What is your effective federal income tax rate?
- Thread starter cybrsage
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pcgeek11
Lifer
- Jun 12, 2005
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Seems a bit ( a lot ) high for EFFECTIVE tax rate.
Mine was 12% last year with six figure gross,
LagunaX
Senior member
- Jan 7, 2010
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If you are mid to upper middle class plus living in California or other areas like NYC then you can be effectively >40% with federal, SS, state, and local property/other taxes. That is not even including sales tax. It is not hard either to meet this criteria with a dual income such as 2 married professionals that have no significant deductions if they are employees.
That's just how it is and how a minority of Americans pay the majority of tax.
Even if the likes of Romney pay only 15% (deductions, long term gains, etc.), 15% of millions is still a lot more tax paid total than 30% of $150k.
That's just how it is and how a minority of Americans pay the majority of tax.
Even if the likes of Romney pay only 15% (deductions, long term gains, etc.), 15% of millions is still a lot more tax paid total than 30% of $150k.
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The household I live in was income taxed about 24% federal last year. It won't be as much this year because now he takes Tuesdays and Fridays off, although we volunteer at the clinic on Tuesday. I think VA income is more than 5%. The sad thing is that my dad stopped making a lot of money right before the Bush tax cuts went into effect. I think during most of the Clinton years his effective Federal income tax rate was 33% and we had more deductions then.
He's never been good with money, unfortunately. He pays someone to manage his savings rather than just buying gold and he's lost about 1-2% (plus what inflation has eaten up which is about 5-10% total over the past 6 quarters) each the past 6 or so quarters. He has $1.3Mn in stocks, bonds, and cash (the house is appraised by the city at about $525k), but is about $275k in debt (can't pay the house early because of the income tax), so he's worth $1.025mn not including the house. However, that will rapidly deplete once he retires so I won't inherit anything. If the govt only collected its revenues only in gold and collected half of what they do he'd probably have more than $3mn (plus the house) and I'd never have to work. Needless to say being a doctor's son really went to waste.
He's never been good with money, unfortunately. He pays someone to manage his savings rather than just buying gold and he's lost about 1-2% (plus what inflation has eaten up which is about 5-10% total over the past 6 quarters) each the past 6 or so quarters. He has $1.3Mn in stocks, bonds, and cash (the house is appraised by the city at about $525k), but is about $275k in debt (can't pay the house early because of the income tax), so he's worth $1.025mn not including the house. However, that will rapidly deplete once he retires so I won't inherit anything. If the govt only collected its revenues only in gold and collected half of what they do he'd probably have more than $3mn (plus the house) and I'd never have to work. Needless to say being a doctor's son really went to waste.
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0, I've stopped paying Federal Taxes. I no longer support the Federal Government, I realize there are consequences for my actions, but I really don't care. To much inequality supported by the State, I cannot support such a corrupt entity.
pcgeek11
Lifer
- Jun 12, 2005
- 21,319
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With a low six figs, mortgage interest and no marriage penalty, low teens sounds right.
Mine starts with a 3, i have no mortgage, and i am in marriage penalty territory. And AMT.
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Mew! Most Americans would give their left nut to pay big taxes on big money, regard themselves a fortunate rather than oppressed...
Nice break on income over the SS cutoff, huh?
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- Nov 17, 2011
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Basically, whatever you have to pay, percentage wise, in Federal Income Tax...the amount TurboTax (or a tax firm, or yourself if you do the paper route) says you have to pay.
- Nov 17, 2011
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shira
Diamond Member
- Jan 12, 2005
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That's still not a crisp definition. Example:
Suppose you're married filing jointly and your Adjusted Gross Income (AGI) is $100,000K, but after deductions and exemptions your taxable income is $75K. Assuming all of your income is "ordinary" (no Qualified Dividends or Long Term Captital Gains), the federal tax on $75K is $11,119 (2011 tax tables).
So, is the effective tax rate 11,119/75,000 = 14.8%, or is it 11,119/100,000 = 11.1%?
I based my effective rate on taxable income, not AGI.
Londo_Jowo
Lifer
- Nov 17, 2011
- 13,021
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Not sure, I will look at mine and see which it comes out to be. I will do the math when I get home from work. My initial guess is the latter of your two examples.
kranky
Elite Member
- Oct 9, 1999
- 21,014
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"Effective" tax rate only has meaning when you measure against all your income. Once you start taking off for deductions, exemptions, etc then it's no longer your "effective" tax rate IMHO.
You can't say someone has an effective tax rate of 17% if they had $1 million in income but managed to get their taxable income down to $100K and paid $17,200 in tax. In my view they have an effective tax rate of 1.7%. That's how much tax they paid on their total income.
Isn't the point of looking at effective tax rates to see how much tax is paid on the total income?
You can't say someone has an effective tax rate of 17% if they had $1 million in income but managed to get their taxable income down to $100K and paid $17,200 in tax. In my view they have an effective tax rate of 1.7%. That's how much tax they paid on their total income.
Isn't the point of looking at effective tax rates to see how much tax is paid on the total income?
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