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First, your tax ignores payroll tax, and IRA contributions are pre-income-tax but post-payroll-tax. Just FYI. So taxes take a bigger bite than you’re portraying

First, your tax ignores payroll tax, and IRA contributions are pre-income-tax but post-payroll-tax. Just FYI. So taxes take a bigger bite than you’re portraying. Second, where did you come up with this rationale that you’re poor unless X, Y, and Z? It seems just as arbitrary to say that you’re not poor if you can put $2000 into an IRA, have a three month emergency fund, and take a week vacation. Or let’s go the other way, why not: if you can’t put $30k per year into savings, have a three year emergency fund, and take eight weeks off per year, you’re not middle class, you’re poor. See, we can all pull random numbers and standards out our ass! In actuality, “poor” and “middle class” are actual defined terms with relatively well-defined meanings, none of which have anything to do with your bizarre markers of what constitutes different steps on the socioeconomic ladder.

thaumaturgy 9y ago
IRA contributions for most people are above-the-line 1040 deductions, i.e., they count as a direct adjustment to your income regardless of how the rest of your taxes are structured (with exceptions for people who have employer IRA plans available or are self-employed or half a dozen other conditions, I am not a tax adviser, etc. etc.). Okay, show me a non-arbitrary definition of "poor" and "middle class". Bonus points: show me the official definition that everyone agrees on. I'll wait. Oh, and while you're doing that, let's also pause for a moment and reflect on whether you disagree that someone that can't save $10k per year is poor, or if you were just looking for an argument on the internet.
- taurath 9y ago
  You’re the one creating your own definitions and making assertions, accusing someone else of just looking for an argument seems disingenuous.
- ryanwaggoner 9y ago
  IRA contributions are subject to FICA taxes, as are employee contributions to 401k, etc. FICA taxes withheld from your paycheck regardless of your contributions, and there’s no credit to give some of it back to you on the 1040 because you made an IRA contribution. As for definitions, here’s an official, non-arbitrary one for poverty that’s widely used. I’m sure you’ll just declare it arbitrary, which is fine, but my point is that you just came up with a random definition without anything to back it up or any reasoning as to why that’s the right threshold. Federal poverty guidelines aren’t perfect but they’re not a number out of a hat, which is what you’ve got. https://aspe.hhs.gov/poverty-guidelines https://aspe.hhs.gov/poverty-guidelines

thaumaturgy 9y ago

IRA contributions for most people are above-the-line 1040 deductions, i.e., they count as a direct adjustment to your income regardless of how the rest of your taxes are structured (with exceptions for people who have employer IRA plans available or are self-employed or half a dozen other conditions, I am not a tax adviser, etc. etc.). Okay, show me a non-arbitrary definition of "poor" and "middle class". Bonus points: show me the official definition that everyone agrees on. I'll wait. Oh, and while you're doing that, let's also pause for a moment and reflect on whether you disagree that someone that can't save $10k per year is poor, or if you were just looking for an argument on the internet.

taurath 9y ago
You’re the one creating your own definitions and making assertions, accusing someone else of just looking for an argument seems disingenuous.
ryanwaggoner 9y ago
IRA contributions are subject to FICA taxes, as are employee contributions to 401k, etc. FICA taxes withheld from your paycheck regardless of your contributions, and there’s no credit to give some of it back to you on the 1040 because you made an IRA contribution. As for definitions, here’s an official, non-arbitrary one for poverty that’s widely used. I’m sure you’ll just declare it arbitrary, which is fine, but my point is that you just came up with a random definition without anything to back it up or any reasoning as to why that’s the right threshold. Federal poverty guidelines aren’t perfect but they’re not a number out of a hat, which is what you’ve got. https://aspe.hhs.gov/poverty-guidelines https://aspe.hhs.gov/poverty-guidelines