Your real tax rate: 40%
articles.moneycentral.msn.com
Your real tax rate: 40%
1–10 of 170 posts
Re: Your real tax rate: 40%
#2Canada is quite similar: In 2006, from $14k up to $88k the combined Federal+BC income taxes, payroll taxes, and sales tax credits worked out to a flat rate of 26% plus or minus $250. (Above $88k the rate goes up, but mostly due to a cap on the amount which can be "hidden" in retirement funds.)
Graduated tax rates plus low-income tax credits equals a flat tax.
Re: Your real tax rate: 40%
#3I just hope that capital gains taxes stay reasonable. I think they provide a large incentive for small companies to grow and NOT just be lifestyle businesses.
Re: Your real tax rate: 40%
#4I've used 50% as a conservative estimate for all my back-of-the-napkin calculations for years and it has served me well, especially in consulting projects. Sure I can lower that by showing expenses etc. but in the general sense, if I charge $100/hour, what I'm really doing is enabling myself to spend $50/hour in the future. The true benefit of this is that I don't have to feel worried about over/under charging my clients.
Re: Your real tax rate: 40%
#5As a person who wants to pay as little tax as possible (until of course, they start spending the tax money in ways that I see fit, which don't include blowing things up), I have always been against the concept of a single national sales tax, or a flat tax. However, more and more I am realizing that the benefits of axing most of the IRS (wow, talk about administrative overhead) would actually effectively lower everyones tax burden by several percentage points. You can't dodge a sales tax aside from buying used (great incentive to curb our plastic consumer culture), but the good might outweigh my original objections. Let the states decide if they want to makeup the rest with property or sales tax, and the simplified tax system results in huge benefits.
Re: Your real tax rate: 40%
#6Someone enlighten me, how can the author talk about a marginal tax rate for the entirety of ones income?
Isn't a marginal rate by definition the rate which applies to earnings above a specific benchmark (thereby providing no disincentive to cross it)?
Re: Your real tax rate: 40%
#7Someone enlighten me, how can the author talk about a marginal tax rate for the entirety of ones income? Isn't a marginal rate by definition the rate which applies to earnings above a specific benchmark (thereby providing no disincentive to cross it)?
The author didn't do that. Instead he reported on research that found that the effective marginal tax rate across a broad range of incomes and life situations was generally close to 40%. So no matter what your income, your marginal tax rate is probably close to 40%.
Re: Your real tax rate: 40%
#8Someone enlighten me, how can the author talk about a marginal tax rate for the entirety of ones income? Isn't a marginal rate by definition the rate which applies to earnings above a specific benchmark (thereby providing no disincentive to cross it)?
If your marginal tax rate is approximately constant, then it will also approximately equal your overall ratio of tax/income. So even though the article doesn't seem to be particularly careful with the difference, it doesn't really matter in this case.
Re: Your real tax rate: 40%
#9I've used 50% as a conservative estimate for all my back-of-the-napkin calculations for years and it has served me well, especially in consulting projects. Sure I can lower that by showing expenses etc. but in the general sense, if I charge $100/hour, what I'm really doing is enabling myself to spend $50/hour in the future. The true benefit of this is that I don't have to feel worried about over/under charging my cli…
> The true benefit of this is that I don't have to feel worried about over/under charging my clients.
Why not? If you could (should) be charging $120 then that'd be $60 of future spending.
Re: Your real tax rate: 40%
#10Canada is quite similar: In 2006, from $14k up to $88k the combined Federal+BC income taxes, payroll taxes, and sales tax credits worked out to a flat rate of 26% plus or minus $250. (Above $88k the rate goes up, but mostly due to a cap on the amount which can be "hidden" in retirement funds.) Graduated tax rates plus low-income tax credits equals a flat tax.
Really? Effective US tax rates are about a third higher than Canadian rates?
I find that difficult to believe, but I'd be greatly amused if it was true.