4 ms·

I used to make $9 an hour and was not eligible for Medicaid. ACA exchange in Kentucky (Kynect) wanted well over $100 a month which was not affordable for me, bu

I used to make $9 an hour and was not eligible for Medicaid. ACA exchange in Kentucky (Kynect) wanted well over $100 a month which was not affordable for me, but then again neither was the fee imposed by not having insurance. I paid around 30% of my wages in taxes, which I consider to be quite a lot more than nothing. I was able to live in a very cheap place (with room mates, of course), but not put anything away.

pkaye 6y ago
> 30% of my wages in taxes... That seems a high rate for making $9/hour.
- zaroth 6y ago
  At $9/hr you’re getting EIC and the Federal tax rate is probably negative, not positive.
  - gamblor956 6y ago
    The US does not have a negative federal tax rate, unless you are referring to an effective tax rate (which is the calculated rate you effectively pay based on income, deductions, credits, etc.)
    - simonsarris 6y ago
      The USA does effectively have a negative tax rate at that level with EITC, that's what he's saying. $9/hr * 2080 hours = $18,720 After deductions that's $6,520 of taxable income. Eligible for EITC so a tax rate of negative $3,526. So if they paid zero federal income tax all year they'd get a "refund" check of $3,526 (except its not a refund, since they paid zero, its a negative tax rate) You can see here: https://www.calculator.net/tax-calculator.html?cfilestatus=Single&callowance=0&callowanceold=0&ctaxyear=2019&csalaryincome=18720&cwithheld=00&csalarystate=0&csalarylocal=0&chasbusiness=no&cbusinessincome=0&cestimatedtax=0&cmedicarewage=0&csalaryincome2=0&cwithheld2=0&csalarystate2=0&csalarylocal2=0&chasbusiness2=no&cbusinessincome2=0&cestimatedtax2=0&cmedicarewage2=0&cinterestincome=0&cordinarydividends=0&cqualifieddividends=0&crentalincome=0&cshortcapitalgain=0&clongcapitalgain=0&cotherincome=0&cstatetaxrate=0&cira=0&csalestax=0&cmortgage=0&cdonations=0&cstudentloan=0&cchildcare=0&ctuition=0&ctuition2=0&ctuition3=0&ctuition4=0&cotherdeductable=0&printit=0&x=53&y=24 https://www.calculator.net/tax-calculator.html?cfilestatus=S...
taxreturnq 6y ago
> I paid around 30% of my wages in taxes Before or after your tax return?
- pphysch 6y ago
  Regardless, having a double digit percent of your income held hostage every year is not exactly a win for the worker. Rent is due on day 1, not day 365.
  - xyzzyz 6y ago
    It's not a win, but it's only a problem for the first year of your employment. After the first year, you get the tax back, and you can use it to pay next year's rent.
    - user5994461 6y ago
      Low wage and part time workers are typically not employed all year around. The tax back can be hard to predict in these conditions and vary quite dramatically. It's really hard to work with when one lives paycheck to paycheck and needs the money now.
      - xyzzyz 6y ago
        Right, but then the problem is general lack of funds, not having them delayed by a year. With the exception of the first year of employment, one will have funds from previous year's tax return. I agree that this is annoying, but with minimum level of financial planning and responsibility (e.g. by withdrawing 1/26th of previous year's tax return every two weeks, or by withdrawing whatever fraction of the year one actually works), the effects of tax withholding can be almost completely mitigated. Is your argument that low-wage and part-time workers are irresponsible and cannot be trusted with large windfalls of money around tax return time, because they will squander them faster than they would if the same amount instead was given to them via biweekly installments?
      - dragonwriter 6y ago

pkaye 6y ago

> 30% of my wages in taxes... That seems a high rate for making $9/hour.

zaroth 6y ago
At $9/hr you’re getting EIC and the Federal tax rate is probably negative, not positive.
- gamblor956 6y ago
  The US does not have a negative federal tax rate, unless you are referring to an effective tax rate (which is the calculated rate you effectively pay based on income, deductions, credits, etc.)
  - simonsarris 6y ago
    The USA does effectively have a negative tax rate at that level with EITC, that's what he's saying. $9/hr * 2080 hours = $18,720 After deductions that's $6,520 of taxable income. Eligible for EITC so a tax rate of negative $3,526. So if they paid zero federal income tax all year they'd get a "refund" check of $3,526 (except its not a refund, since they paid zero, its a negative tax rate) You can see here: https://www.calculator.net/tax-calculator.html?cfilestatus=Single&callowance=0&callowanceold=0&ctaxyear=2019&csalaryincome=18720&cwithheld=00&csalarystate=0&csalarylocal=0&chasbusiness=no&cbusinessincome=0&cestimatedtax=0&cmedicarewage=0&csalaryincome2=0&cwithheld2=0&csalarystate2=0&csalarylocal2=0&chasbusiness2=no&cbusinessincome2=0&cestimatedtax2=0&cmedicarewage2=0&cinterestincome=0&cordinarydividends=0&cqualifieddividends=0&crentalincome=0&cshortcapitalgain=0&clongcapitalgain=0&cotherincome=0&cstatetaxrate=0&cira=0&csalestax=0&cmortgage=0&cdonations=0&cstudentloan=0&cchildcare=0&ctuition=0&ctuition2=0&ctuition3=0&ctuition4=0&cotherdeductable=0&printit=0&x=53&y=24 https://www.calculator.net/tax-calculator.html?cfilestatus=S...

taxreturnq 6y ago

> I paid around 30% of my wages in taxes Before or after your tax return?

pphysch 6y ago
Regardless, having a double digit percent of your income held hostage every year is not exactly a win for the worker. Rent is due on day 1, not day 365.
- xyzzyz 6y ago
  It's not a win, but it's only a problem for the first year of your employment. After the first year, you get the tax back, and you can use it to pay next year's rent.
  - user5994461 6y ago
    Low wage and part time workers are typically not employed all year around. The tax back can be hard to predict in these conditions and vary quite dramatically. It's really hard to work with when one lives paycheck to paycheck and needs the money now.
    - xyzzyz 6y ago
      Right, but then the problem is general lack of funds, not having them delayed by a year. With the exception of the first year of employment, one will have funds from previous year's tax return. I agree that this is annoying, but with minimum level of financial planning and responsibility (e.g. by withdrawing 1/26th of previous year's tax return every two weeks, or by withdrawing whatever fraction of the year one actually works), the effects of tax withholding can be almost completely mitigated. Is your argument that low-wage and part-time workers are irresponsible and cannot be trusted with large windfalls of money around tax return time, because they will squander them faster than they would if the same amount instead was given to them via biweekly installments?
    - dragonwriter 6y ago