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At that high bracket, possibly. But my older family members paid their 65%. There was a mortgage deduction, big whoop, and deductions for dependents. That's it, pretty much. No loopholes.
Very few if any people paid 65% effective rates. How on earth do you know the effective rates of relatives from decades ago? I think this is another case of misunderstanding the marginal rate vs effective
At that high bracket, possibly. But my older family members paid their 65%. There was a mortgage deduction, big whoop, and deductions for dependents. That's it, pretty much. No loopholes.
I must be missing something, I don't understand how the higher bracket taking an additional $1,500 of your $10,000 raise negates it, unless your cost of living went up a whole hell of a lot.
I don't know what your state tax rate is but the additional amount you're taking home after the raise is at least $6,000. If your new raise all got popped into a new bracket and you're single claiming standard you were making about $47k, taking home what $33k?
So your increase in cost of living would have to be over 18% in one year to absorb that $6,000 and leave you with nothing more after the raise. Where am I going wrong here, must be something I don't see.
It's the California jack fee. Income tax is over 9%. Some cities also add their own tax on income.
I'd much rather pay high(er) state income tax and lower federal tax. The money stays local and gets invested right back into your immediate circle vs. going to Washington to "disappear".
Yup. Especially for us Californians. We get $78 for every $100 we pay to the Feds.
You're quite misguided if you think George Soros and Ted turner pay the same amount in taxes as people making several hundred thousand.
Their effective tax rate is probably less. They get most of their income as investment income not taxable wages. And those are taxed at a much lower rate than paychecks. That would be a tax loophole.
For those stating that I don't know how the brackets work, i do indeed know how they work and understand that my effective Federal rate is less than 25%. I was talking about keeping less than 70 cents on the dollar after figuring in statutory deductions as well which are also taxes.
I made $65,000 last year in CA and did not contribute to 401k (in short i don't get 401k matching at all so i'd rather invest by other means). Plug that figure in to paycheckcity.com and it indeed comes out to less than 70 cents on the dollar. Here's the figures:
Gross Income $65,000.00
Federal $11,458.75
Social Security $3,317.00
Medicare $942.50
California $3,459.97
SDI $375.68
Net $45,446.10
Now, i'm certainly not going to be homeless if i can help it so i pay rent. In CA rent is expensive and for a 1 bedroom i'm paying $1,500/month and it's nothing special believe me. I've had roommates for many years so i've finally splurged for my own place (for my own sanity more like it). It used to be between $1,000 and $1,100 just 3 years ago for the exact same apartment which is where my COL rant comes in. I won't go in to my other bills/insurance because i think everyone would already get the point off of this.
For those stating that I don't know how the brackets work, i do indeed know how they work and understand that my effective Federal rate is less than 25%. I was talking about keeping less than 70 cents on the dollar after figuring in statutory deductions as well which are also taxes.
I made $65,000 last year in CA and did not contribute to 401k (in short i don't get 401k matching at all so i'd rather invest by other means). Plug that figure in to paycheckcity.com and it indeed comes out to less than 70 cents on the dollar. Here's the figures:
Gross Income $65,000.00
Federal $11,458.75
Social Security $3,317.00
Medicare $942.50
California $3,459.97
SDI $375.68
Net $45,446.10
Now, i'm certainly not going to be homeless if i can help it so i pay rent. In CA rent is expensive and for a 1 bedroom i'm paying $1,500/month and it's nothing special believe me. I've had roommates for many years so i've finally splurged for my own place (for my own sanity more like it). It used to be between $1,000 and $1,100 just 3 years ago for the exact same apartment which is where my COL rant comes in. I won't go in to my other bills/insurance because i think everyone would already get the point off of this.
90% of $1 bil taxed is $100 mil. But that was just the top bracket, not the overall blended rate.
The much more important aspect of high marginal income tax rates is that no one pays them. I mean, no one wants to give 90% to the government. So the rich don't make high incomes, but rather re-invest profits. This results in higher production, jobs, and aggregate wealth.
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