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Have you looked at the EITC and how it effects the calculation? I know a fellow engineer with a middle class income, modest mortgage deduction and 2 kids got more back than he put in.
As appropriately addressed by weekender, and stated that your engineer friend is either grossly underpaid or has a creative accountant. Regardless of that, however, does he not pay payroll taxes either?
As of 2005 (according to Tax Policy Center), households making less than $40K still paid at an average rate of about 14% of its income on federal taxes.
As an Engineer, I would expect your friend is very underpaid or has a very creative accountant
Well, he is here in Idaho, and pay scales are low. I'd guess mid $60s at the time, perhaps $10k of mortgage interest, $2k property tax deduction and $3k state income tax. All rough guesses, and I should break out the documentation and do the math myself.
As appropriately addressed by weekender, and stated that your engineer friend is either grossly underpaid or has a creative accountant. Regardless of that, however, does he not pay payroll taxes either?
As of 2005 (according to Tax Policy Center), households making less than $40K still paid at an average rate of about 14% of its income on federal taxes.
I thought this thread was about income tax, and specifically federal income tax, did I miss something?
If you factor in all taxes, 14% seems low, even for lower incomes, when you factor in SS/FICA, state income and property taxes, sales tax and all the taxes on products you purchase that have been taxed throughout the production cycle.
Well, he is here in Idaho, and pay scales are low. I'd guess mid $60s at the time, perhaps $10k of mortgage interest, $2k property tax deduction and $3k state income tax. All rough guesses, and I should break out the documentation and do the math myself.
60K a year is still waaaaaayyyyyy over the EITC limit.
I don't think I've gotten that since I made more than 40K a year, and then it was only a hundred bucks or so.
I thought this thread was about income tax, and specifically federal income tax, did I miss something?
If you factor in all taxes, 14% seems low, even for lower incomes, when you factor in SS/FICA, state income and property taxes, sales tax and all the taxes on products you purchase that have been taxed throughout the production cycle.
Agreed,
If we are to raise the limit on SS contributions, then we'll have to raise the limits on pay outs, or thats not fair.
Personally, I don't feel like giving Bill Gates 40 million a year in SSI benefits, when he turns 67.
Social security will be just fine, if its taken away from the general fund.
I thought this thread was about income tax, and specifically federal income tax, did I miss something?
If you factor in all taxes, 14% seems low, even for lower incomes, when you factor in SS/FICA, state income and property taxes, sales tax and all the taxes on products you purchase that have been taxed throughout the production cycle.
No you aren't missing anything ... the others that believe this BS are missing the point of it ... for those not filing a return ... just file and you'll get ALL YOUR MONEY BACK .... wink, wink, nod, nod.
Pay no attention to that missing $300 out of your paycheck this week ... you really aren't paying any taxes.
I like the other comment ... "I need a new household". That is probably the most lucid response so far.
If we are to raise the limit on SS contributions, then we'll have to raise the limits on pay outs, or thats not fair.
Personally, I don't feel like giving Bill Gates 40 million a year in SSI benefits, when he turns 67.
Social security will be just fine, if its taken away from the general fund.
Well, it would take some MAJOR changes to the laws of social security that are not likely to happen, but I remember one of those government "think tank studies" that was done back in the early 90's; and it suggested just this. It didn't call for a removal of the cap completely, but it basically said to raise the cap a certain percentage and keep the benefit percent at current levels of percentage, and it would make Social Security "secure".
The same study also noted that a temporary increase in overall income tax rates could achieve the same thing and would easier to accomplish, "politically".
Either way it is going to take a tax of one kind or another to bring the funding back into proper alignment and the politicians have got to stop raiding the fund.
Well, it would take some MAJOR changes to the laws of social security that are not likely to happen, but I remember one of those government "think tank studies" that was done back in the early 90's; and it suggested just this. It didn't call for a removal of the cap completely, but it basically said to raise the cap a certain percentage and keep the benefit percent at current levels of percentage, and it would make Social Security "secure".
The same study also noted that a temporary increase in overall income tax rates could achieve the same thing and would easier to accomplish, "politically".
Either way it is going to take a tax of one kind or another to bring the funding back into proper alignment and the politicians have got to stop raiding the fund.
To me, asking someone to pay into social security more, and receive no increase for that, is the very definition of wealth distribution.
I'll complain that the richest Americans pay a lower income tax rate, than me, thats true, and it needs to be fixed. However, I don't want them to have to pay higher taxes than me. More money yes, they have more money, so their tax rate entitles them to pay in more, but not a higher tax rate itself.
I think every American should pay a 20% flat tax. No more sales tax, no more gas tax, no more "progressive tax brackets", no more SSI tax, no more medicare tax, just one, flat tax.
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. I'd guess mid $60s at the time, perhaps $10k of mortgage interest, $2k property tax deduction and $3k state income tax. All rough guesses, and I should break out the documentation and do the math myself.
