4 ms·

21.5% on $100k, are US taxes really that low?

Shivetya 14y ago
Sad to think that people feel taking a fifth of a persons productive output is low. Throw in city and state taxes and burdens can be pretty abysmal. Throw in on top of that all the embedded taxes in nearly every item you buy today and I wonder where our true tax load is. The US does not have a taxing problem, it has a spending problem. Even if the President got his wishes his tax increase on the "rich" would not net more that the US deficit spends in ONE month. If you tax 400K+ it only returns a possible 70 billion more PER YEAR!. Worse, instead of using these taxes to reduce the deficit they already have new spending lined up. So, sorry I feel that even twenty percent is pretty bad. It means for over a fifth of the year I am not working for myself. Since my effective is near thirty percent I spend an incredible amount of time working for someone else.
- maratd 14y ago
  > Throw in city and state taxes and burdens can be pretty abysmal. Ah, see, that's the problem. First, you pay federal income tax. Second, you pay state income tax. Third, you pay payroll taxes/fees. Fourth, you pay property taxes for your residence. Fifth, you pay state/county sales taxes on whatever you decide to buy. Oh, did I mention that widget you bought that came from China probably had some tariffs on it? Made in the USA? No worries. You paid for some of the federal/state payroll taxes/fees the manufacturer was responsible for.
  - maratd 14y ago
    Oops! I thought about it and I forgot one! If you live in a big city, there's a chance they have an income tax of their very own! http://www.nyc.gov/html/dof/html/services/business_tax_nys_income.shtml http://www.nyc.gov/html/dof/html/services/business_tax_nys_i...
- ry0ohki 14y ago
  No to mention us self employed entrepreneurs who pay the "self employment tax"
  - mikeash 14y ago
    Everybody pays it, it's just that half of it gets hidden from view when you're a regular employee.
  - maxerickson 14y ago
    The self employment tax is no less fair than the employer side of social security taxes. The only difference is it doesn't use silly accounting to hide the tax from the employee. It does seem to be the case that the chart omits the ~15% tax that goes to social security and medicare (well, 15% for people earning under the limit). So even the federal taxes on $100,000 are quite some more than 21%.
- mtr 14y ago
  I've lived/worked in several countries, including the US, and my impression is that the US has some of the highest wages and lowest taxes in the world. So compared to the rest of the world I don't think the burdens are 'abysmal'. Does anyone have links to articles that review this in more depth? A quick Google search didn't yield anything relevant.
mikiem 14y ago
Yes. However, each state has its own income taxes and sales taxes. The marginal rate at 100k (the tax rate for each additional dollar earned) is higher (28% according to this article). In my city, in California: 7.75% sales tax, 10.3% state income tax... Oh, social security, Medicare... These add more. My point being that at 100k a California resident (for example) pays much more than 21.5% effective rate, and much more than 28% on each additional dollar earned.
cpursley 14y ago
citricsquid, Don't forget state income tax, sales tax and various other embedded tax. Realistically, taxes are around 40% - 50%. Also keep in mind that we get very little benefits for those tax dollars compared to Europe for example. Our healthcare costs and higher education are not covered by that tax the same way most European countries are. The only thing we do get for that money is perpetual war and bank/industry bailouts. Kind of a raw deal. Preferably, I'd love to see a mixed system. A VAT tax, a flat income tax and capital gains tax. Something like 13/13/13 across the board (or maybe less if the US could get unnecessary spending down - not likely). This has worked brilliantly for several eastern European countries ever since they implemented them.
- citricsquid 14y ago
  Also keep in mind that we get very little benefits for those tax dollars compared to Europe for example. I'd always assumed that US taxes were lower than European taxes due to this (no national health service for example) but from what you and others have pointed out that seems not to be the case. Using the example provided by mikiem of California I would be paying more tax in the US than I do in England (according to this calculator: http://www.paycheckcity.com/calculator/netpay/us/california/calculator.html http://www.paycheckcity.com/calculator/netpay/us/california/...).
  - kokey 14y ago
    Don't forget the hidden NI contribution from your employer, council tax, massive fuel tax, tax on alcohol, etc. That said, I always see California and Europe as the same tax wise.
  - eli_gottlieb 14y ago
    Those bank bailouts ain't gonna pay for themselves! Now tighten your belt /s!
  - james4k 14y ago
    Yeah, I was actually surprised to find how low UK taxes seem to be (or how high US taxes are) when I was investigating it for work several months ago. US spending levels are just outrageous. It would be interesting to compare the national budgets of the US, UK, and a few other countries, perhaps over time.
adventured 14y ago
Low? As a self employed entrepreneur, all in, I pay about 32.5% on the first $65,000. Property taxes are 3% of my income. Throw in sales taxes paid throughout the year. I pay 40% in taxes out of $65,000 - not counting indirect effects of taxes raising the cost of everything I buy.
maxharris 14y ago
Low? Anything above $0 is high because it is forced. No one has the moral right to forcibly take from the life of one person to give to another, no matter how great the need of that other person may happen to be. Every person has the moral right to live for his own sake, as far as he can go through voluntary trade with others. A government based on individual rights is small enough (i.e., just police, military, courts) that it can be funded through voluntary donations.

Sad to think that people feel taking a fifth of a persons productive output is low. Throw in city and state taxes and burdens can be pretty abysmal. Throw in on top of that all the embedded taxes in nearly every item you buy today and I wonder where our true tax load is. The US does not have a taxing problem, it has a spending problem. Even if the President got his wishes his tax increase on the "rich" would not net more that the US deficit spends in ONE month. If you tax 400K+ it only returns a possible 70 billion more PER YEAR!. Worse, instead of using these taxes to reduce the deficit they already have new spending lined up. So, sorry I feel that even twenty percent is pretty bad. It means for over a fifth of the year I am not working for myself. Since my effective is near thirty percent I spend an incredible amount of time working for someone else.

maratd 14y ago
> Throw in city and state taxes and burdens can be pretty abysmal. Ah, see, that's the problem. First, you pay federal income tax. Second, you pay state income tax. Third, you pay payroll taxes/fees. Fourth, you pay property taxes for your residence. Fifth, you pay state/county sales taxes on whatever you decide to buy. Oh, did I mention that widget you bought that came from China probably had some tariffs on it? Made in the USA? No worries. You paid for some of the federal/state payroll taxes/fees the manufacturer was responsible for.
- maratd 14y ago
  Oops! I thought about it and I forgot one! If you live in a big city, there's a chance they have an income tax of their very own! http://www.nyc.gov/html/dof/html/services/business_tax_nys_income.shtml http://www.nyc.gov/html/dof/html/services/business_tax_nys_i...
ry0ohki 14y ago
No to mention us self employed entrepreneurs who pay the "self employment tax"
- mikeash 14y ago
  Everybody pays it, it's just that half of it gets hidden from view when you're a regular employee.
- maxerickson 14y ago
  The self employment tax is no less fair than the employer side of social security taxes. The only difference is it doesn't use silly accounting to hide the tax from the employee. It does seem to be the case that the chart omits the ~15% tax that goes to social security and medicare (well, 15% for people earning under the limit). So even the federal taxes on $100,000 are quite some more than 21%.
mtr 14y ago
I've lived/worked in several countries, including the US, and my impression is that the US has some of the highest wages and lowest taxes in the world. So compared to the rest of the world I don't think the burdens are 'abysmal'. Does anyone have links to articles that review this in more depth? A quick Google search didn't yield anything relevant.

mikiem 14y ago

Yes. However, each state has its own income taxes and sales taxes. The marginal rate at 100k (the tax rate for each additional dollar earned) is higher (28% according to this article). In my city, in California: 7.75% sales tax, 10.3% state income tax... Oh, social security, Medicare... These add more. My point being that at 100k a California resident (for example) pays much more than 21.5% effective rate, and much more than 28% on each additional dollar earned.

cpursley 14y ago

citricsquid, Don't forget state income tax, sales tax and various other embedded tax. Realistically, taxes are around 40% - 50%. Also keep in mind that we get very little benefits for those tax dollars compared to Europe for example. Our healthcare costs and higher education are not covered by that tax the same way most European countries are. The only thing we do get for that money is perpetual war and bank/industry bailouts. Kind of a raw deal. Preferably, I'd love to see a mixed system. A VAT tax, a flat income tax and capital gains tax. Something like 13/13/13 across the board (or maybe less if the US could get unnecessary spending down - not likely). This has worked brilliantly for several eastern European countries ever since they implemented them.

citricsquid 14y ago
Also keep in mind that we get very little benefits for those tax dollars compared to Europe for example. I'd always assumed that US taxes were lower than European taxes due to this (no national health service for example) but from what you and others have pointed out that seems not to be the case. Using the example provided by mikiem of California I would be paying more tax in the US than I do in England (according to this calculator: http://www.paycheckcity.com/calculator/netpay/us/california/calculator.html http://www.paycheckcity.com/calculator/netpay/us/california/...).
- kokey 14y ago
  Don't forget the hidden NI contribution from your employer, council tax, massive fuel tax, tax on alcohol, etc. That said, I always see California and Europe as the same tax wise.
- eli_gottlieb 14y ago
  Those bank bailouts ain't gonna pay for themselves! Now tighten your belt /s!
- james4k 14y ago
  Yeah, I was actually surprised to find how low UK taxes seem to be (or how high US taxes are) when I was investigating it for work several months ago. US spending levels are just outrageous. It would be interesting to compare the national budgets of the US, UK, and a few other countries, perhaps over time.

adventured 14y ago

Low? As a self employed entrepreneur, all in, I pay about 32.5% on the first $65,000. Property taxes are 3% of my income. Throw in sales taxes paid throughout the year. I pay 40% in taxes out of $65,000 - not counting indirect effects of taxes raising the cost of everything I buy.

maxharris 14y ago

Low? Anything above $0 is high because it is forced. No one has the moral right to forcibly take from the life of one person to give to another, no matter how great the need of that other person may happen to be. Every person has the moral right to live for his own sake, as far as he can go through voluntary trade with others. A government based on individual rights is small enough (i.e., just police, military, courts) that it can be funded through voluntary donations.