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Through inside sources, I hear that the IRS revenue from the middle class is around 75% of their income annually. This does not jive with my prior, simple example. But, if this is true, then the middle class (which today really includes much of the lower class and some of what people like to call rich) is paying the majority of federal taxes being paid.
Ooohh. No way. I'm middle class and there is no way the government touches that much of my money... I definitely save more than 33% of my gross annual income in cash so those numbers do not work out. I just hate the attitude of "me me me" and not working as a team, rather than figuring out something that is fair to everyone.
Quote:
Originally Posted by Mr Floyd
It's always "me, me, me" as you put it. We look after our own after all...don't we? Not sure what you meant or the point you are trying to make by saying " At least when the upper class is complaining about paying so much they have nobody to answer to, and they are factually correct."
My friends in the upper class probably pay 50-60% of their income which totals 300k in taxes a year. Maybe after deductions for mortages they are paying 250k? I pay a minute fraction of that ... I don't even know how much I'm paying yet but it is nowhere close in percentage income, and definitely much less in terms of a dollar amount. There is no way I could tell my friends that they are not pulling their weight. I would have absolutely no argument.
Ooohh. No way. I'm middle class and there is no way the government touches that much of my money... I definitely save more than 33% of my gross annual income in cash so those numbers do not work out. I just hate the attitude of "me me me" and not working as a team, rather than figuring out something that is fair to everyone.
My friends in the upper class probably pay 50-60% of their income which totals 300k in taxes a year. Maybe after deductions for mortages they are paying 250k? I pay a minute fraction of that ... I don't even know how much I'm paying yet but it is nowhere close in percentage income, and definitely much less in terms of a dollar amount. There is no way I could tell my friends that they are not pulling their weight. I would have absolutely no argument.
Let me clarify. I am not saying that the IRS taxes the middle class at 75%. I am saying that I heard if you look at the IRS's annual income statement, 75% of the revenue would be from the "middle class". Personally, I keep around 60 to 64% of my gross income. This is after federal, state, social security / Medicare and local taxes. My taxable income (income after tax deferrals, credits and deductions) is around $120k and the taxes paid are around $40k so I guess my "effective rate" is 33%.
BTW, I would not have thought that $165k was middle class income when I was 20. But I knew little about how much things cost and how expensive life can be back then.
Let me clarify. I am not saying that the IRS taxes the middle class at 75%. I am saying that I heard if you look at the IRS's annual income statement, 75% of the revenue would be from the "middle class". Personally, I keep around 60 to 64% of my gross income. This is after federal, state, social security / Medicare and local taxes. My taxable income (income after tax deferrals, credits and deductions) is around $120k and the taxes paid are around $40k so I guess my "effective rate" is 33%.
BTW, I would not have thought that $165k was middle class income when I was 20. But I knew little about how much things cost and how expensive life can be back then.
I did this on another thread.
Back to the issue at hand, the top 10% of INCOME earners. Of the 142 million households the top 10% starts about $125,000 of income. Since the tax stats don't break it out in that much detail I'll need to use the top 12.6% or those making $100,000 or more. They made about 50% of all total income.
Of the total of $1 trillion in TOTAL income tax they paid $768 billion of it. They paid about $150 billion in payroll tax (plus the employers paid another $150 billion) Total SS and Medicare revenue was about $800 billion (half being from the employer).
So let’s add it up. They paid in $918 billion, counting the employer contribution it would be $1.06 Trillion. The total of all individual income and payroll taxes were (not counting employer match) was $1.4 T, so this cohort paid 65%.
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Originally Posted by Wonderful Jellal
49% of Americans didn't pay taxes in 2009, it's shameful, everybody must pay taxes (yes, poor people, even a little bit)
That is only Income tax, add in SS and Medi and it is not that high.
Let me clarify. I am not saying that the IRS taxes the middle class at 75%. I am saying that I heard if you look at the IRS's annual income statement, 75% of the revenue would be from the "middle class". Personally, I keep around 60 to 64% of my gross income. This is after federal, state, social security / Medicare and local taxes. My taxable income (income after tax deferrals, credits and deductions) is around $120k and the taxes paid are around $40k so I guess my "effective rate" is 33%.
BTW, I would not have thought that $165k was middle class income when I was 20. But I knew little about how much things cost and how expensive life can be back then.
Okay i see what you are saying. Does that mean 20-25% of the revenue is generated from the 5-10% uppermost class? I'd still say they carry their weight if that is the case. I mean I can understand why nobody in the middle or upper class want to be responsible for even more taxes but there isn't a whole lot of way around it other than to cut government spending and welfare programs.
The numbers posted by Hilgi in the above post are what I'm more familiar with.
After inflation 165k is probably like 60k decades ago. *sigh*
Personally, I keep around 60 to 64% of my gross income.
Want to bet you do not keep anywhere near that percentage?
Lets assume you are in the 25% federal income tax bracket. Then you have to add your contribution to social security (FICA), which for 2011 is 4.2%. Then you have to add your employers contribution to social security, which for 2011 is 6.2%. If you were self-employed, you would be footing the entire 10.4% yourself. Then you have to add in the MediCare tax, or 2.9% when you combine employee and employer contributions.
So far the average taxpayer is paying 38.3% (25 + 10.4 + 2.9). And that is not including the federal communications tax, or federal consumption taxes on alcohol, tobacco, or gasoline.
By the time you factor in state income taxes, state and local sales taxes, state and local consumption taxes, and property taxes, the average taxpayer is paying well over 50% of their income in taxes of one form or another.
Want to bet you do not keep anywhere near that percentage?
Lets assume you are in the 25% federal income tax bracket. Then you have to add your contribution to social security (FICA), which for 2011 is 4.2%. Then you have to add your employers contribution to social security, which for 2011 is 6.2%. If you were self-employed, you would be footing the entire 10.4% yourself. Then you have to add in the MediCare tax, or 2.9% when you combine employee and employer contributions.
So far the average taxpayer is paying 38.3% (25 + 10.4 + 2.9). And that is not including the federal communications tax, or federal consumption taxes on alcohol, tobacco, or gasoline.
By the time you factor in state income taxes, state and local sales taxes, state and local consumption taxes, and property taxes, the average taxpayer is paying well over 50% of their income in taxes of one form or another.
No doubt Glitch. I was drawing the line at income tax and not including any property tax or use tax. I have exact % figures but not handy.
Okay i see what you are saying. Does that mean 20-25% of the revenue is generated from the 5-10% uppermost class? I'd still say they carry their weight if that is the case. I mean I can understand why nobody in the middle or upper class want to be responsible for even more taxes but there isn't a whole lot of way around it other than to cut government spending and welfare programs.
The numbers posted by Hilgi in the above post are what I'm more familiar with.
After inflation 165k is probably like 60k decades ago. *sigh*
Yes. It is expensive out there. And yet, many people seem to be actively and /or inadvertently asking for more government involvement (thread title..."right wingers claim middle class don't pay enough taxes...") which seems to always lead to more taxes.
As per Hilgi, the definition of middle class gets obscured in this argument. I have a hard time believing that I am anything but middle class even though by Hilgi's numbers, I am in the top ten percent.
Furthermore, I have heard that anyone making $60k or more is in the top ten percent worldwide. That's freaking amazing and really just points out how "bottom heavy" income-wise, the world is. Also, think of the disparity in the top ten...from my $165 to 170k to Bill Gates and Warren Buffet.
Furthermore, I have heard that anyone making $60k or more is in the top ten percent worldwide. That's freaking amazing and really just points out how "bottom heavy" income-wise, the world is. Also, think of the disparity in the top ten...from my $165 to 170k to Bill Gates and Warren Buffet.
That is why I love Nassim Talebs description of the difference between natural bell curves and financial.
Take 1,000 people of all different weights from all over the world and plot them on a bell curve, next add in the fattest man in the world. Even in a bell curve he would hardly show up as a percentage of the total.
Now take 1,000 random people of all different net-worths and plot them on a bell curve, next add in Bill Gates. He would make up over 99% of the total and the rest would be rounding errors.
Our financial and government systems use bell curve models and assume everything is like the first example, when the reality is we see outliers such as example two all the time.
No doubt Glitch. I was drawing the line at income tax and not including any property tax or use tax. I have exact % figures but not handy.
But that is the clincher. They do not just issue a single tax rate and say "pay up" in one lump sum. They break it up into dozens of taxes that you have to pay individually, making it more difficult for the taxpayer to know how much of their total gross income is going to taxes of one form or another (government fees is just another form of a tax).
Now some of that breaking up of your total tax burden is necessary, such as separate taxes for municipalities, counties (or boroughes or parishes), states, and the federal government. Each separate tax authority will have its own separate taxes, but more often than not, each separate tax authority will have numerous forms of taxation.
For the taxpayer to gain an understanding of the total amount of tax they are paying, they need to include all the taxes from each different tax authority. A difficult task indeed.
Just figuring out how much in federal consumption taxes you paid on gasoline last year can be virtually impossible unless you kept track of every gallon of gasoline you purchased in 2010. Which is not something most people do.
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