Tax bills in 2009 at lowest level since 1950

[Deeko]

I'd be suprised if you could find any individual that paid 40% and I don't think there is even a 60% bracket. Hyperbole much!

40% is possible, when taking into account total tax burden, particularly if they live in a state with high state taxes (such as CA). If I actually calculated all of my sales taxes and whatnot, my total tax burden would likely be mid-30% range. However, my state has no income tax.

60% though...while I won't say its impossible, it seems extremely unlikely.

 

[Patranus]

I'd be suprised if you could find any individual that paid 40% and I don't think there is even a 60% bracket. Hyperbole much!

Lets see....

11% income tax in California

plus

35% federal income tax

plus

3% Medicare tax

plus

13% Social Security Tax

-------

There is 62% right there that is taxed on income alone.

Then we can add on property tax, sales tax (10% in CA), ect and the number grows.

 

[Deeko]

Lets see....

11% income tax in California

plus

35% federal income tax

plus

3% Medicare tax

plus

13% Social Security Tax

-------

There is 62% right there that is taxed on income alone.

First off - while technically the social security tax rate is indeed doubled by your employer, that's just another case of you skewing the numbers. When looking at a report such as the one listed, the tax burden on the individual does not include that - that is included in the tax burden on the corporation. Same goes for medicare.

Second - social security and medicare are capped. They are, in essence, a regressive tax. So someone in the top tax bracket is NOT paying that amount on their entire income.

Third - Federal income tax is not a flat tax. If you earned the $372,000 required to be in the 35% tax bracket, only income above that amount is taxed at that rate. Income below is taxed at a rate according to the bracket.

Fourth - This article is about (and I explicitely specified) effective tax rate, meaning the amount you actually paid, not your tax bracket. You'd be hard pressed to find people making over 370k that don't have significant deductions, thus lowering their effective federal income tax rate.

So, basically, your numbers don't add up. Try again.

 

[Patranus]

First off - while technically the social security tax rate is indeed doubled by your employer, that's just another case of you skewing the numbers. When looking at a report such as the one listed, the tax burden on the individual does not include that - that is included in the tax burden on the corporation. Same goes for medicare.

Where do you think that money comes from?
(Hint: If you are self employed you pay double)

 

[StageLeft]

/facepalm?

Of course they are low because the fvcking economy was in a tailspin.

 

[blackangst1]

First off - while technically the social security tax rate is indeed doubled by your employer, that's just another case of you skewing the numbers. When looking at a report such as the one listed, the tax burden on the individual does not include that - that is included in the tax burden on the corporation. Same goes for medicare.

Second - social security and medicare are capped. They are, in essence, a regressive tax. So someone in the top tax bracket is NOT paying that amount on their entire income.

Third - Federal income tax is not a flat tax. If you earned the $372,000 required to be in the 35% tax bracket, only income above that amount is taxed at that rate. Income below is taxed at a rate according to the bracket.

Fourth - This article is about (and I explicitely specified) effective tax rate, meaning the amount you actually paid, not your tax bracket. You'd be hard pressed to find people making over 370k that don't have significant deductions, thus lowering their effective federal income tax rate.

So, basically, your numbers don't add up. Try again.

Patranus, I usually agree with you; however, in this case, Deeko is correct.

 

[Deeko]

Where do you think that money comes from?
(Hint: If you are self employed you pay double)

Indeed - however, of my four points, that was the most arguable. Its so nice of your to completely ignore the other three, which decimate your attempt at a point.

 

[Patranus]

So, basically, your numbers don't add up. Try again.

You have 50% of the population footing a significant percentage of the bill who you have 50% of the population footing next to nothing.

This article doesn't look at total tax burden on an individual basis, rather it spreads it among those who pay and those who don't pay.

Those who are actually paying something think taxes are too high because they are paying for the other 50% who contribute next to nothing.

The money paid in by those who actually pay something is diluted by those who pay nothing and you result in a reduction in the per person taxes while in reality 50% of those people don't come close to actually paying that number.

If you have 10 people who total pay 100 in taxes the tax burden is 10 per person.
Now if only 5 people only pay 1, the other 5 people have to pay 19.

As you can see using the method in the article, the tax burden looks low but those who are actually paying taxes are not coming close to paying what the perceived tax burden really is.

Like I said, you cannot look at just the total number paid in and divide by the amount of people who paid in. You have to look a the bigger picture.

 

[CPA]

First off - while technically the social security tax rate is indeed doubled by your employer, that's just another case of you skewing the numbers. When looking at a report such as the one listed, the tax burden on the individual does not include that - that is included in the tax burden on the corporation. Same goes for medicare.

Second - social security and medicare are capped. They are, in essence, a regressive tax. So someone in the top tax bracket is NOT paying that amount on their entire income.

Third - Federal income tax is not a flat tax. If you earned the $372,000 required to be in the 35% tax bracket, only income above that amount is taxed at that rate. Income below is taxed at a rate according to the bracket.

Fourth - This article is about (and I explicitely specified) effective tax rate, meaning the amount you actually paid, not your tax bracket. You'd be hard pressed to find people making over 370k that don't have significant deductions, thus lowering their effective federal income tax rate.

So, basically, your numbers don't add up. Try again.

Medicare is NOT capped. Only the SS part is.

 

[blackangst1]

You have 50% of the population footing a significant percentage of the bill who you have 50% of the population footing next to nothing.

This article doesn't look at total tax burden on an individual basis, rather it spreads it among those who pay and those who don't pay.

Those who are actually paying something think taxes are too high because they are paying for the other 50% who contribute next to nothing.

The money paid in by those who actually pay something is diluted by those who pay nothing and you result in a reduction in the per person taxes while in reality 50% of those people don't come close to actually paying that number.

If you have 10 people who total pay 100 in taxes the tax burden is 10 per person.
Now if only 5 people only pay 1, the other 5 people have to pay 19.

As you can see using the method in the article, the tax burden looks low but those who are actually paying taxes are not coming close to paying what the perceived tax burden really is.

I dont think my federal is too high. My wife and I made 6 figures and paid net 21%.

BUT

I think we have far too many who dont pay federal. I think EVERYONE should pay, even if its 1/2%.

 

[Deeko]

Medicare is NOT capped. Only the SS part is.

Ah. My mistake. Luckily, medicare is significantly smaller than social security.

You have 50% of the population footing a significant percentage of the bill who you have 50% of the population footing next to nothing.

This article doesn't look at total tax burden on an individual basis, rather it spreads it among those who pay and those who don't pay.

Those who are actually paying something think taxes are too high because they are paying for the other 50% who contribute next to nothing.

The money paid in by those who actually pay something is diluted by those who pay nothing and you result in a reduction in the per person taxes while in reality 50% of those people don't come close to actually paying that number.

"Next to nothing"? What about that 15% in FICA taxes you're (incorrectly) touting above? What about state taxes - income and/or sales and/or property? They definitely pay a good deal less, but to say they pay "next to nothing" - which, by the way, is very different from your earlier "nothing" - is really not true. I again remind you that this thread is about overall tax burden, not federal income taxes alone.

You keep shifting the subject. You made incorrect statements in this thread, which I've corrected. Rather than own up to your mistakes, you are just shifting to another talking point. Unfortunately for the sake of the discussion, what you shift to has not been any more accurate (or relevant).

 

[hal2kilo]

First off - while technically the social security tax rate is indeed doubled by your employer, that's just another case of you skewing the numbers. When looking at a report such as the one listed, the tax burden on the individual does not include that - that is included in the tax burden on the corporation. Same goes for medicare.

Second - social security and medicare are capped. They are, in essence, a regressive tax. So someone in the top tax bracket is NOT paying that amount on their entire income.

Third - Federal income tax is not a flat tax. If you earned the $372,000 required to be in the 35% tax bracket, only income above that amount is taxed at that rate. Income below is taxed at a rate according to the bracket.

Fourth - This article is about (and I explicitely specified) effective tax rate, meaning the amount you actually paid, not your tax bracket. You'd be hard pressed to find people making over 370k that don't have significant deductions, thus lowering their effective federal income tax rate.

So, basically, your numbers don't add up. Try again.

Damn, you beat me to it. Panus does love quoting federal brackets as if that's what's being taxed on their total income.

 

[umbrella39]

Wait, what? I thought that the government should burn in hell for taxing us to death. Hasn't this pretty much been the Tea Party's main cause -- that taxes are too high?

http://www.usatoday.com/money/perfi/taxes/2010-05-10-taxes_N.htm

Shhh. The sky is falling the sky is falling. No silly, when they got called on that bullshit they started claiming it is the raised taxes they are GOING to pay years down the line. Yes, their crystal ball is still as transparent as their agenda.

 

[woolfe9999]

Lets see....

11% income tax in California

plus

35% federal income tax

plus

3% Medicare tax

plus

13% Social Security Tax

-------

There is 62% right there that is taxed on income alone.

Then we can add on property tax, sales tax (10% in CA), ect and the number grows.

I live in CA and my wife and I are very near the top end tax bracket. We pay nowhere even remotely close to 62%. For the reasons why, see Deeko's posts.

- wolf

 

[First]

Everyone pays federal tax by law, it's called payroll taxes. You can't get out of it with refunds. You're severely handicapped if you think half the population gets out of paying federal taxes, unless you believe Social Security and Medicare don't count (lol).

 

[Deeko]

Damn, you beat me to it. Panus does love quoting federal brackets as if that's what's being taxed on their total income.

What's interesting is that he's quoting the top tax bracket as though that's definitely what they pay - but for the lower tax brackets, he goes by their effective tax rate, not the bracket. You have to use the same method for your entire argument. Shifting from one to the other to make your argument seem stronger only works for shock value.

 

[ProfJohn]

Your are entitled to your own propaganda, Johnny, but not your own facts.

Tell us again what Bush and the GOP Crime Cabal paid for the last ten years?

Give us a link on how they paid for the 2001 and 2003 tax cuts. Give us a link explaining how they paid for the Wars in Afghanistan and Iraq.

Provide other links on how Bush and the GOP paid for the Part D drug program, homeland security and a 70% increase in the DoD.

Provide for us all those links on the tough fiscal oversight and regulation by Bush and the GOP as this nations financial institutions leveraged derivatives from $50 trillion to $500+ trillion in five years.

Then you can tell us about the new-found 'responsible' GOP and their fiscal conservatism ---- and think about removing your clown make-up.
--

Ahh.. it is all Bush's fault. Got it.

Just a few questions.

Bush's worse deficit was his last at $458 billion in 2008

Obama's first deficit was $1.4 trillion. Now $458 billion of that was the carry over from Bush. Another $400 billion was due to falling revenue. The remaining $600 billion was due to additional spending. Who gets the blame for that spending?

Same question for FY 2010. Obama has increased spending by another $200 billion, who gets the blame for that?

In just two years we have gone from spending $2.9 trillion per year to $3.7 trillion an increase of $800 billion. It took Bush 5 years to increase the budget by that amount. Again, who is to blame for this run away spending?

And if it is the fault of the recession and the need to increase spending to counter its effects then why doesn't Obama plan to decrease spending after the recession has ended?


BTW if you want to talk about fiscal oversight we would have to start another thread in which you can explain why Democrats blocked Bush's attempt to increase oversight. And at the same time explain away quotes like the one from Barney Frank about how Frannie and Freddie are perfectly safe.

Or perhaps you can explain this 2006 quote from Barney Frank who became Chairman of the House Financial Services Committee:
“You will see far less difference with Democrats taking over in the Financial Services regulatory area than in virtually any other area of public policy, because we did work together on things like regulatory relief and we have more to do yet in the deregulation. One of the things we did was try to reduce the reporting requirements from the banks to the financial detectives."

Would you like the Frank quotes about not doing anything about Fannie and Freddie too? Or perhaps the quote where he stated that a 10% drop in housing prices was a good thing? Or perhaps his outright denial that we were facing a housing bubble?

Let's face the facts. The Democrats controlled congress for almost 2 years before the economic and banking meltdown and did nothing to prepare for the collapse or even showed signs that they saw it coming. If you want to blame anyone blame both sides for their failures.

 

[simpletron]

That article relates to total tax burden, not federal income tax, so for your sake you might want to edit this post. If you do so, I'll even edit this one to hide the error!

I'm so kind.

The article is taking "Personal current taxes"(line 25) and dividing by "Personal Income"(line 1) in table 2.1.
http://www.bea.gov/national/nipaweb...able=58&Freq=Qtr&FirstYear=2008&LastYear=2010

IX. PERSONAL CURRENT TAXES
Personal current taxes are payments, net of refunds, made by persons that are not chargeable to business expense.1 Personal current taxes consist of taxes on income, including realized net capital gains, taxes on personal property, payments for motor vehicle licenses, and several miscellaneous taxes, licenses, and fees. Social security and Medicare taxes are excluded from personal current taxes. They are treated as an employer (or employee or self-employed) contribution for government social insurance. Personal current taxes also exclude taxes on real property, sales taxes, and certain penalty taxes. Taxes on real property paid by persons, except those primarily engaged in the real estate business, are treated as a business expense that is deducted from both gross monetary rental income and gross imputed rental income in the derivation of net rental income. Real property taxes paid by persons primarily engaged in the real estate business are also treated as a business expense and are deducted in the derivation of proprietors’ income. Sales taxes are included in personal consumption expenditures. Penalty taxes such as the penalty tax on early IRA withdrawals are treated as a personal current transfer payment to government.

So no, it isn't total tax burden either.

 

[ProfJohn]

Everyone pays federal tax by law, it's called payroll taxes. You can't get out of it with refunds. You're severely handicapped if you think half the population gets out of paying federal taxes, unless you believe Social Security and Medicare don't count (lol).

Ever heard of earned income credit??

There are people who have an effective tax rate in the negatives because they get back MORE than they paid.

 

[JS80]

OP fail at math. I paid record taxes in 2009. I will be going up to the next tax bracket for 2010.

 

[Deeko]

The article is taking "Personal current taxes"(line 25) and dividing by "Personal Income"(line 1) in table 2.1.
http://www.bea.gov/national/nipaweb...able=58&Freq=Qtr&FirstYear=2008&LastYear=2010


So no, it isn't total tax burden either.

Hmm, missed the part about SS, but the article does explicitely state sales taxes.

Federal, state and local taxes — including income, property, sales and other taxes — consumed 9.2% of all personal income in 2009, the lowest rate since 1950, the Bureau of Economic Analysis reports.

Perhaps the article is incorrect? However, that doesn't change the fact that Patraneus keeps erroneously going off about a 60% tax rate.

 

[Genx87]

Well cant SS be 12.8% if you are self employed?
Also with credits some people actually see a nice bump in real income from tax returns. I have heard of people having incomes of 15-17K but walking away from several thousand in tax returns via credits.

 

[heyheybooboo]

Well cant SS be 12.8% if you are self employed?
Also with credits some people actually see a nice bump in real income from tax returns. I have heard of people having incomes of 15-17K but walking away from several thousand in tax returns via credits.

Here's the deal (and please, no one take this as tax advice) ...

You deduct half of your paid SS self-employment tax on your salary when determining your adjusted gross income. Standard stuff when doing the ol' tax return.

The real issue is (and I'm talkin' s-corp here) what percentage of your income from the business is declared 'salary' or 'dividend' or 'distribution'.

Some folks go way too heavy on dividend (as in take zero salary). That's a good way to get a visit from Uncle IRS.

The general rule of thumb is to take somewhere between 50-60% in salary ---- the rest in dividend (or a future 'distribution' - you only pay tax on S-corp profits once, for the year it is earned).

When you take a distribution in later years you do not pay taxes on it again, rather it reduces your basis in the S-Corp. This distribution is effectively non-taxed 'income' to you (as long as your basis does not drop below zero) and is not reported on your tax forms.

When you have no more capital 'basis' in the s-corp then the distributions are essentially taxed at long-term capital gains rates for the most part.




(Make your tax advice checks payable to BooBoo, please)

--

 

[ElFenix]

First off - while technically the social security tax rate is indeed doubled by your employer, that's just another case of you skewing the numbers. When looking at a report such as the one listed, the tax burden on the individual does not include that - that is included in the tax burden on the corporation. Same goes for medicare.

it should be included, though. taxes on corporations are really hidden taxes on people. some human being actually pays the "employer's share." but right now we're not entirely certain who that is (the largest share is usually the employee). abolishing taxes on corporations should be done for tax transparency (and also to end the rationale behind very low long term capital gains tax rates)

 

[heyheybooboo]

Ahh.. it is all Bush's fault. Got it.

Just a few questions.

Bush's worse deficit was his last at $458 billion in 2008

(snipped the rest of Johnny's bullshit)

Pssst .... Johnny.

The last 365 Days of Bush the Federal Debt increased:

$1.436 trillion

If you dispute that number, feel free to take it up with the Treasury Department of the United States

Otherwise .... I wonder what the accrued interest is on the $5+ trillion of Bush Debt (that we are now paying)?

Oh ... and way to obfuscate and avoid each single query addressed to you (being the intellectually dishonest twit that you are). Here they are again:

(1) Tell us again what Bush and the GOP Crime Cabal paid for the last ten years?

(2) Give us a link on how they paid for the 2001 and 2003 tax cuts. Give us a link explaining how they paid for the Wars in Afghanistan and Iraq.

(3) Provide other links on how Bush and the GOP paid for the Part D drug program, homeland security and a 70% increase in the DoD.

(4) Provide for us all those links on the tough fiscal oversight and regulation by Bush and the GOP as this nations financial institutions leveraged derivatives from $50 trillion to $500+ trillion in five years.

(5) Then you can tell us about the new-found 'responsible' GOP and their fiscal conservatism ---- and then think about removing your clown make-up.

Way to Fail, Johnny!





--