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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.
The average person will go into debt to keep his car gassed up so he can go to work and buy food. 30mpg is perhaps high way rating when the car is new and fully warmed up. The actual consumption due to cold engine and being stuck in traffick is probably closer to 20mpg. The wealthier living close to SFBA probably drive less, whereas the person making only $40-50k can find $200k-$250k homes only in areas farther away from the city, therefore would have to drive more than average.
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.
In my original post, I said "close to 50%." I'm sure you are surprised to arrive at 47.9%. Frankly, I'm surprised myself to see 47.9% even with your ridiculously low 15% federal marginal rate as starting point, illegally low rate for Obamacare penalty (2% this year, and 2.5% next year, not 1.5%), unrealistically low gasoline tax and property tax. For anyone in the $40-50k that gets the 25% federal marginal rate, the overall marginal is well over 50%! That's actually higher than I even thought originally when I wrote "close to 50%"
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%.
The personal insult is quite unnecessary. You are arriving at net cash flow negativity by conflating marginal tax rate and overall tax rate. In any case, many (if not most) households in the $40-50k range have been spending more than their income since 2008. The overall savings rate in the US has gone negative, and the $100k+ households are probably the ones far more likely to be still having positive savings. Consumer debt bankruptcy rates have been high as well. The average $40-50k household may well have to tag on additional tax for debt forgiven as income!
Let's not forget, this is Patnet, where we used to decry people using home equity loans to buy cars and boats; now they are just using home equity loans to pay kids' schools, grocery and utility bills. People spending more than their income should not be a surprise.
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.
4.) Your vendor fails to pay sales tax or gasoline tax . . . Are you going to then tell us that you do not pay sales tax or gasoline tax?
See, the distinction you are seeking is meaningless.
tatupu70
2015 Feb 8, 12:30pm
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.
No, they are actually proving my point. Landlords sell because THEY are responsible for the tax, not renters.Reality says
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.
OK good--you agree it's a business cost then and NOT a tax on the customer?
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.
wtf are you talking about--try to stay on subject. The fact that you cannot refute any of my arguments but must change the subject to companies going out of business indicates you are giving up, huh?
tatupu70
2015 Feb 8, 12:33pm
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%.
And even more--the original post was taxes paid, not marginal tax rates. Certainly reality knows that taxes paid are much less than marginal rate, even if his buddy indigenous doesn't.
tatupu70
2015 Feb 8, 12:35pm
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.
bwahahahahahaha. You're kidding, right? You think companies would have raised employee's checks out of the goodness of their hearts when their portion of the payroll tax was reduced? Talk about believing in the employer fairy. Have rising corporate profits taught you nothing?
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%.
And even more--the original post was taxes paid, not marginal tax rates. Certainly reality knows that taxes paid are much less than marginal rate, even if his buddy indigenous doesn't.
Marginal Tax Rate is what influences individual's decision to whether work more to earn more vs. leisure, which is not taxed.
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.
bwahahahahahaha. You're kidding, right? You think companies would have raised employee's checks out of the goodness of their hearts when their portion of the payroll tax was reduced? Talk about believing in the employer fairy. Have rising corporate profits taught you nothing?
That 2% was indeed passed onto the workers. In any case, how much of a tax cut would pass onto the workers has no relevance on describing what a tax rate is. A 25% income tax is a 25% income tax, even if abolishing it would only give the employee and the employer each 12.5%.
indigenous
2015 Feb 8, 1:30pm
Another factor is that employers compete for employees which means they are going to pay as much as they can and still stay competitive.
Unless of course it is a government agency in which case they only hire the unemployable.
The reason the board of directors, politics aside, pay mega bucks to CEOs is competition for someone who is a rainmaker or perceived as a rainmaker.
tatupu70
2015 Feb 8, 1:52pm
Marginal Tax Rate is what influences individual's decision to whether work more to earn more vs. leisure, which is not taxed.
Thanks--care to share any other completely irrelevant statements?
The original statement was % of taxes PAID--not marginal tax rate. You can distort, distract, and lie all you want, but you can't change the original statement.
tatupu70
2015 Feb 8, 1:53pm
That 2% was indeed passed onto the workers. In any case, how much of a tax cut would pass onto the workers has no relevance on describing what a tax rate is. A 25% income tax is a 25% income tax, even if abolishing it would only give the employee and the employer each 12.5%.
It wasn't passed on to anyone. It wasn't taken out of the employee portion of the FICA tax.
tatupu70
2015 Feb 8, 1:54pm
Another factor is that employers compete for employees which means they are going to pay as much as they can and still stay competitive.
lol--you're kidding, right? You can't literally be this dense.
Employers pay the LEAST possible. Period.
Marginal Tax Rate is what influences individual's decision to whether work more to earn more vs. leisure, which is not taxed.
Thanks--care to share any other completely irrelevant statements?
The original statement was % of taxes PAID--not marginal tax rate. You can distort, distract, and lie all you want, but you can't change the original statement.
% of tax PAID for each additional piece of work. That's how people decide whether to work more or not.
That 2% was indeed passed onto the workers. In any case, how much of a tax cut would pass onto the workers has no relevance on describing what a tax rate is. A 25% income tax is a 25% income tax, even if abolishing it would only give the employee and the employer each 12.5%.
It wasn't passed on to anyone. It wasn't taken out of the employee portion of the FICA tax.
And what's left after the (reduced) tax was passed to the employee's paycheck.
In any case, it doesn't even matter, because tax rate by definition is the rate of what employer pays and what employee doesn't get.
Another factor is that employers compete for employees which means they are going to pay as much as they can and still stay competitive.
lol--you're kidding, right? You can't literally be this dense.
Employers pay the LEAST possible. Period.
Only if there is no competing employer. Perhaps in your case, there are no employer competing to hire you. That's why you are unemployed and paid nothing, which is indeed the LEAST possible. Period.
indigenous
2015 Feb 8, 2:37pm
"Employers pay the LEAST possible. Period."
Tru Dat, it would be much cheaper to hire workers in Ethiopia to program this forum right?
Well no it wouldn't, Ethiopians don't know how to program.
The ratonal way to look at it is what is the unit cost for the product.
tatupu70
2015 Feb 8, 3:34pm
Tru Dat, it would be much cheaper to hire workers in Ethiopia to program this forum right?
Well no it wouldn't, Ethiopians don't know how to program.
The ratonal way to look at it is what is the unit cost for the product.
Since Ethiopians couldn't program this forum, it's not possible to pay them to do it. So, like I said--they pay the least POSSIBLE.
tatupu70
2015 Feb 8, 3:36pm
% of tax PAID for each additional piece of work. That's how people decide whether to work more or not.
Great--why don't you start a new thread to talk about how marginal tax rates affect the economy and people's purchasing decisions. The question being discussed here is what % of the average person's income gets paid in taxes. Not marginal. Actual.
tatupu70
2015 Feb 8, 3:37pm
And what's left after the (reduced) tax was passed to the employee's paycheck.
In any case, it doesn't even matter, because tax rate by definition is the rate of what employer pays and what employee doesn't get.
Whose definition is that?
tatupu70
2015 Feb 8, 3:38pm
Only if there is no competing employer. Perhaps in your case, there are no employer competing to hire you. That's why you are unemployed and paid nothing, which is indeed the LEAST possible. Period
Wrong again--no matter how many employers there are, they will each pay the least amount possible.
The 2015 penalty is 2%, rising to 2.5% in 2016.
Tripling down I see. Nice Mr. 141+. Just to illustrate how you are wrong again I'll address this one, and one other.
The 2015 penalty is 2%, you are correct. However when you are going to challenge a factual point with me, you'd better be sure. You didn't dig deep enough into it to understand that it is 2% of income above the minimum tax filing threshold. Which happens to be $10,300 in 2015. 43000-10300 = 32700. 2% of that is $654, just like I said. That also happens to be 1.5% of $43k income, just as I said.
Consumer debt bankruptcy rates have been high as well. The average $40-50k household may well have to tag on additional tax for debt forgiven as income!
Sure, any debt forgiven, or personal gift, etc. that you mentioned are exactly that, INCOME. Which would increase the denominator, lowering the percentage of the (now higher) income paid in taxes. Seems you left that part out.
This is a waste of my time, you are so far over your head yet you dont even know it. I feel bad for you, I really do. You're wrong, you know it, and your ego won't let you admit it. Now you can sit around here all you want and act like you know something, but at least now I know beyond a shadow of a doubt you don't. Too bad I thought you were better than the others around here.
And what's left after the (reduced) tax was passed to the employee's paycheck.
In any case, it doesn't even matter, because tax rate by definition is the rate of what employer pays and what employee doesn't get.
Whose definition is that?
What is a 25% income tax? 25% of the money that the employer pays but the employee doesn't get as after-tax income. If that 25% tax is suspended, it's entirely possible that the employer and employee split 12.5% each. However, despite that hypothetical outcome, the tax rate is still called 25%, not 12.5%. Capisch?
Only if there is no competing employer. Perhaps in your case, there are no employer competing to hire you. That's why you are unemployed and paid nothing, which is indeed the LEAST possible. Period
Wrong again--no matter how many employers there are, they will each pay the least amount possible.
LOL. Least possible compared to what? Is a $5mil / year CEO position (also employee) the least possible? BTW, glad to know you are an unemployed wanker.
Sure, any debt forgiven, or personal gift, etc. that you mentioned are exactly that, INCOME. Which would increase the denominator, lowering the percentage of the (now higher) income paid in taxes. Seems you left that part out.
You are wrong. A person can not declare bankruptcy every year. The year in which a person declares bankruptcy and has his/her debt discharged, chances are that he/she would have a much higher "income" than his/her usual years due to the debt forgiveness. That kicks him/her into the higher tax bracket at 25%, at which point both you and I know 50% total marginal tax rate is easily achieved. For all the other years, the debts are accumulating as the person spends more money than he/she earns, therefore also incurs higher tax rate due to spending.
This is a waste of my time, you are so far over your head yet you dont even know it. I feel bad for you, I really do. You're wrong, you know it, and your ego won't let you admit it. Now you can sit around here all you want and act like you know something, but at least now I know beyond a shadow of a doubt you don't. Too bad I thought you were better than the others around here.
You are indeed wasting your time with your pointless personal attacks. Your limited number of brain cells would be more fruitfully employed if you let them work out the details like illustrated in my previous paragraph.
tatupu70
2015 Feb 8, 4:45pm
What is a 25% income tax? 25% of the money that the employer pays but the employee doesn't get as after-tax income. If that 25% tax is suspended, it's entirely possible that the employer and employee split 12.5% each. However, despite that hypothetical outcome, the tax rate is still called 25%, not 12.5%. Capisch?
Nope. We've been over this enough times that you clearly are trolling at this point. I give up.
tatupu70
2015 Feb 8, 4:47pm
LOL. Least possible compared to what? Is a $5mil / year CEO position (also employee) the least possible? BTW, glad to know you are an unemployed wanker.
Obviously in the board's eyes, yes.
Glad to know you've resorted to name calling. Guess you realize you're having your lunch handed to you...
What is a 25% income tax? 25% of the money that the employer pays but the employee doesn't get as after-tax income. If that 25% tax is suspended, it's entirely possible that the employer and employee split 12.5% each. However, despite that hypothetical outcome, the tax rate is still called 25%, not 12.5%. Capisch?
Nope. We've been over this enough times that you clearly are trolling at this point. I give up.
Better late than never. A 25% income tax is a 25% income tax even if a suspension would see both parties taking half; you never refuted that, so stop lying is a good move.
LOL. Least possible compared to what? Is a $5mil / year CEO position (also employee) the least possible? BTW, glad to know you are an unemployed wanker.
Obviously in the board's eyes, yes.
Only to the idiots who have no clue.
Glad to know you've resorted to name calling. Guess you realize you're having your lunch handed to you...
Not name calling, but you are apparently an employable person trolling the internet; aka. a basement dwelling wanker.
tatupu70
2015 Feb 8, 4:53pm
Better late than never. A 25% income tax is a 25% income tax even if a suspension would see both parties taking half; you never refuted that, so stop lying is a good move
So, I'm assuming when I get my W2, this is on there right?
Better late than never. A 25% income tax is a 25% income tax even if a suspension would see both parties taking half; you never refuted that, so stop lying is a good move
So, I'm assuming when I get my W2, this is on there right?
What's technically on W-2 is not nearly as important as the actual cost that the employer has to incur in order to hire you. For example, if the employer is required to pay your medical insurance, housing and retirement on top of wages, you are much less likely to be hired even if those other items do not show up on your W-2. OTOH, if you are long-term unemployed, if the government gives cash incentives to the employer to hire you, you are far more likely to be hired even if the incentive doesn't show up on the W-2.
tatupu70
2015 Feb 8, 5:22pm
What's technically on W-2 is not nearly as important as the actual cost that the employer has to incur in order to hire you. For example, if the employer is required to pay your medical insurance, housing and retirement on top of wages, you are much less likely to be hired even if those other items do not show up on your W-2. OTOH, if you are long-term unemployed, if the government gives cash incentives to the employer to hire you, you are far more likely to be hired even if the incentive doesn't show up on the W-2.
Should I take that as a "no" then?
tatupu70
2015 Feb 8, 5:43pm
Goes to show W-2 does not reflect the full cost of hiring you.
Obviously. It shows you the taxes that you have paid--not the full cost of hiring you.
Do you think the commission paid to a headhunter should go on the new employee's W-2?
Commission paid to the headhunter is also operational expense, but it is not tax taken by the government as result of hiring you.
If the government collects a "hiring fee," then yes that would be tax collected by the government as a result of hiring you. Comes to think of it, payment towards mandatory unemployment benefit insurance is just like that.
tatupu70
2015 Feb 8, 6:12pm
If the government collects a "hiring fee," then yes that would be tax collected by the government as a result of hiring you. Comes to think of it, payment towards mandatory unemployment benefit insurance is just like that.
Yep, businesses pay taxes too.
LOL. Who do you think really pays for the mandatory unemployment insurance? hint: hiring anyone is optional.
tatupu70
2015 Feb 8, 6:42pm
LOL. Who do you think really pays for the mandatory unemployment insurance? hint: hiring anyone is optional.
LOL is right. I think the company really pays for it. The money (typically) comes from a bank account controlled by the company. This money could be dervied from retained earnings, from investors, from revenues, etc. Regardless of where it came from, however, it is paid by the company.
LOL. Who do you think really pays for the mandatory unemployment insurance? hint: hiring anyone is optional.
LOL is right. I think the company really pays for it. The money (typically) comes from a bank account controlled by the company. This money could be dervied from retained earnings, from investors, from revenues, etc. Regardless of where it came from, however, it is paid by the company.
Goes to show your utter lack of basic financial sense of the real world. It's like saying the government pays for welfare instead of taxpayers paying for it; slave owners pay for the food of the slaves instead of slaves paying for their own food with their labor. Perhaps it is a necessary lie for a welfare bum like you.
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I’ve seen some pretty crazy things from the Facebook page “U.S. Uncut,” but recently I saw their reprint of some “facts” from Thom Hartmann that had more than 60,000 shares. This particular billboard was so absurd that I felt compelled to share it and set the record straight. Here’s the image:
Thom Hartmann
There are many things one could say about the above. (Here’s someone else’s takedown.) Let me focus on just some of the more obvious, and in the following I’m going to be lazy and talk as if presidents changed tax rates directly, even though of course they signed legislation that Congress sent them:
==> Hartmann’s narrative implies that the worst boom-bust cycles should have occurred before 1913, since in those dark days the federal income tax was zero (except for wartime). But of course the Great Depression and the Great Recession have both happened with positive federal income tax rates, so even on Hartmann’s own terms, the two worst economic periods in U.S. history are hard to square with his theory-free historical narrative.
==> Hartmann’s narrative completely ignores the role of credit creation and artificially low interest rates in spawning an unsustainable boom, which is inevitably followed by a bust. Rothbard wrote the definitive book on applying Austrian business cycle theory to the Great Depression, and here’s an article I wrote doing the same with the 2008 crisis.
==> Hartmann says Warren Harding cut taxes down to 25% in 1922. No, Harding and then Coolidge cut rates gradually, not reaching a 25% rate until 1925. (For all of my claims on the actual history of the top US federal tax rate, refer to this document.)
==> Hartmann blames the 1929 crash on the boom fueled by the Harding[/Coolidge] tax cuts earlier that decade. OK, then why wasn’t the Clinton boom in the 1990s responsible for the dot-com crash in 2000?
==> Hartmann says Roosevelt “fixed” the foolishly low tax rate of 25% that Coolidge enacted. But for some reason Hartmann ignores the fact that Herbert Hoover raised the tax rate to 63% in 1932, which coincidentally (?) led to the worst single year of the Depression. I’m sure Hartmann ignored that part of the history in the interest of brevity.
==> Hartmann is right that FDR did raise rates, up to 79% in 1936, 81% in 1941, 88% in 1942, and 94% (!) by 1944. So look again at Hartmann’s narrative. After talking about how the 25% tax rate of Harding [sic] caused the Great Depression, Hartmann says that FDR jacked rates up to more than 90 percent and the economy boomed. The innocent reader might have thought that FDR did this right away, and the economy was immediately restored to vigor. Yet even using conventional accounts of “wartime prosperity,” the Great Depression lasted at least until 1940. So FDR’s great policy of jacking up tax rates (e.g. to 79% in 1936) still yielded an awful economy for at least four years. One almost gets the sense that massive tax hikes aren’t the way to fix a depression, ya know?
==> Hartmann totally ignores the tax cuts spearheaded by Kennedy (and carried through by Johnson after JFK was shot). Kennedy’s argument for his cuts sounded very much like supply-side Reaganomics, too. I guess Hartmann left that part of history out because his keyboard broke.
==> Speaking of which, Hartmann blames the early 1980s recession on Reagan dropping the top tax rate down to 28%. But again, if you refer to the pesky historical record, you’ll see that the tax rate under Reagan was cut only gradually, not reaching 28% until 1988. A Chicago School economist on steroids might argue that investors in 1980 looked ahead eight years, rationally expected the coming 28% tax rate, deferred investment accordingly, and caused a bad recession…but I don’t think that’s what Hartmann was getting at.
==> One last observation: Hartmann says the economy boomed because of the 39 percent tax rate under Clinton’s wise reaganstewardship. Under Reagan, the top tax rate was 70% in 1981, 50% from 1982 through 1986, then it dropped to 38.5% in 1987, and it was not cut to 28% until 1988. Isn’t it weird that Reagan’s nutty, low low rate of 50% in the first half of the 1980s caused the worst economy since the Great Depression, but Clinton’s soak-the-rich rate of 39% led to a booming economy?
In summary, one really has to wonder at a movement that is so unconcerned with the actual facts that it can proudly trumpet such nonsense. The power of envy and the lust for State power is truly impressive.