patrick.net

The person making average income does indeed face a marginal tax rate close to 50%, if not more:

The marginal federal rate in that bracket is 25%

Payroll tax is 15+% (self-employed pay both sides; employees really pay both sides too as the employer's 7.5+% is also part of the cost of hiring decision)

State income tax typically 5-8%; states not having income tax usually get the equivalent money from sales tax or extra heavy property tax.

Property tax usually amounting to 2% of 3x to 5x income, so 6-10% of income.

Obamacare probably amounts to another 2-5% of the income of someone making $40-50k a year, the average income point. It is a tax, as the Chief Justice said. The average wage earner does not have $5k or so saved to pay the deductible in those plans, so they will pay for medical expense out of pocket for small ailments, and they are screwed anyway for major illness.

Reality says

The marginal federal rate in that bracket is 25%

But indigeneous didn't say "marginal" did he?

Call it Crazy says

Bob, he said "taxation"...

And I'm waiting to see the explanation.

Reality says

The marginal federal rate in that bracket is 25%

But, let's not be disingenuous. What does the average person pay in Federal taxes? What percentage of income?

Reality says

Payroll tax is 15+% (self-employed pay both sides; employees really pay both sides too as the employer's 7.5+% is also part of the cost of hiring decision)

I won't even comment on the idiocy of this one.

Reality says

State income tax typically 5-8%; states not having income tax usually get the equivalent money from sales tax or extra heavy property tax.

Again--what percentage does the "average" person ACTUALLY pay??

Reality says

Property tax usually amounting to 2% of 3x to 5x income, so 6-10% of income.

What percentage of the "average" people rent? I would think we should consider them...

Reality says

Obamacare probably amounts to another 2-5% of the income of someone making $40-50k a year, the average income point. It is a tax, as the Chief Justice said. The average wage earner does not have $5k or so saved to pay the deductible in those plans, so they will pay for medical expense out of pocket for small ailments, and they are screwed anyway for major illness.

Again--we're talking about taxes paid.

@pupu70:

Economic decisions are made based on incremental/marginal benefits/costs.

For example, if someone pays you $0.25 for each post you make, you would spend all your day pecking away at the keyboard spouting nonsense regardless whether you believe them, simply because you are not able to earn more money with your time otherwise.

Reality says

Economic decisions are made based on incremental/marginal benefits/costs.

For example, if someone pays you $0.25 for each post you make, you would spend all your day pecking away at the keyboard spouting nonsense regardless whether you believe them, simply because you are not able to earn more money with your time otherwise.

btw--the pupu thing is hilarious. Well done.

We're not talking about how people make decisions. Another poster said the average person pays 50% of his income in taxes. I simply asked him to detail it.

I know you love to distract and change the subject, but let's try to stay on track.

Call it Crazy says

They are considered Einstein, property taxes are included in rents... Duh...

Really--so you consider your rent as a tax? Please tell me more. Which part of the government collects it?

Call it Crazy says

Which you are totally clueless about and unable to figure out on your own...

Nope--I've got it figured out. I just like to see you and your friends twist in the wind as you try to dig yourselves out of this one.

@Tatu

This is where your lack of real life experience making financial decisions come in. Landlords pass property tax onto tenants. Landlords don't even have to compete against other landlords for that portion of the rent raise when the town/city raises property tax.

Obamacare mandate is a form of taxation, as the Chief Justice of the SCOTUS correctly decided. When looking at the specific case of the average $40-50k annual income person, he/she does not have the $5k or so saved up for the deductible, so there is little chance he/she can pay up the deductible before the benefits kick in. If not for the legal mandate, he/she would not be buying the insurance at all. It's just a form of taxation.

Call it Crazy says

What part of the monthly rent payment does the landlord send to the city for his real estate tax payment?

Who do you think is paying the property tax bill? The property tax fairy?

I don't know, but it's not relevant to the discussion unless the landlord is the "average" person to which the poster if referring.

Call it Crazy says

Who do you think is paying the property tax bill? The property tax fairy?

The landlord--not the renter. And the renter is who was being discussed.

Reality says

This is where your lack of real life experience making financial decisions come in. Landlords pass property tax onto tenants. Landlords don't even have to compete against other landlords for that portion of the rent raise when the town/city raises property tax.

lol--actually I understand that quite well. It doesn't change the fact that "rent" is not a tax. It is not paid to the government. It is paid to a landlord. That is a fact.

Reality says

Obamacare mandate is a form of taxation, as the Chief Justice of the SCOTUS correctly decided. When looking at the specific case of the average $40-50k annual income person, he/she does not have the $5k or so saved up for the deductible, so there is little chance he/she can pay up the deductible before the benefits kick in. If not for the legal mandate, he/she would not be buying the insurance at all. It's just a form of taxation.

And I merely reminded you that I wanted to know what taxes were paid. I don't care about deductibles or legal mandates. Just detail the $$ paid in taxes. If you want to consider health care as a tax, by all means, include the actual $$ spent by the average person on such a tax.

tatupu70 says

Landlords pass property tax onto tenants. Landlords don't even have to compete against other landlords for that portion of the rent raise when the town/city raises property tax.

lol--actually I understand that quite well. It doesn't change the fact that "rent" is not a tax. It is not paid to the government. It is paid to a landlord. That is a fact.

In the case of property tax and renters, the landlord is effectively the withholding agent, just like the employer. It's silly to think the renters don't pay property tax, just like it is silly to think the employee doesn't pay the 7.5+% payroll tax that is nominally paid by the employer; the tax is taken into account when the employment contracts and the rental contracts are signed.

tatupu70 says

And I merely reminded you that I wanted to know what taxes were paid. I don't care about deductibles or legal mandates. Just detail the $$ paid in taxes. If you want to consider health care as a tax, by all means, include the actual $$ spent by the average person on such a tax.

I already did that in my original post: for someone making $40-50k average wage, the mandatory insurance comes to 2-5% of his/her income, an insurance that the person would not buy if not for the mandate, as the insurance effectively offers no benefit to the insured as the person is not likely to have sufficient money saved up for the deductibles.

If the landlord is gonna be in business, they must cover all expenses plus turn a profit, so property tax has to be imbedded in the rent unless the lord will be content and able to operate at a loss which is highly unlikely. Even in situation where the owner has paid off the death pledge and can afford to set the rent low they still have to be able to cover property tax, maintenance, HOA, insurance. So the overwhelming odds are that property tax is included in the rent and the renter does not even get a tax break which is one of the reasons why renting vs owning does not pay off in the long run in most situations.

Reality says

In the case of property tax and renters, the landlord is effectively the withholding agent, just like the employer. It's silly to think the renters don't pay property tax, just like it is silly to think the employee doesn't pay the 7.5+% payroll tax that is nominally paid by the employer; the tax is taken into account when the employment contracts and the rental contracts are signed.

Seriously---you can't this much of an idiot.. We're not talking about effectively. We're talking about literally. You either paid tax to the government, or you didn't.

If you write a check or get money withheld in your name that goes to the government, you are paying tax.

If you write a check to someone who then has to pay tax on those earnings-you are NOT paying tax.

It's very simple.

You could just as easily say that when you buy groceries you are paying tax as the cost of those groceries is higher because of the payroll taxes that Safeway has to pay their employees. Reality says

I already did that in my original post: for someone making $40-50k average wage, the mandatory insurance comes to 2-5% of his/her income, an insurance that the person would not buy if not for the mandate, as the insurance effectively offers no benefit to the insured as the person is not likely to have sufficient money saved up for the deductibles.

No, you didn't. And you're wrong, as usual.. The $40-$50K earner may well have insurance through his employer. In which case he's not paying any tax

Call it Crazy says

Your lack of knowledge about real world financial issues is really scary!!

Actually, you're just too dense to follow the thread, as usual.

dublin hillz says

If the landlord is gonna be in business, they must cover all expenses plus turn a profit, so property tax has to be imbedded in the rent unless the lord will be content and able to operate at a loss which is highly unlikely.

Nobody is arguing that, although I think an argument can be made that in the short run, at least, it's not true.. Rents are set by supply and demand and are not really dependent on the owner's cost. You know this because the rent will be pretty much the same whether the owner has a mortgage or owns it outright.

Bobby where is that citation?

Tat

The speaker was referring to an average of western countries.
Which has gone from 12% of GDP to today being 50% of GDP.

This is because, in addition to what has already been mentioned, corporations are also taxed and those taxes are passed on to the customer.

Also the amount of regulation in the US has gone up 200% since it's inception.

Also the rate of growth has gone from 6% in the 60s to 1% in 00s, IMO this has a lot to do with the dearth of growth.

You and your fellow mutts look at this from an employee mentality which by definition gives you a mutt/myopic view of things.

My ilk view this from an employer mentality, which is a painfully 20/20 perspective.

Here is a perspective that you may be able to wrap your wits around.

If 100 people go out to dinner and they all decide that they will split the bill equally. The incentive would be to order without regard to the cost i.e. expensive entree, dessert, alcohol, as your bill is going to be the same as someone who ordered water, chicken, and no dessert.

tatupu70 says

Seriously---you can't this much of an idiot.. We're not talking about effectively. We're talking about literally. You either paid tax to the government, or you didn't.

If you write a check or get money withheld in your name that goes to the government, you are paying tax.

If you write a check to someone who then has to pay tax on those earnings-you are NOT paying tax.

It's very simple.

So according to your logic, you never pay sales tax? As the payment is made to the merchant (who then send it to the state). By your logic, you don't pay gasoline tax either, as the price advertised on the display cards "include all taxes and fees." You see how silly your logic is. The property tax is just like gasoline tax: levied on the asset, but ultimately born by the customer.

You could just as easily say that when you buy groceries you are paying tax as the cost of those groceries is higher because of the payroll taxes that Safeway has to pay their employees.

In this analysis, the payroll tax is already attributed to the cost of hiring an employee; i.e. the money that the employee is not getting. Yes, the customer does pay for the cost of hiring an employee (the employee's income plus payroll tax) but that's a different issue.

tatupu70 says

No, you didn't. And you're wrong, as usual.. The $40-$50K earner may well have insurance through his employer. In which case he's not paying any tax

LOL. The employer must have an Insurance Fairy as investor. Do you still believe in Santa Claus and Tooth Fairy? Where do you think the employer gets the money to pay for insurance? It's just another form of employment compensation. The whole idea of Obamacare is to get the burden of paying insurance off the backs of employers, and in case you did not notice, most $40-50k jobs don't carry insurance, and more and more companies are dropping insurance for employees. This national mandate under Obamacare will finally justify all employers dropping medical insurance for employees.

Call it Crazy says

The more you post in business, insurance and financial threads, the more you show us just how clueless you are...

lol--you keep saying that, but I've yet to see you ever point to an example...

Reality says

So according to your logic, you never pay sales tax?

Nope--my example said nothing about paying or not paying sales tax. But of course you pay sales tax.

Reality says

The property tax is just like gasoline tax: levied on the asset, but ultimately born by the customer.

No, actually, it's not. The property tax is not a function of the rent. You could be renting a house for $500/mo. that has a property tax bill of $600/mo. In this case, the renter is clearly not paying the property tax.

Reality says

Yes, the customer does pay for the cost of hiring an employee (the employee's income plus payroll tax) but that's a different issue.

No--it's directly analogous to the property tax and rent example you keep bringing up.

Reality says

LOL. The employer must have an Insurance Fairy as investor. Do you still believe in Santa Claus and Tooth Fairy? Where do you think the employer gets the money to pay for insurance? It's just another form of employment compensation. The whole idea of Obamacare is to get the burden of paying insurance off the backs of employers, and in case you did not notice, most $40-50k jobs don't carry insurance, and more and more companies are dropping insurance for employees. This national mandate under Obamacare will finally justify all employers dropping medical insurance for employees.

Seriously--wtf are you talking about. How can you not get it? If the employer provides insurance--the cost is typically shared but it's not a tax. It's a payment for insurance.

Call it Crazy says

There have been numerous examples in this thread alone pointed out by different posters, but at the end of the day, you don't know what you don't know, so all the typing we do won't change that..

OK--should be easy then. Please point one out.

Call it Crazy says

Like this strawman:

tatupu70 says

The property tax is not a function of the rent. You could be renting a house for $500/mo. that has a property tax bill of $600/mo.

Anybody with functioning brain cells and aware of reality knows how ridiculous that statement is... But I'm sure you can give us a list of landlords that rent out their houses for big loses each month, right?

OK--I'll add strawman argument to the list of things you don't know. What I did was a hypothetical. It was obviously an extreme to get the point across.

There have been several folks on here that have admitted to renting their house for a loss each month...

tatupu70 says

It was obviously an extreme to get the point across.

And obvious to anyone who isn't a reflexive defender of wealth concentration here. A built house can either sit empty, be sold on, or be rented.

It has no present-day production cost to bring to market, its construction cost and former sales price(s) are sunk costs that have no bearing on what its worth is today, on either the rental market or MLS.

Bellingham Bill says

In fact, if income taxes were to double tomorrow, rents would fall tremendously (but not dollar for dollar, as that's how bad supply/demand imbalance has gotten in all popular and populous places to live).

How do you figure?

There is the cost of buying the house, if the costs cannot be recouped there will be a shortage of rentals right quick, as the houses will be sold and the money put to a more productive use. As is the case with rent control.

Reality is much smarter than his arguments above and he knows he's being disingenuous.

He knows the median income for a household is around 50k, and for married households making 50k marginal tax bracket is not 25%.

He knows median net compensation for a single wage earner, from SSA, is going to be around 30k, which is also in the 15% nominal tax bracket.

He knows median income and median wages, as reported at around 50k and 30k, are gross figures for tax purposes and with personal exemptions and standard deductions, taxable incomes of each are much lower than this, further making it unlikely anyone of median income or wage would reach the 25% marginal bracket.

He knows that wages are determined by the market, and while total cost of an employee is certainly a determining factor in the amount of demand for labor at a given price, employers portion of payroll is not a direct pass through that should be considered additional compensation. That is, the market determines wage levels, and if payroll taxes went away tomorrow, wages paid directly to employees will not increase 7.65%.

He knows that state income taxes and state property taxes are deductible from federal taxes, so adding 5% state income taxes and 6% state property taxes to a 25% federal rate to come up with 36% total is bad math.

He knows all of these things. But he continues to make a disingenuous argument anyway.

It is acceptable to me for one to make a factually incorrect argument due to ignorance. One can make an argument that I disagree with and is based on a differing opinion. One can make an argument based on a different interpretation of known history or law. Any of these things can be justified. But for one who knows better to purposely distort truths in order to make an argument, this is the worst kind of deceit. Using your intelligence to knowingly deceive is evil and makes you worse than politicians, who at least do it for measurable personal gain. You win nothing of value by deceiving on an internet message board.

Lying is for sociopaths and children. Which are you?

tatupu70 says

So according to your logic, you never pay sales tax?

Nope--my example said nothing about paying or not paying sales tax. But of course you pay sales tax.

You do not cut the check to the government but to the merchant, so according to your earlier writing:

If you write a check or get money withheld in your name that goes to the government, you are paying tax.

If you write a check to someone who then has to pay tax on those earnings-you are NOT paying tax.

You are not paying sales tax. See how absurd your standard is.

tatupu70 says

The property tax is just like gasoline tax: levied on the asset, but ultimately born by the customer.

No, actually, it's not. The property tax is not a function of the rent. You could be renting a house for $500/mo. that has a property tax bill of $600/mo. In this case, the renter is clearly not paying the property tax.

LOL. Goes to show how clueless you are. The gasoline tax is assessed on the gallon: about 50 cents per gallon. Sure, theoretically some idiot like you might sell me gasoline for 40 cents a gallon. How long do you think you would stay in business? Like I said, the collection of property tax is just like gasoline tax: the vendor is forced to be the tax collection agent, and the customer pays a price with all taxes and fees included.

tatupu70 says

Yes, the customer does pay for the cost of hiring an employee (the employee's income plus payroll tax) but that's a different issue.

No--it's directly analogous to the property tax and rent example you keep bringing up.

Analogous but not a tax issue. The customer does ultimately pay for the cost of hiring an employee as well as paying for the taxes included in the price. Glad you finally agree.

tatupu70 says

Seriously--wtf are you talking about. How can you not get it? If the employer provides insurance--the cost is typically shared but it's not a tax. It's a payment for insurance.

LOL. So you still believe in the Insurance Fairy or Boss Fairy. What "shared"? The employer only provides anything for the employee in compensation for the latter's work. The employee ultimately pays for it because the wage is lower than otherwise would be! Do you believe the plantation owner "shares" housing, food, clothing, medicine and education with the slaves out of his own pocket? Not taking them out of the slaves' labor output? Oh yeah, that's why you believe in the Government Fairy that owns the "plantation" and doles out "free" shit.

Control Point knows the difference between Average Income vs. Median Income.

Control Point knows that when the payroll tax was temporarily reduced a few years ago, the workers' take-home pay literally went up by the corresponding amount overnight. So the "if the payroll tax disappeared tomorrow" counter-factual argument was literally proven. Payroll tax portion is what the employers are already paying out of the operation, but intercepted by government therefore not received by workers.

Control Point can do the simple math that all the items in my previous list: 25% + 15% + 7% + 8% + 4% is close to 60%; therefore the "close to 50%" comment already took into account some overlaps and deductions, in fact very generously.

Control Point also knows that people in the 30k-50k income range typically do not itemize deduction when filing, so the state taxes are not deducted from income.

control point says

It is acceptable to me for one to make a factually incorrect argument due to ignorance. One can make an argument that I disagree with and is based on a differing opinion. One can make an argument based on a different interpretation of known history or law. Any of these things can be justified. But for one who knows better to purposely distort truths in order to make an argument, this is the worst kind of deceit. Using your intelligence to knowingly deceive is evil and makes you worse than politicians, who at least do it for measurable personal gain. You win nothing of value by deceiving on an internet message board.

Lying is for sociopaths and children. Which are you?

Look in the mirror and ask yourself those questions, please.

Reality says

You are not paying sales tax. See how absurd your standard is.

Not at all--sales tax is money withheld for you. If I didn't buy the merchandise, no tax is due.

Contrast that with property tax--it's due whether anyone rents the place or not.

Reality says

LOL. Goes to show how clueless you are. The gasoline tax is assessed on the gallon: about 50 cents per gallon. Sure, theoretically some idiot like you might sell me gasoline for 40 cents a gallon. How long do you think you would stay in business? Like I said, the collection of property tax is just like gasoline tax: the vendor is forced to be the agent, and the customer pays a price with all taxes and fees included.

And like I said--you are wrong. Gas tax is due only if the gas is sold. It is a tax that is withheld. Property tax is not due upon rental. As Bill said--it is a sunk cost. Not at all the same thing.Reality says

Analogous but not a tax issue. The customer does ultimately pay for the cost of hiring an employee as well as paying for the taxes included in the price. Glad you finally agree.

The customer pays for the product or service. Whether it be a house rental or a haircut or a new TV. And the price is set by supply and demand--not supplier cost. Unless you're saying we're in the long run where companies are making only economic profits. And if you are saying that, you are even more disingenuous than control point said.Reality says

LOL. So you still believe in the Insurance Fairy or Boss Fairy. What "shared"?

It's pretty simple. The company literally pays for part of the cost and the employee pays part. Is that hard for you to understand?

Bellingham Bill says

Landlords are not selling an actual physical product, what they sell has no embedded labor cost to pass on, other than the property management expense of processing the monthly rent checks, and tenant maintenance requests.

That's like saying the home builders have no labor cost to pass on, other than the cost of putting building material together into livable housing. LOL. No sh*t shylock, the home builder would charge whatever the market can bear, but "whatever the market can bear" is very dependent on the cost of labor and cost of capital, just like any other business, because there are competitions!

What LLs sell by the month is the ephemeral right of legal tenancy in a dwelling and its land itself, and the price is always set by the market at what the renter is willing and able to pay.

What the LLs sell by the month is the right to use dwelling or commercial space while excluding others from occupying the same space. Most people do not wish to have other people being too close to their own living space. The market place provides a mechanism for giving limited space to those who can put the space to most efficient use; efficiency as defined by what value the renter can make of the limited space resource and deliver to the enjoyment by humanity as expressed by willing purchases and income to pay for rent. The process is little different from running a restaurant or any other business that needs a physical location. All the landlords and business owners provide the city/town a steady tax stream in order to enable services from the city/town, while adding their own service on top of it. Customers and tenants get too choose which vendor to buy from, the ultimate form of Consumer Sovereignty.

Tax or no tax. In fact, if income taxes were to double tomorrow, rents would fall tremendously (but not dollar for dollar, as that's how bad supply/demand imbalance has gotten in all popular and populous places to live).

As would happen to the revenues of restaurants, dry cleaners, etc.. Raising taxes is deflationary. We already know that. What's your point?

tatupu70 says

Not at all--sales tax is money withheld for you. If I didn't buy the merchandise, no tax is due.

Contrast that with property tax--it's due whether anyone rents the place or not.

There are plenty tax foreclosed properties in Detroit proving the pointlessness of the point that you are trying to make. If rental income does not cover property tax, the landlords would simply walk away. That's how high property taxes kill neighborhoods.

tatupu70 says

And like I said--you are wrong. Gas tax is due only if the gas is sold. It is a tax that is withheld. Property tax is not due upon rental. As Bill said--it is a sunk cost. Not at all the same thing

No, it is not a sunk cost. It is a business decision re-visited every quarter: whether it is worthwhile to run a business between the cost of property tax + maintenance + insurance vs. revenue of rent. When the net is negative and can not be expected to turn around, the business ceases to make business sense.

tatupu70 says

The customer pays for the product or service. Whether it be a house rental or a haircut or a new TV. And the price is set by supply and demand--not supplier cost. Unless you're saying we're in the long run where companies are making only economic profits. And if you are saying that, you are even more disingenuous than control point said

Of course price is set by supply vs. demand. However, the cost that everyone else has to face too at the same time has direct impact on the volume and pricing of competition.

tatupu70 says

It's pretty simple. The company literally pays for part of the cost and the employee pays part. Is that hard for you to understand?

The company can choose to go out business if it can not cover "its part" out of the productivity of the employee. There is no Company Fairy either.

Reality says

Control Point knows that when the payroll tax was temporarily reduced a few years ago, the workers' take-home pay literally went up by the corresponding amount overnight.

Haha. So I made an argument with a basic premise "I know Reality is not stupid, so he must be a liar." You respond with, "No I'm not a liar, I'm really just stupid."

Obviously we are talking about the employer paid portion of payroll taxes, and whether or that is a tax paid by the employee or not. Your counter "when payroll taxes were reduced" - this is referring to the FICA reduction under Tax Relief Act of 2010, where the total FICA tax (both employee and employer rate) was reduced from 12.4% to 10.4%. This was reflected on an workers paycheck, LITERALLY, because the EMPLOYEE rate was reduced from 6.2% to 4.2%. The employer rate was unchanged. The change in the workers take home check was a direct result of a change in a direct tax to the worker.

Reality says

Control Point can do the simple math that all the items in my previous list: 25% + 15% + 7% + 8% + 4% is close to 60%; therefore the "close to 50%" comment already took into account some overlaps and deductions, in fact very generously.

I can do simple math, and by easily challenging 2 of your disingenuous assumptions, show how silly you are being. Even using average wages ($43k) for a single worker less the standard deduction and one personal exemption (and no other reductions to taxable income) puts 43k worker in the 15% bracket. Even in California, the highest tax state, with exemption and credit, this workers marginal tax bracket is 6%.

These two factual challenges ALONE make your premise incorrect. You cannot get to 50% when the combined state and federal income tax burden is only 21% - Even if you can make the argument he "pays" property taxes when he rents and even if he is self employed. You already knew this - which is why I am calling you out on lying.

Your are either stupid or a liar - I gave you credit for at least being competent. Thanks for countering with your "no I'm just stupid" response.

control point says

This was reflected on an workers paycheck, LITERALLY, because the EMPLOYEE rate was reduced from 6.2% to 4.2%. The employer rate was unchanged. The change in the workers take home check was a direct result of a change in a direct tax to the worker.

Whether the 2% was taken from the employee or "employer's contribution" would have made no difference. Both are cost of employment to the employer. The reduction was clearly passed onto the worker.

I said $40-50k, not necessarily exactly at $43k. Income is a spectrum. It's ridiculous to think all the middle income people make exactly $43k. Even taking your 21% as starting point for a Californian, we add:

15.3% payroll tax (both sides, or self-employed)
2% of 5x income in California as property tax, i.e. 10%
7.5%-10% sales tax on non-food, non-housing, non-medical, non-educational expense, say 9% of 30% of income, or 2.7%
Obamacare "insurance" premium $2500 a year (even assuming ridiculously cheap plan at only $200 a month; most plans are $350+ !), 5.8%
Gasoline tax on about 800-1000 gallons of gas, 1% of income

The tally is already standing at 55.8%! So my earlier statement of "close to 50%" was being very conservative and generous.

You cannot get to 50% when the combined state and federal income tax burden is only 21%

Your are either stupid or a liar - I gave you credit for at least being competent. Thanks for countering with your "no I'm just stupid" response.

I said "close to 50%" in my earlier post. Since we are now reaching 55.8% even with your low 21% starting point, you are proving yourself a liar and stupid and incompetent. Resorting to pointless personal attacks is not helping your case.

The point that is being made on this thread is that Americans have been turned into slaves to the government.

You mutts falsely believe that democracy is God. Democracy does not work. All government is going to have the incentive to grow, think self preservation. A cancer is fatal to the organism, but it is good for the cancer cells as they take over the body, right up to the point of death.

You mutts want to view this subject from an I'm the only one, or a cancer cells view point, the body/nation is diseased. You only want to know what is in it for me, this narcissistic view is irrational, as it only focuses on what is in it for me.

And the truth is less and less, not to mention what it does to your integrity.

"Democracy does not work."

vs.

“Democracy is the worst form of government except for all those others that have been tried from time to time.”

Democracy can only be as intelligent as its electorate, but its signal virtue is its negative feedback of its majoritarian dynamic being able to push back against abuses of any minority vs the majority.

In the economic sphere, democracy eventually freed our English ancestors after they had been enslaved by their Norman conquerors.

We're getting to a tipping point here in the US, but our democracy is hobbled by the 25% of the active electorate that puts their social conservatism ahead of any economic issues.

the austrian here is forgetting that slaves didn't get to pocket the full value of their labor.

hey, I wonder how our current system compares to that system.

having said that, it is true that government is leviathan:

real monthly per-capita cost of government

that is a big footprint on the necks of working americans, even though so many Americans are dependent on this spending.

Bellingham Bill says

that is a big footprint on the necks of working americans, even though so many Americans are dependent on this spending.

No they are not.

Bellingham Bill says

Democracy can only be as intelligent as its electorate, but its signal virtue is its positive feedback of its majoritarian dynamic being able to push back against abuses of any minority vs the majority.

Democracy, Oligarchy and Monarchy each has its own degenerate form. Historically, Democracy was born from the Ancient Greek farmer-infantry Hoplite domination of the battle field, and died when Roman infantry was systematically defeated by cavalry from German frontier. Then reborn again 1000+ years later when the musket enabled the draft infantry defeat the knight's armor.

There is nothing mysterious about any -cracy. All -cracy is about controlling people by force, therefore susceptible to severe corruption and abuse. What really makes people content is liberty; i.e. that small space left untouched by whatever-cracy.

In the economic sphere, democracy eventually freed our English ancestors after they had been enslaved by their Norman conquerors.

The Norman conquerors never enslaved anyone. The tax rate on English serfs was always much lower than tax rates we have today. The "divine right" of the English/Norman kings were first limited by Barons imposing Mangna Carta; then those baronial rights were gradually expanded to adult male population meeting property ownership requirements. Democracy in Anglo-America came long after the king was either only titular or non-existent.

We're getting to a tipping point here in the US, but our democracy is hobbled by the 25% of the active electorate that puts their social conservatism ahead of any economic issues.

The ratio was much lower as percentage of the overall population in the fastest economic growth period of the Anglo-American history. Not saying anyone should be denied sufferage, but a system of allowing donations in exchange for additional votes would go a long way towards responsible citizenship: say, one person one vote, and every $10,000 donation to the government buys another vote. All taxes and the FED can be abolished as a result.

Reality says

Since we are now reaching 55.8% even with your low 21% starting point, you are proving yourself a liar and stupid and incompetent. Resorting to pointless personal attacks is not helping your case.

CP: This is funny, we can go on acting like you haven't resorted to this type of belittlement with myself (and others) in the past if you'd like, but you and I know full well you dish out as least as much as your are getting, so quit crying.

CP: Anyway, to show everyone else how disingenous (or foolish) you are being - I will refute every single one of your points.

Reality says

I said $40-50k, not necessarily exactly at $43k. Income is a spectrum. It's ridiculous to think all the middle income people make exactly $43k.

CP: I went to average income because this is where you wanted to take the argument, and I knew my points would still hold even at $43k. Now we are talking about "middle income people" - a middle income person clearly implies median income - which as I said is $30k (actually $28k). Which is it? A person with an income of $43k is above the "middle" of the middle, therefore he is on the upper end of the middle. Want to talk about someone on the lower end of the middle? Lets look slightly under $28k...

Reality says

Whether the 2% was taken from the employee or "employer's contribution" would have made no difference. Both are cost of employment to the employer. The reduction was clearly passed onto the worker

CP: Because it was a reduction of a direct tax on the worker. The example means nothing vis a vis whether or not the employer portion of FICA would be passed onto the worker if eliminated. It certainly would not be, as wages RECEIVED by the worker are driven by the market. The tax is a deadweight loss (a term, again, I know you are familiar with) - without it there would be some recovery by both the employer and employee - but certainly ALL of it would not pass to the employee. UNtil we reach effect unemployment rate of zero, most if not all of the deadweight loss would go to the emplyer as additional profit.

Reality says

15.3% payroll tax (both sides, or self-employed)

CP: See above, 7.65% FICA tax.

Reality says

2% of 5x income in California as property tax, i.e. 10%

CP: This one isn't even really worth arguing - Bill has pretty much blown it to bits above, but I'll address it in a slightly different way...Lets say you are correct with 2% of a house that is valued at 5x income. That means at 43k income, we are looking at a house valued at $215k. Mortgage amount with 20% down is $172k. P&I on a 30 year loan at 3.5% is $772. Add in the $4300 annual taxes, and $1000 insurance, and we are looking at break even cash flow (tax credit for LL excluded) of about $1215. Lets just assume the landlord is happy to earn cash flow profit only equal to his tax write off. So the tenant in renting for $1215 monthly, ($14,580 annually)....more to come.

Reality says

7.5%-10% sales tax on non-food, non-housing, non-medical, non-educational expense, say 9% of 30% of income, or 2.7%

CP: So 30% of income on non-food, non-housing, non-medical, non-educational expenses. Ok, using our $43k example, we are talking 13k total less 9% sales tax = 11.8% . Taxes, as you are trying to argue, take at least 50% of $43k. That leaves $21.5k after taxes. Minus $11.8k for this category, $9.7k...minus $10.2k for housing above less taxes...uh oh...That is negative 500 bucks...without food, medical expenses($2500 below), gasoline($1700 below), (that one is below) educational expenses, car insurance, utilities....etc. Now I know we are talking marginal tax rates for both federal and state income taxes, and if you would like to switch this argument to one in which we start taking average income tax rates, lets do it. Not going to get to 50% though and you know that.

Reality says

Obamacare "insurance" premium $2500 a year (even assuming ridiculously cheap plan at only $200 a month; most plans are $350+ !), 5.8%

CP: Well, what the Supreme Court said is the individual Mandate is constitutional because it is a tax. That is correct. The tax, however, is not the insurance premiums. By paying insurance premiums in a qualified plans, you are given a credit for the exact amount for the tax. For this single fellow in California with $43k income, the tax payment would be $655. Also known as the penalty tax. $655 is 1.5% of income. Health insurance premiums are paid to private companies who provide a private service, which could never be considered a tax

Reality says

Gasoline tax on about 800-1000 gallons of gas, 1% of income

CP: Notwithstanding the fact that given he doesn't have the money to buy gasoline as shown above, California has the 3rd highest gasoline tax rate in the country at 63.8 cents per gallon. The average driver drives 13,500 miles per year, and the average fuel economy for a 10 year old passenger car according to DOT table 4-23 is 30 MPG. So that means average driver driving average 10 year old car is buying about 450 gallons of gasoline per year. That is $287 per year in gasoline taxes, or .6% of income.

So, we have $15% marginal plus 6% state plus 7.65% FICA plus 1.5% obamacare plus .6% gasoline = 30.75%.

Lets go back and examine further the sales tax and property tax arguments. Operating under the assumption that every after tax penny earned is probably spent at this income level, lets start with housing costs. Even though I vehemently disagree that a renter pays property taxes - moving the property tax portion of rent to 2% of a 3x income rental value, (6% total) would make a $129k rental value, 80% LTV 30 year 3.5% is $465, taxes $2580 annually(6%), insurance $700 = $740 monthly\$8880 annually for housing.

Now going back to our $43000 income, less 30.75% taxes is $29,778 after taxes. Less $8880 for housing & $1125 for gasoline (450 gallons at $2.50 per gallon) leaves $19,773. Let me grant you back your employer payroll tax even though it is silly, another $3290 off, leaves $16,483. Roughly 38% of income. And lets go with 9% sales tax on consumption of that entire 38% of income, even though a significant portion of it would be at a lower sales tax rate for food, car insurance, etc. we have less than 3.5% of income.

So even using your ridiculous double payroll tax AND silly property tax as renter arguments, we have 15% federal plus 15.3% payroll plus 6% state plus 1.5% obamacare plus .6% gasoline plus 6% property plus 3.5% sales = 47.9% of income going to taxes.

Still less than 50% of income, taking WORST case assumptions and accepting all of your ludicrous arguments for who actually pays property/employer payroll taxes.

I'm pretty surprised you decided to double down on stupid, but it is what it is. Maybe someone has hacked your account, but I'd think someone with a 141+ IQ wouldn't allow himself to make such a monumental math error by linearly adding tax burden on purchases, transportation, and housing that exceeded total after tax income by over 10%.

Even though I dont need to prove the point about including employer FICA and property taxes in this argument because you STILL cant get to 50% marginal tax burden for an "average" worker:

Really quick, who must pay the back taxes in each of the following scenarios:
1.) Your employer does not withhold nor pay your federal income taxes.
2.) Your employer does not pay the employer portion of FICA.
3.) Your landlord does not pay the property taxes on your apartment.

control point says

Reality says

I said $40-50k, not necessarily exactly at $43k. Income is a spectrum. It's ridiculous to think all the middle income people make exactly $43k.

CP: I went to average income because this is where you wanted to take the argument, and I knew my points would still hold even at $43k. Now we are talking about "middle income people" - a middle income person clearly implies median income - which as I said is $30k (actually $28k). Which is it? A person with an income of $43k is above the "middle" of the middle, therefore he is on the upper end of the middle. Want to talk about someone on the lower end of the middle? Lets look slightly under $28k...

In my original post, I said "average income $40-50k." In case it is not obvious to you, we have been in a "recovery" of sorts in the past few years, you can't apply some 2011 income number to 2014 tax brackets or even assume 2015 income will be the same as 2011 income. No, not interested in talking about low income individuals or welfare queens who are net tax recipients; my original post was talking about "average income $40-50k" If you want to change topic in order to insult me, you will have to find someone else for your entertainment.

control point says

Because it was a reduction of a direct tax on the worker. The example means nothing vis a vis whether or not the employer portion of FICA would be passed onto the worker if eliminated. It certainly would not be, as wages RECEIVED by the worker are driven by the market. The tax is a deadweight loss (a term, again, I know you are familiar with) - without it there would be some recovery by both the employer and employee - but certainly ALL of it would not pass to the employee. UNtil we reach effect unemployment rate of zero, most if not all of the deadweight loss would go to the emplyer as additional profit.

Yet, that is exactly equivalent to how normal tax rates are described . Saying the tax rate is 25% does not mean the worker would get 33% after-tax income increase if the tax were removed. Instead, it means 25% of what the employers pays out for hiring is intercepted by the tax collection and not received by the employee. How that "dead loss" would be divided between the two parties is never part of the description of tax rate; why should it now? Do you argue that a 25% income tax is really 12.5% because the employer would otherwise pocket half of it? What kind of silly logic is that?