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Your real tax rate: 40%

articles.moneycentral.msn.com

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Re: Your real tax rate: 40%

#51

Post by donohoe »

mixmax wrote: post #46

If you think that's high you should be happy you don't live in Denmark. "The large public sector (30% of the entire workforce on a full-time basis) is financed by the world's highest taxes. A value added tax of 25% is levied on the sale of most goods and services (including groceries). The income tax in Denmark ranges from 42.9% to 63% progressively, levied on 4 out of 10 full-time employees. Such high rates mean tha…

Yes, but to be fair to the Danes their quality of life and the health of their society as a result is amazing.

Re: Your real tax rate: 40%

#52

Post by einarvollset »

dminor wrote: post #15
btilly wrote: post #10

Earlier quoted context omitted.

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.

Well we do pay double per capita what Canada pays for healthcare, so it wouldn't surprise me at all.

That surely can't be for premiums? I remember paying $95/month for full coverage ($179 for a family?) with low (no?) deductible when I lived in BC.

I wish, WISH, for that kind of coverage here in CA. I've got catastrophic coverage only for like $200/month.

Re: Your real tax rate: 40%

#53

Post by 3pt14159 »

btilly wrote: post #10
cperciva wrote: post #2

Canada 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.

When I was looking for work after University I was astonished to find that I would be pay much more taxes in Texas than I would in Ontario. I would still have had a better standard of living though because housing is so much cheaper there and the wages are about 15% higher, but still, it was sobering. One point the original poster forgot to include was that you do eventually have to pay taxes on your RRSP contributions, so it is just tax delayed, not really less taxes. One reason I don't contribute to my RRSP is that I think taxes are going to go well north of where they are today due to the baby boomer strain on social services. Better to take it out now than later.

Re: Your real tax rate: 40%

#54

Post by chadmalik »

cullenking wrote: post #5

As 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 everyon…

"You can't dodge a sales tax"

You're kidding right? Replacing income tax with a national sales tax would immediately create a massive black market that didn't exist.

Its always humorous to me when people claim that a national sales tax would allow the IRS to be done away with. Uh, think it through. the sales tax would need to be around 25% to replace our income taxes. So you don't think people would be trying to dodge that? And the IRS wouldn't be going around checking retailers to make sure they were paying the tax? LOL...you think the IRS is intrusive now, wait until they are trying to track EVERY SINGLE TRANSACTION. Now there's some big government for you!

Re: Your real tax rate: 40%

#55

Post by chadmalik »

nck4222 wrote: post #16

Man, those percentages in the chart at the end are really whacky. Someone making $75,000/year pays a higher % tax their entire life than someone making $200,000/year? Someone making $20,000/year (at 30) pays almost twice the % as someone making $50,000/year (at 30)? That doesn't seem right.

Funny how that works eh. Yet all we hear is whining about "soak the rich" etc.

Re: Your real tax rate: 40%

#56

Post by houseabsolute »

btilly wrote: post #7
dschobel wrote: post #6

Someone 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%.

To put it simply: if you earn a dollar more of income, about forty percent of that dollar will end up going to the government.

Re: Your real tax rate: 40%

#57

Post by anamax »

buro9 wrote: post #38
Retric wrote: post #18

Earlier quoted context omitted.

wow, talk about administrative overhead) would actually effectively lower everyones tax burden by several percentage points. ??? Where is the savings? The IRS is a tiny fraction of US government spending. Edit: IRS $12.15 billion in 2010, total federal expenditures $3.552 trillion . So it's 1/3 of 1% of the federal budget.

You could always try the military... you've got one hell of an expensive lean, mean fighting machine there. I'm pretty sure it would still be as good for defence at a fraction of the cost.

> You could always try the military... you've got one hell of an expensive lean, mean fighting machine there. I'm pretty sure it would still be as good for defence at a fraction of the cost.

The US military is about 6% of Federal spending and didn't jump significantly during Iraq.

For example, Iraq cost about $1T over 8 years. At least one of the stimulus cost about that, and we've had several since 2007.

The long term trend for US military spending is down. It was over 20% before Vietnam.

Re: Your real tax rate: 40%

#58

Post by AlisdairO »

randallsquared wrote: post #34
mcknz wrote: post #29

It's not like the entire tax goes into a black hole -- it would be interesting to see what the return is on the average tax rate: how much benefit is derived from state, federal, and city services (roads, water, security, libraries, parks) and benefits (unemployment, social security, disability).

It's not like the entire tax goes into a black hole It's arguable that we'd be better off were that so... part of the tax burden is all the people employed by those taxes who don't actually contribute anything to society on net (that is, whose jobs wouldn't be done at all on the free market)... in this way, taxes can have something like double their cost in harm, potentially.

I think the fact that a job wouldn't be done in a free market system is not a justification for saying that they don't contribute on net. The free market doesn't lend itself to funding a lot of work that is still worth doing - basic research being an obvious example.

Re: Your real tax rate: 40%

#59

Post by alexyim »

_delirium wrote: post #50
mixmax wrote: post #46

If you think that's high you should be happy you don't live in Denmark. "The large public sector (30% of the entire workforce on a full-time basis) is financed by the world's highest taxes. A value added tax of 25% is levied on the sale of most goods and services (including groceries). The income tax in Denmark ranges from 42.9% to 63% progressively, levied on 4 out of 10 full-time employees. Such high rates mean tha…

The people who do live in Denmark seem pretty happy about doing so, though ( http://www.sciencedaily.com/releases/2006/11/061113093726.ht... ). One reason might be that they're fairly wealthy to begin with, so it's taking a large percentage out of a large pie (Denmark's per-capita GDP is ~DKK 375,000 = ~$62,000). The social safety net is also rather strong as a result of the government's large amount of income, and i…

What does the US have?

Re: Your real tax rate: 40%

#60

Post by dasil003 »

frankus wrote: post #36
patrickgzill wrote: post #27

Earlier quoted context omitted.

Canadians also pay much more for gasoline than Americans. Of course, not all of this is in taxes. To check this: find a "gas buddy" site for a place in Canada, then find one for the nearest US city/town close to it (to control for price disparity due to shipping). Multiply cost per liter by 3.6 to get equivalent US Gallon; then adjust it by current exchange rate. Example: lowest for Vancouver, BC: http://www.vancouve…

Go down to Seattle and it's probably $2.50. We Bellinghamsters have been getting screwed for years (at least relative to the Seattle metro area). There's an odd effect where a high-price area spills over into the neighbo(u)ring areas. I haven't quite figured out an explanation.

Come down to California some time.
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