Income tax time again

[David S]

Recently I helped someone with their taxes so I saw how much someone with a roughly median income has to pay.
His situation was like this.
Income from all sources - $50,000.
Federal income tax -    $7000
Social Security - $3000
State tax   -   $1800
Medicare   -$300
Total            $12300.

In other words this person paid almost 25% of his income in taxes, and that doesn't count the 6% state sales tax or the 38 cent per gallon gas tax.
Also he recently bought a house, so next year he will pay an additional $3000 in property tax. That will bring the total to 30% of income.

Does this sound like too much for someone making only $50,000 per year?

[MaC]

it's exists.  That within itself is a large enough problem.

[Speed of Sound]

Im all for the income tax, and it being at that rate, but then I want it to be JUST the income tax. Thats it. No prop. taxes, no sales tax, no gas tax, just an income tax, then 25 sounds fine to me.

[MaC]

Im all for the income tax, and it being at that rate, but then I want it to be JUST the income tax. Thats it. No prop. taxes, no sales tax, no gas tax, just an income tax, then 25 sounds fine to me.

Heh, I'd be about the opposite.  They could start a road tax, sales tax, gas tax (property I wouldn't be happy with, only if they abolish the income tax.  There's something to be said for keeping all the money you directly work for.

[TeePee4Prez]

Too much, but that's because of some of the regressive use taxes, not the progressive income tax.

[TheresNoMoney]

Too much, but that's because of some of the regressive use taxes, not the progressive income tax.

Exactly.

I'd like to see most regressive taxes like the gas tax, sales tax, and property taxes either be greatly reduced or eliminated. Income tax is okay since it's progressive.

[nlm]

I like the idea of a national sales tax while getting rid of the income tax - at least on earned income.

[David S]

Too much, but that's because of some of the regressive use taxes, not the progressive income tax.

Exactly.

I'd like to see most regressive taxes like the gas tax, sales tax, and property taxes either be greatly reduced or eliminated. Income tax is okay since it's progressive.

But the income tax took by far the largest chunk.

[jokerman]

Too much, but that's because of some of the regressive use taxes, not the progressive income tax.

^^^^^^^^

[opebo]

I would say that at $50,000, 25% is about right.  The thing that is wrong with the current tax system is that the rates should increase greatly above that level, to at least 50% and preferrably 70% at above $200,000/year.

Probably it would be possible to give the worker in your example a small tax cut if we tremendously increased taxes on his betters.

[Filuwaúrdjan]

What do you mean only $50,000?

O/c not possible to answer the question as I don't know what sort of job this guy does.

[○∙◄☻¥tπ[╪AV┼cVê└]

What do you mean only $50,000?

O/c not possible to answer the question as I don't know what sort of job this guy does.

Well Wolf Blitzer and his right-wing friends think that $50,000 a year is chump change, and they control the media, so they must be right.

http://transcripts.cnn.com/TRANSCRIPTS/0504/11/nfcnn.01.html

[opebo]

What do you mean only $50,000?

O/c not possible to answer the question as I don't know what sort of job this guy does.

Well Wolf Blitzer and his right-wing friends think that $50,000 a year is chump change, and they control the media, so they must be right.

It is chump change, unless you live in a remote wilderness like South Dakota or Mississippi.  However it is also quite a bit more than most Americans recieve.

[Undisguised Sockpuppet]

Cut taxes for EVERYONE(not the rich) and remove the rich's loopholes

[David S]

What do you mean only $50,000?

O/c not possible to answer the question as I don't know what sort of job this guy does.

I don't know what wages are like in the UK but around here 50k is not much. An unskilled worker on an automotive assembly line would make more and get better benefits.

[opebo]

What do you mean only $50,000?

O/c not possible to answer the question as I don't know what sort of job this guy does.

I don't know what wages are like in the UK but around here 50k is not much. An unskilled worker on an automotive assembly line would make more and get better benefits.

Only if they are protected by a union.  The vast majority of unskilled workers in the US have no union, and make around $6-10/hour.  Remember, Dibble, the median income is much less than $50,000/year.

According to the Bureau of Labour Statistics the median earnings of full time workers are only about $35,000/year.  And that leaves out all the millions of part time workers!

[MaC]

What do you mean only $50,000?

O/c not possible to answer the question as I don't know what sort of job this guy does.

I don't know what wages are like in the UK but around here 50k is not much. An unskilled worker on an automotive assembly line would make more and get better benefits.

Only if they are protected by a union.  The vast majority of unskilled workers in the US have no union, and make around $6-10/hour.  Remember, Dibble, the median income is much less than $50,000/year.

According to the Bureau of Labour Statistics the median earnings of full time workers are only about $35,000/year.  And that leaves out all the millions of part time workers!

Since when was Dibble part of this conversation?

[Filuwaúrdjan]

I don't know what wages are like in the UK but around here 50k is not much. An unskilled worker on an automotive assembly line would make more and get better benefits.

Just looking at some census stuff that's all... according to the census (which is a few years old now o/c) the median earnings for (full time) male workers is $37,057 (for female (full time) workers it's about $10 thousand less). Interestingly the average family income is about $50 thousand dollars.
Now in Michigan the average earnings for a (full time) male worker are $41,897.
$50,000 isn't a *lot* as such, but it's not really deserving of the term "only...".

[David S]

I would say that at $50,000, 25% is about right. 

Looks like we need to run this one by the OHT. (Opebo hypocrisy test).
My efforts to contact your tax attorney have been fruitless so I'll have to calculate your taxes myself. First since you are not a resident of any state you probably owe zero state tax. You have no wages so you don't pay Social Security or Medicare tax. That just leaves federal income tax. As I recall you have stated your income as somewhere in the 35-40 k range, but just for comparison's sake lets assume your income was the same as this individual. Using the standard deduction your tax would be $7000 too. However as I recall your money comes from a trust fund which was set up as a result of an inheritance. If that is the case then you may owe no taxes at all! So while you are quite happy with someone else paying 25% of their hard earned income to taxes, you pay somewhere between zero and 14% and that's on income you didn't have to work for. Shame on you. This one flunks the OHT test.

[memphis]

I think that you have to consider what you are getting for all your tax money.
Schools- Free Education for your children K-12
Roads- You couldn't get to work to make your money without them
Police protection- The cops suck when they're handing you a speeding ticket but you'd better thank Jesus they're there.
Fire Protection- Just might come in handy
Military Protection- There's a lot of pork here but it's a worthy cause
Parks- Making life more pleasant
Social Security- Keeping you from having to support your elderly parents/grandparents.
Medical research- Hopefully, we can kick cancer before I'm old
College Aid-Most Americans wouldn't make it past high school without it.

I'm not here to argue that everything the government does is efficient or wise, but you have to consider all the good things you're getting before you bitch about taxes.  Federal Budget for 2006 is 2.6 trillion dollars, which comes to about $9,000 for each man, woman, and child. If you're not paying that much for each member of your family, you're getting a bargain.

[David S]

I think that you have to consider what you are getting for all your tax money.
Schools- Free Education for your children K-12
Roads- You couldn't get to work to make your money without them
Police protection- The cops suck when they're handing you a speeding ticket but you'd better thank Jesus they're there.
Fire Protection- Just might come in handy
Military Protection- There's a lot of pork here but it's a worthy cause
Parks- Making life more pleasant
Social Security- Keeping you from having to support your elderly parents/grandparents.
Medical research- Hopefully, we can kick cancer before I'm old
College Aid-Most Americans wouldn't make it past high school without it.

I'm not here to argue that everything the government does is efficient or wise, but you have to consider all the good things you're getting before you bitch about taxes.  Federal Budget for 2006 is 2.6 trillion dollars, which comes to about $9,000 for each man, woman, and child. If you're not paying that much for each member of your family, you're getting a bargain.

Another way to look at it is if you're getting a bargain then someone else is getting ripped off.

Some other things you might want to consider:
Despite the huge amount the government takes from us they still run a $500 billion deficit per year which increases the national debt. That's a problem we are passing on to future generations.
You may like social security and medicare but those programs are way underfunded. In fact over the long term they are underfunded by about $80 trillion in today's dollars as Bruce Bartlett points out in this article http://www.ncpa.org/edo/bb/2005/20050427bb.htm The $80 trillion is about 6 or 7 times our current GDP. That's in addition to all the taxes that government expects to collect over that time period. And it is the result of a government that absolutely will not behave responsibly. Rather than cutting out pork projects and trying to streamline medicare, government just adds on more pork and adds a drug program to medicare.
Politicians know the big problems will show up in the distant future, long after they are out of office, so they don't care about it. In the short term they look good to their constituents because of all the free goodies they're handing out.

In the mean time government grows bigger and bigger and America becomes more and more socialist. The big programs like social security, medicare and medicaid just keep growing never getting smaller. Eventually they could consume the entire GDP, except that economic collapse will occur before that happens.

[dazzleman]

What I find interesting is how much discretionary domestic spending has increased under this supposedly conservative administration.

And yet, it's still not enough.  Bush has massively increased federal education spending, and the liberals are still complaining it isn't enough.

With all these increases, are schools demonstrably better than they were in, say, 1999, the heyday of the Clinton presidency?  I think we know the answer on that.

The other interesting thing is that the same people who say Bush isn't spending enough pine for the days of Clinton, when domestic spending was quite a bit less.  It seems we were getting along pretty well back then with lower spending, but the answer is always said to be more spending.

I think that we should simply reduce our spending to the levels of 1999 and be done with it.  That would save hundreds of billions of dollars per year without, apparently, really hurting anybody.

[Citizen James]

What I find interesting is how much discretionary domestic spending has increased under this supposedly conservative administration.

And yet, it's still not enough.  Bush has massively increased federal education spending, and the liberals are still complaining it isn't enough.

With all these increases, are schools demonstrably better than they were in, say, 1999, the heyday of the Clinton presidency?  I think we know the answer on that.

The other interesting thing is that the same people who say Bush isn't spending enough pine for the days of Clinton, when domestic spending was quite a bit less.  It seems we were getting along pretty well back then with lower spending, but the answer is always said to be more spending.

I think that we should simply reduce our spending to the levels of 1999 and be done with it.  That would save hundreds of billions of dollars per year without, apparently, really hurting anybody.

Mostly because he's demanding additional expenses in education which are higher than the additional funds.  Frequent standardized testing isn't cheap.

And though I applaud the idea of making sure there that all students have teachers who are "highly qualified" (That is highly trained and skilled in both educational technique, pedagogy, and their subject area), only hardcore idealists are going to dive an extra 25k into debt to get a postgraduate degree for a job which pays about 42k a year.  (and even if you mistakenly believe that summers don't count, , or that teachers just go home and relax after 3 - rather than spending an extra 6 hours doing lesson planning, grading papers, and filling out volumes of paperwork - that would still be well below the 'typical' hourly pay rate for your 'typical' holder of an advanced degree.

If you want "natural market forces" to fill that gap, you're either going to have to pay a lot more, or (in typical GOP fashon) allow the private sector to ignore the rules and provide poor instruction and moderate cost for most and good instuction for high cost for a few.

[Citizen James]

I think that you have to consider what you are getting for all your tax money.
Schools- Free Education for your children K-12
Roads- You couldn't get to work to make your money without them
Police protection- The cops suck when they're handing you a speeding ticket but you'd better thank Jesus they're there.
Fire Protection- Just might come in handy
Military Protection- There's a lot of pork here but it's a worthy cause
Parks- Making life more pleasant
Social Security- Keeping you from having to support your elderly parents/grandparents.
Medical research- Hopefully, we can kick cancer before I'm old
College Aid-Most Americans wouldn't make it past high school without it.

I'm not here to argue that everything the government does is efficient or wise, but you have to consider all the good things you're getting before you bitch about taxes.  Federal Budget for 2006 is 2.6 trillion dollars, which comes to about $9,000 for each man, woman, and child. If you're not paying that much for each member of your family, you're getting a bargain.

I agree.  I think the more important question is whether or not the money is being spent wisely.  Arguably, the first, fourth, and fifth items on your list tend to be primarally funded by the states.

Still, the questions remain for many - would an extra 3000 be enough for you to take care of your grandparents for a year?  (or are you cool with tossing them out on the street?)

Is blowing stuff up in Iraq worth an extra $500 of your pay, in addition to the 3000 or so you're already spending on national defense.

Is 1500 or so reasonable compared to large numbers of people in lower incomes (including children and people who perform basic labor) dropping dead en masse.  Does the safety and well being of children mean anything after they are born?  If the many poor who do the less 'desirable' jobs die off for a lack of even minimal healthcare, what will the laws of supply and demand do to the cost of basic services - and all the other services which depend on them?

Is $50 worth not having the above stare to death?  Is $20 worth having a larger group of highly educated individuals for companies to choose from for more complex jobs (remember supply and demand again - when the people are well educated, the cost of labor declines for jobs requiring educational atainment).

What about the people who left a limb behind in Vietnam?  Or in Iraq?  Do we just dump them on the street and ignore their health needs despite their answering the call of their country?  Or is "support our troops" nothing more than a catchphrase.

What we need is to make sure the money is being spent responsibly, not a short-minded strategy which ignores long term gains in favor of short term greed.

[dazzleman]

If you want "natural market forces" to fill that gap, you're either going to have to pay a lot more, or (in typical GOP fashon) allow the private sector to ignore the rules and provide poor instruction and moderate cost for most and good instuction for high cost for a few.

Isn't this more or less what is happening now, under the localized public school systems?  Wealthy districts provide good instruction at high cost, and poor ones provide poor instruction, at a lesser, but still high, cost.

I find it hard to believe that the costs of additional standardized testing are anywhere close to the additional educational spending.

I have a friend whose husband is on the Board of Education for a district in suburban New York.  Their district was getting a federal grant to do a whole lot of unnecessary work reconfiguring the school buildings, when there was nothing really wrong with them the way they were.  This is probably a perfect example of how billions of federal education dollars are being wasted on things that don't improve education one iota.  This is the typical result whenever the federal government gets involved in anything.