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Show HN: Calculator for US individual income tax, from 1970-present

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Re: Show HN: Calculator for US individual income tax, from 1970-present

#151

Post by minhazm »

MaxGhenis wrote: post #52
minhazm wrote: post #39

This calculator doesn't seem to support local income taxes, which many states have [1]. For example Maryland has income tax brackets than other states, but each county levies its own income tax on top of that. I usually use smartasset's income tax calculator [2], which also asks for your location so it can factor in any local income taxes as needed. [1] https://www.thebalance.com/cities-that-levy-income-taxes-319...…

SmartAsset is only a rough approximation based on standard deductions/exemptions and the rate structure. It excludes tax credits and other provisions that make taxsim much more accurate, especially for low-income households.

But again taxsim is missing local income taxes entirely. That makes it automatically inaccurate for millions of people. Smart Asset is an estimate but it's at least accurate for the cases that it covers and doesn't claim to be a complete tax calculator.

Anyway taxsim is obviously the more complete tool, but without local income taxes it's unusable for many people like me who live in a state that has local income taxes too.

Re: Show HN: Calculator for US individual income tax, from 1970-present

#152

Post by hippich »

FullyFunctional wrote: post #17
ErikVandeWater wrote: post #6

Earlier quoted context omitted.

The IRS can already calculate your taxes for you. In other countries you just have to confirm what the revenue department calculates as your liability and hit "submit". You have to do the calculations yourself because TurboTax et al., and accountants lobbied so taxes are complicated and must be completed by the filer (or their accountant).

I didn't point that out: I originate from a country in which I used to get a postcard summarizing what they thought I owed with a "Yes, I agree" checkbox and a field to sign. You could always file an extensive return if desired, but unless you had complicated (notably international) transactions, the return was basically accurate. This only works because there's a high level of trust in the government and low corrupt…

I am from the country where most people don't even have to agree to anything - their income taxes already handled by employer on behalf of the government before each paycheck. But there is very low trust in government and it is dictatorship...

I do not know if that was intentionally forced on citizens in the USA to do their own taxes (even tho IRS had accurate information from W3s for nearly half of payers) for that purpose, but I think such exposure to the behind scenes calculation of taxes might force citizens to be more aware of what they are paying.

For example, back to my home country - I think income tax is something like 11% or 13% today. And most folks see this tax on their pay stubs. But what they do not see (although some are aware of) - employer pays extra 36% of the salary into social security. In the USA employee sees at least half of it (6.20% of 12.40%). The health insurance premiums are also prominent on the tax return, same with retirement. None of that is visible in any form to employees in my home country.

Re: Show HN: Calculator for US individual income tax, from 1970-present

#153

Post by brewdad »

UncleMeat wrote: post #127
sgjohnson wrote: post #20

Earlier quoted context omitted.

But nobody ever paid it as there were millions of loopholes.

Up thread somebody asked what these were. A response had credit card interest deductions (rich people aren't running a credit card debt today, and certainly not in 1970) and easier tax fraud. This is such a compelling narrative for the "taxes should be lower" crowd that I'm skeptical. Granted, this is my personal bias. But I would love to see the actual clear examples of how people are deducting like 50% of their inc…

In the 80s mortgage rates hit 20%. So there's a start. Wages weren't quite as skewed to the high end as they are today. The gap between low middle, middle, and upper middle was not as wide, so it was less likely to hit the threshold for the 70% bracket. There were far more single income families, so again, not as likely to hit the threshold. Finally it's a marginal rate. Only income above the threshold would be taxed that much, not one's entire income.

Re: Show HN: Calculator for US individual income tax, from 1970-present

#154

Post by brewdad »

mywittyname wrote: post #132
tick_tock_tick wrote: post #15

This seems beyond misleading it doesn't even have a method to enter most of the now illegal methods to lower your tax bill. Tax straddles were only banned in 1977 before that you should have easily been able to more then halve your tax bill with futures.

I've never heard of tax straddles, but they sound an awful lot like what we now call "tax loss harvesting." > For example, an investor with a capital gain manipulates investments to create an artificial loss from an unrelated transaction to offset their gain in a current year, and postpone the gain till the following tax year.

At least tax loss harvesting is recognizing a real loss. Wash rules mean you can't just dump your money back into the same investment.

Re: Show HN: Calculator for US individual income tax, from 1970-present

#156

Post by MaxGhenis »

minhazm wrote: post #151
MaxGhenis wrote: post #52

Earlier quoted context omitted.

SmartAsset is only a rough approximation based on standard deductions/exemptions and the rate structure. It excludes tax credits and other provisions that make taxsim much more accurate, especially for low-income households.

But again taxsim is missing local income taxes entirely. That makes it automatically inaccurate for millions of people. Smart Asset is an estimate but it's at least accurate for the cases that it covers and doesn't claim to be a complete tax calculator. Anyway taxsim is obviously the more complete tool, but without local income taxes it's unusable for many people like me who live in a state that has local income taxe…

FWIW, we'll have Maryland income taxes, including local income taxes, by the end of July: https://github.com/policyengine/openfisca-us

Re: Show HN: Calculator for US individual income tax, from 1970-present

#157

Post by m0llusk »

ChrisLomont wrote: post #144
m0llusk wrote: post #138

Earlier quoted context omitted.

You are talking about revenue neutral at a population level. What matters to individuals is their own revenue. The impact of these changes on individuals varied a great deal. Many middle class lost valuable deductions while wealthy people saw their rate drop dramatically. There is absolutely nothing remotely neutral about any of that. So the only context where neutrality can be asserted is the same one where the stat…

>You are talking about revenue neutral at a population level. Yes, that is the econometric definition of revenue neutral tax changes. Of course most any change in tax structures will affect individuals, but that is nearly irrelevant (unless you never want a change to tax law). > while wealthy people saw their rate drop dramatically Have you looked up this claim with actual historical effective tax rate numbers? It's…

My dad made around a quarter million a year as an airline pilot and was unable to make use of tax deductions to avoid the 75% taxes. When Reagan did his thing my dad's tax rate went down to around 33% or something like that. My dad loved to go around town bragging about his money and his income. When Reagan's tax cut gave him what amounted to roughly doubling his income he made sure everyone within a radius of five miles or so knew about that. His take home pay went from roughly $65k to $165k and he couldn't stop talking about that. And your point is some population level statistics make that into something that doesn't count. Maybe you need to take a walk and talk to some people to get a clearer idea of how people think about all this?

Re: Show HN: Calculator for US individual income tax, from 1970-present

#158

Post by ChrisLomont »

m0llusk wrote: post #157
ChrisLomont wrote: post #144

Earlier quoted context omitted.

>You are talking about revenue neutral at a population level. Yes, that is the econometric definition of revenue neutral tax changes. Of course most any change in tax structures will affect individuals, but that is nearly irrelevant (unless you never want a change to tax law). > while wealthy people saw their rate drop dramatically Have you looked up this claim with actual historical effective tax rate numbers? It's…

My dad made around a quarter million a year as an airline pilot and was unable to make use of tax deductions to avoid the 75% taxes. When Reagan did his thing my dad's tax rate went down to around 33% or something like that. My dad loved to go around town bragging about his money and his income. When Reagan's tax cut gave him what amounted to roughly doubling his income he made sure everyone within a radius of five m…

So an anecdote, hearsay at best, of one person is stronger evidence than the entirety of the entire population?

Maybe instead of your claiming "wealthy people saw their rate drop dramatically" you should more accurately claim "I heard one wealthy person claim their rate dropped, but I didn't actually inspect their taxes... The majority didn't see this mythical drop. Most saw the opposite." That is the claim you've provided evidence for.

If your world view is formed from choosing one off examples over well-sourced, broad based evidence, it's not surprising you believe things that are simply untrue.

> Maybe you need to take a walk.....

Maybe you need to learn what terms mean and how evidence works to before making wild claims. Anecdotes are irrelvant compared to population when making population claims for good reason.

Re: Show HN: Calculator for US individual income tax, from 1970-present

#159

Post by zizee »

nicoburns wrote: post #122
zizee wrote: post #108

Earlier quoted context omitted.

I think you should not be redefining what words mean to make your argument. Wealthy means to have wealth. Wealth is the abundance of financial assets. Income can become wealth if saved/invested, but it is not wealth. There are numerous definitions of middle class, with many being "not upper, not lower". Upper class is defined as those that have the most wealth (explicitly not income) and political power. $People with…

> $People with 380k of income, but without significant assets are not upper class. They would be considered upper middle class. I mean sure, but anyone able to sustain that income level will quickly become wealthy unless they have ridiculously high spending levels.

They should, but but it is not guaranteed. There is also a long way between having more wealth than most, and becoming upper class where you can live "comfortably" entirely off the earnings of your wealth.

My previous comment seemed to have touched a nerve with some people, which strange given that I (IMO) was politely providing commonly accepted definitions of words/terms, with supporting references. I guess people do not like the actual meanings of the words. Or perhaps I sounded like an condescending asshole :shrug:

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