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taxes on the very wealthy in america are incredibly low by european standards , easy to see how you can make a lot of money selling property , stocks etc
Federal Income tax: Single persons and couples making over $400,000 and $450,000 annually (respectively) are taxed 39.6%. The lowest is a 10% tax for singles and couples making up to $9,000 and $17,000 annually (respectively).
Federal Social Security tax: 6.2% on annual wages up to $113,700.
Federal Medicare tax: 1.45% on total annual wages.
State Sales tax: 6%
State Income tax: flat rate 4.35%
Capital gains tax: 4.35%
Property taxes: Usually depends on the millage rate of the municipality. The amount taxed is calculated by multiplying the millage rate against half the value of the home based on a lot of long list of factors (transit, education, fire and police, quality of the home, etc.).
The highest in the state of Michigan is a millage rate of 68. A $100,000 house would cost $3,410 in annual taxes. On average, taxes are about 2 -6 percent of the value of the home with no caps.
Gas (fuel) tax: 19 cents per gallon + 6% sales tax
Cigarettes are taxed at $2 per pack + the federal tax rate of $1 per pack. Other tobacco products are taxed at 32% of the wholesale price.
The social security is 6.2% on employee and another 6.2% on employer, isnt it?
Also how much income can you earn tax free, and how much capital gains tax free?
And are capital gains transferrable year to year?
Michigan seems quite a high rate for property taxes.
taxes on the very wealthy in america are incredibly low by european standards , easy to see how you can make a lot of money selling property , stocks etc
Those are just federal rates though. I think some states (Texas?) have no state income taxes, but some run as high as 15%. http://www.foreignaffairs.com/files/...xChart_700.jpg
The real difference between the US and most 1st world economies seems to be lower fuel duties and lower sales taxes in the US.
All I know is that the sales tax in Maryland is 6%. I find taxes in the U.S. to be impossibly complex. Tax laws differ by state and locality and they're changing all the time.
Moreover, Americans treat taxes like it's a game. There are all kinds of ways to dramatically reduce the taxes you pay - by owning a home and paying mortgage interest, having children and dependents, owning a business or investment rental property, putting money in a tax-deferred retirement account, making donations, having offshore accounts, etc. People who are wealthy have all kinds of loopholes to avoid paying taxes. So, it's literally impossible to know how much money Americans pay in taxes unless you look at their tax returns.
The social security is 6.2% on employee and another 6.2% on employer, isnt it?
Yes. Though I think if an employee works multiple employers, then they're only taxed for one job. And if the employer qualifies, they can get a tax-write off and pay only 5.2% or something like that. Not entirely sure though.
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Also how much income can you earn tax free,
Maximum annual income tax free is $9,350 for a single person under 65; $18,700 for married couples under 65; over 65, the max is $10,750 and $20,900 respectively. Teenagers and full time college students also don't have to pay income taxes.
Keep in mind that the poverty level in the United States is defined as someone making less than $11,000 with an additional $4,000 for every family member in that household; $15,000 for a married couple; $19,000 for a couple and one kid; and so on.
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and how much capital gains tax free?
You can make up to $35,000 on capital gains tax free; $47,000 if you're the head of a household; or $70,000 with a spouse. Above that it's taxed at a maximum of 15%.
Though I think the taxes are supposed to go up to 20% with this whole "fiscal cliff" thing going on. After 2012, there will no longer be tax free capital gains (which would be now) and the lowest incomes are taxed at 10%.
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And are capital gains transferrable year to year?
Yes. Though I think the US just defines it as "long-term" capital gains.
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Michigan seems quite a high rate for property taxes.
Yea people often say that. It would seem that way, but they're really about the same as anywhere in America. The example I used just happen to be in the municipality with the highest millage rate. Most are cheaper.
Yes. Though I think if an employee works multiple employers, then they're only taxed for one job. And if the employer qualifies, they can get a tax-write off and pay only 5.2% or something like that. Not entirely sure though.
Maximum annual income tax free is $9,350 for a single person under 65; $18,700 for married couples under 65; over 65, the max is $10,750 and $20,900 respectively. Teenagers and full time college students also don't have to pay income taxes.
Keep in mind that the poverty level in the United States is defined as someone making less than $11,000 with an additional $4,000 for every family member in that household; $15,000 for a married couple; $19,000 for a couple and one kid; and so on.
You can make up to $35,000 on capital gains tax free; $47,000 if you're the head of a household; or $70,000 with a spouse. Above that it's taxed at a maximum of 15%.
Though I think the taxes are supposed to go up to 20% with this whole "fiscal cliff" thing going on. After 2012, there will no longer be tax free capital gains (which would be now) and the lowest incomes are taxed at 10%.
Yes. Though I think the US just defines it as "long-term" capital gains.
Yea people often say that. It would seem that way, but they're really about the same as anywhere in America. The example I used just happen to be in the municipality with the highest millage rate. Most are cheaper.
thanks....taking the Capital Gains allowance from $35k down to zero seems quite drastic!
All I know is that the sales tax in Maryland is 6%. I find taxes in the U.S. to be impossibly complex. Tax laws differ by state and locality and they're changing all the time.
Moreover, Americans treat taxes like it's a game. There are all kinds of ways to dramatically reduce the taxes you pay - by owning a home and paying mortgage interest, having children and dependents, owning a business or investment rental property, putting money in a tax-deferred retirement account, making donations, having offshore accounts, etc. People who are wealthy have all kinds of loopholes to avoid paying taxes. So, it's literally impossible to know how much money Americans pay in taxes unless you look at their tax returns.
Yes. Everyone HAS to do a tax return there right?
I think most in the UK only do it if they are self employed. Also I think you must pay federal taxes in US even if you are working abroad. Thats quite rare i think, not many countries have that.
You used to get tax relief for mortgages here, but it was phased out about 20 years ago. Doesnt seem to stop people paying silly money for houses though. I think its somewhat unfair, as landlords can still claim it as an expense, but private buyers cannot, so landlords have a cost advantage over others.
I think most in the UK only do it if they are self employed. Also I think you must pay federal taxes in US even if you are working abroad. Thats quite rare i think, not many countries have that.
You used to get tax relief for mortgages here, but it was phased out about 20 years ago. Doesnt seem to stop people paying silly money for houses though. I think its somewhat unfair, as landlords can still claim it as an expense, but private buyers cannot, so landlords have a cost advantage over others.
Yes, basically every working American has to complete a tax return once a year (by law at least). I usually do mine in February or March and use turbotax.com. Taxes are normally due around April 15, however.
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