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The scenario being discussed wasn’t about self employed, that’s simply moving the goal post by another user once they got cornered. 50% of marginal income isn’t all that relevant and certainly wouldn’t be normal for 99% of the country on 250k, surely you can come up with examples right? It’s not likely anyone is hitting 50% and property taxes/sales taxes are somewhat discretionary
Incorrect the topic was about someone making $250K, that says nothing about self employed or not - it is you moving the goalpost by trying to limit it to one type of tax by one type of tax payer - this discussion is very much on topic. I am guessing many pay 50% in marginal taxes once include all taxes paid - not just the part on income - sales and property can add substantially and are not discretionary, you must pay them and cost of living where you want. Sounds like think that someone making $250K should be living like they are making much less. But besides the point - the reality is the effective tax rate can easily gobble up much of a $250K income.
Quote:
Originally Posted by Lowexpectations
Make sure you are either understanding or stating this properly. Just because someone goes to an emergency room doesn’t mean they get treatment/care, illegal, uninsured or otherwise. What is and should always be covered is emergency care which is not the same thing as going to the emergency room.
Hospitals are required by federal regulations to provide treatment to uninsured undocumented immigrants who show up in the emergency department and to treat them. The reality is that to many uninsured, an emergency room is the clinic - they pay nothing and are not allowed to be turned away - who do you think pays those costs? Illegals can get taxpayer covered coverage also in some places, Medi-cal is available to all low income under 26 or above 50 regardless of immigration status.
This "debate" and its sister debates in the frugal living forum are the financial porn of our times. People just love to judge others spending habits and too many love to preach about how others should spend their money. Why does it matter to so many people? If the high income earner doesn't have enough this paycheck do they go get a government grant to cover it? If they overspend for years and have to pay the piper eventually, does someone else magically get a commission on this?
Seems a lot of it stems from people who have suffered through having to put themselves on a budget wanting to get some kudos on their ability to stick to it. Good for you, now tell me why others should care? It's your budget, you live with the consequences of it. Don't go looking for others to commend you for it. And if you can't make ends meet don't come to others and act like you deserve to spend more than you can and it's the universe working against you.
Just more signs of the times, too few people these days don't know how to mind their own business. Political nonsense seems to have driven more and more of this as well.
Incorrect the topic was about someone making $250K, that says nothing about self employed or not - it is you moving the goalpost by trying to limit it to one type of tax by one type of tax payer - this discussion is very much on topic. I am guessing many pay 50% in marginal taxes once include all taxes paid - not just the part on income - sales and property can add substantially and are not discretionary, you must pay them and cost of living where you want. Sounds like think that someone making $250K should be living like they are making much less. But besides the point - the reality is the effective tax rate can easily gobble up much of a $250K income.
Hospitals are required by federal regulations to provide treatment to uninsured undocumented immigrants who show up in the emergency department and to treat them. The reality is that to many uninsured, an emergency room is the clinic - they pay nothing and are not allowed to be turned away - who do you think pays those costs? Illegals can get taxpayer covered coverage also in some places, Medi-cal is available to all low income under 26 or above 50 regardless of immigration status.
In my experience in a household with this income and higher, a back of the envelope calculation has us well under 50%. There are lots of (legal) ways to reduce your taxable income without doing anything weird. If somebody is paying 50% of a $250k income in taxes, they need to get themselves to a qualified tax advisor posthaste.
In my experience in a household with this income and higher, a back of the envelope calculation has us well under 50%. There are lots of (legal) ways to reduce your taxable income without doing anything weird. If somebody is paying 50% of a $250k income in taxes, they need to get themselves to a qualified tax advisor posthaste.
No one is saying it applies to most, used to apply to more people when tax rates were significantly higher - tax rates currently are pretty low. Really depends on the situation - most pay well less than 50% but some can be at that rate even now - mainly impacts self employed in high tax states currently.
If single and make $220K in New York, $220K if single and self employed, taxes would be $92,645 for FICA, Fed, State and local taxes (from smart asset data), add property tax on $1.2M of $23,100 and sales tax on $100K of $8,875 so total is $124,620 - overall tax rate of 56.6%. If working for salary, those taxes taxes would be $80,421 - so with property and sales tax would be $112,396 or just over 51%.
In CA, if self employed, you would pay $88,662 in FICA, Fed, State taxes - add $16K in property taxes and $8K in sales taxes get over $112K in taxes which would be a little over 50% of income in taxes. At one point, when tax rates were higher, I was paying close to 50% in taxes.
No one is saying it applies to most, used to apply to more people when tax rates were significantly higher - tax rates currently are pretty low. Really depends on the situation - most pay well less than 50% but some can be at that rate even now - mainly impacts self employed in high tax states currently.
If single and make $220K in New York, $220K if single and self employed, taxes would be $92,645 for FICA, Fed, State and local taxes (from smart asset data), add property tax on $1.2M of $23,100 and sales tax on $100K of $8,875 so total is $124,620 - overall tax rate of 56.6%. If working for salary, those taxes taxes would be $80,421 - so with property and sales tax would be $112,396 or just over 51%.
In CA, if self employed, you would pay $88,662 in FICA, Fed, State taxes - add $16K in property taxes and $8K in sales taxes get over $112K in taxes which would be a little over 50% of income in taxes. At one point, when tax rates were higher, I was paying close to 50% in taxes.
This is a somewhat unusual financial picture you've painted above and just reinforces what I suggested previously. A single, self-employed person living in an extremely high COL region like NY or California really needs to seek professional advice for reducing their taxable income.
Not saying I don't agree with your assessment, things are really bad. But I do wonder (from purely a metric standpoint), how we define "paycheck to paycheck."
The way I am in my life, I could realistically survive 1 year on savings, living exactly as I do now. If I really stretch it out and make it seem like I'm totally broke and only do free things and cut back on everything, I could last 1.5 years without working.
After that point, I'd have to start selling things. I could sell a rental property, which would give me enough money to pay off the home I live in, and then CONTINUE to live for another 5 years without having to work.
So I could last 7 years without having to work, but at that point, I'd then be completely broke, and no assets to my name except my retirement accounts... which I cannot touch. I'd still be 13 years away from retirement.
Does that count as paycheck to paycheck, or does that literally mean that if you miss one paycheck, that you're no longer able to pay any of your bills?
NYC avg cost of apt for family of 4. - $4k
Average electricity bill for apt - $250
Avg cost of monthly food bill - $700
Avg Cost of daycare for 2 kids - $2000
About $7k/month to live here without any form of entertainment.
$7k x 12 = $84,000 in after tax money to live and work here for family of four.
This "debate" and its sister debates in the frugal living forum are the financial porn of our times. People just love to judge others spending habits and too many love to preach about how others should spend their money. Why does it matter to so many people? If the high income earner doesn't have enough this paycheck do they go get a government grant to cover it? If they overspend for years and have to pay the piper eventually, does someone else magically get a commission on this?
Seems a lot of it stems from people who have suffered through having to put themselves on a budget wanting to get some kudos on their ability to stick to it. Good for you, now tell me why others should care? It's your budget, you live with the consequences of it. Don't go looking for others to commend you for it. And if you can't make ends meet don't come to others and act like you deserve to spend more than you can and it's the universe working against you.
Just more signs of the times, too few people these days don't know how to mind their own business. Political nonsense seems to have driven more and more of this as well.
Because when a person goes bankrupt, their unpaid debt doesn't just evaporate into the aethyr. Nope, all the rest of us pay a little more for things to compensate. Every default on a mortgage either pushes in terest rates up, or increases federal taxes so Fannie and Freddie can back up that defaulted mortgage. Every credit card bill that goes unpaid increases interest rates on credit cards.
What started out as a desire not to have people languishing in debtors' prisons for decades, has turned into a free-for-all.
NYC avg cost of apt for family of 4. - $4k
Average electricity bill for apt - $250
Avg cost of monthly food bill - $700
Avg Cost of daycare for 2 kids - $2000
About $7k/month to live here without any form of entertainment.
$7k x 12 = $84,000 in after tax money to live and work here for family of four.
Your example is an outlier. The average NYC resident does not have two children.
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