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Your real tax rate: 40%

articles.moneycentral.msn.com

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Re: Your real tax rate: 40%

#71

Post by orangecat »

waqf wrote: post #31
CWuestefeld wrote: post #12

Earlier quoted context omitted.

The "marginal" think really does throw this off. The "marginal rate" means the amount you'll be taxed for the next dollar you earn. So this tells us little about the rate that each person already paid for the amount below the margin, the "body" of earnings, if you will. Actually, the more I think about it, the more I think that the idea of a flat marginal rate is a good thing: that means there's little disincentive t…

A flat marginal rate with a curved average rate certainly is impossible: http://en.wikipedia.org/wiki/Fundamental_theorem_of_calculus

Wouldn't a completely flat tax with a fixed deduction/rebate achieve that? Say, 25% of your income minus $10k. The marginal rate is always 25%, the average rate is negative for incomes below $40k and asymptotically approaches 25% as it increases.

Re: Your real tax rate: 40%

#72

Post by lazyjeff »

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.

I wish it was $2.50 in Seattle. I'd even be overjoyed to pay the Bellingham price of $2.82. I paid $3.11 to $3.17 the last two times I filled up last week.

Re: Your real tax rate: 40%

#73

Post by mcknz »

endtime wrote: post #67
mcknz wrote: post #62

Earlier quoted context omitted.

I'll concede that's true for government agencies where the work could be done more efficiently in the for-profit world (say the USPS), but there are plenty of agencies whose jobs "wouldn't be done at all on the free market" because there is little profit motive, but are essential none the less. Could you imagine regulatory agencies (SEC, EPA) as for-profit entities? Job and Family services?

There are some private regulatory agencies already - certificate authorities, for example. Seems to pretty much work.

Then there are the ratings agencies (Moody's, S&P) who did such a great job during the crisis, but that's another topic altogether... :)

Re: Your real tax rate: 40%

#74

Post by kenjackson »

rada wrote: post #65

The actual paper is here: http://www.kotlikoff.net/sites/default/files/Does%20It%20Pay... and perhaps the most practical bit is here: The paper provides four main takeaways. First, thanks to the incredible complexity of the U.S. fiscal system, it's essentially impossible for anyone to understand her incentive to work, save, or contribute to retirement acounts absent highly advanced computer technology and software. S…

I don't get the arbitrage takeaway? I thought that income tax was only a part of the puzzle. Maybe half. The other taxes you pay aren't affected by what you put in retirement accounts.

Re: Your real tax rate: 40%

#75

Post by randallsquared »

gchpaco wrote: post #49
randallsquared wrote: post #34

Earlier quoted context omitted.

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.

Citation, please.

http://en.wikipedia.org/wiki/List_of_United_States_federal_a...

If you can find even a single agency on that list which performs a function you wouldn't be willing to pay for, the rest of my comment follows for you, specifically: that agency is a net cost to you comprising both the taxes you pay to fund it (proportionately) and the decrease in wealth caused by keeping those people from contributing to the economy by doing something productive. This isn't specific to the US government, of course; that's just the easiest example.

Re: Your real tax rate: 40%

#76

Post by _delirium »

jeromec wrote: post #66

Semi-related: Can someone explain to me California CRV on recyclable containers? My understanding is that this is meant to encourage recycling, but the deposit amount you pay at the store doesn't equal what you get when you recycle your containers. I checked out the Wikipedia page, and it explains how the "Redemption Value" has changed over the years. If you take one of those large 2.5 Gallon containers of Arrowhead…

I believe the private recycling companies that operate the redemption centers do get the full CRV, rather than the state keeping it (though the state keeps the sales tax on the CRV). If you go as an individual to a recycling company to return containers for a refund, they pay you less than the CRV, the difference going to their costs and profit. Since it seems to not be a very competitive market (recycling centers aren't really competing for your business by offering higher redemption values), almost all of them pay the minimum redemption value that CA law requires them to pay.

Re: Your real tax rate: 40%

#77

Post by randallsquared »

AlisdairO wrote: post #58
randallsquared wrote: post #34

Earlier quoted context omitted.

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.

I'm not sure that's the case, since I'm not sure if government-funded research was more of an effect or a cause of the decline of privately-funded research.

Re: Your real tax rate: 40%

#78

Post by randallsquared »

mcknz wrote: post #73
endtime wrote: post #67

Earlier quoted context omitted.

There are some private regulatory agencies already - certificate authorities, for example. Seems to pretty much work.

Then there are the ratings agencies (Moody's, S&P) who did such a great job during the crisis, but that's another topic altogether... :)

Well, the SEC and EPA have similar recent failures to point to, to be sure. :)

Re: Your real tax rate: 40%

#79

Post by natrius »

chadmalik wrote: post #54
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 dodg…

Value-added taxes are hard to avoid because they're collected at every level of production. A black market would only be able to easily avoid the tax on the difference between the wholesale price and the retail price.

Re: Your real tax rate: 40%

#80

Post by tedunangst »

cperciva wrote: post #33
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…

Canadians also pay much more for gasoline than Americans. Of course, not all of this is in taxes. I think most of the difference is taxes -- unlike pretty much everything else, advertised gasoline prices include federal and provincial sales taxes. In Vancouver they also include a carbon tax (currently $0.048/L) and an additional fuel tax to fund mass transit (currently $0.12/L).

American gas prices include all taxes.
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