lived a few decades ago.Quote:
Originally Posted by wiggin
I was being facetious, but it does seem somewhat amusing how distant you are from my experience as an "ex-pat" from a poor home trying to maneuver in academia :)Quote:
Originally Posted by wiggin
Curious what the source is. Though if true it certainly hasn't done much about actual spending. Most were probably contractors. You would be amazed at how many contractors our government employes. I've seen entire buildings literally filled with full-time employees who are government contractors. Technically easy to lay off, except they were working on expensive projects that just keep spending somehow.Quote:
Originally Posted by Nessus
Isn't the reason pretty obvious? A vast majority of the people who lost their job due to the recent recession were in the private sector. I highly doubt that public sector jobs make up a smaller percentage of the work force now than they did in 2008; in fact, I'm willing to bet the opposite is true.
Hard to say because of the limited information included, but this also probably includes census workers.Quote:
Originally Posted by Dreadnaught
I'm guessing they're talking about 2010 in the image. In that case, it's entirely true, but for somewhat odd reasons. See, public sector employment was steady or slightly increasing (stripping out the census employees) during the worst of the recession due to countercyclical spending. Currently, federal employment hasn't dropped too much yet (though it likely will), but states and municipalities have seriously slashed their workforces. In contrast, the private sector had more flexibility with their workers (and don't do countercyclical spending), so they cut jobs much earlier (late 2008/early 2009) and employment started picking up in early 2010. Obviously the headline numbers are still bad, but for a good chunk of 2010 private sector employment has been increasing in an accelerating manner - countered by accelerating cuts in state and local government payrolls.Quote:
Originally Posted by Dreadnaught
I don't know how contractors fit into the data, but that's generally been the story for 2010. It doesn't really make a comment on the overall trends or whether the Obama administration favors 'big government' - it has more to do with the dynamics of a recession in terms of public and private employment.
I do have to say that the graph in question shows why no one should take statistics at face value.
I'm 26. I make a bit over 50k. The median household in America makes 49,777. http://en.wikipedia.org/wiki/Median_household_incomeQuote:
Originally Posted by Being
So I think I'm doing just fine. :)
Based on the frenzied media, at least one of your nation-building wars is run more or less by contractors, so I wouldn't be that amazed, even if the media's full of crap. But it fits pretty neatly into the culture where government employees are about on par with cock-roaches and the entrepreneur is the übermensch.Quote:
Originally Posted by Dreadnaught
:up:Quote:
Originally Posted by Lewkowski
What do you do?
It's sort of the opposite actually. The contractors are a function of government trying to do too many things at once. The number of "social media experts" hired by government agencies as full-timers (or contracted out to defense contractors, FFS) is shocking.Quote:
Originally Posted by Nessus
Bankrupts the medianQuote:
Originally Posted by Timbuk2