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Your real tax rate: 40%

articles.moneycentral.msn.com

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Re: Your real tax rate: 40%

#81

Post by jeromec »

_delirium wrote: post #76
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 ar…

Thanks for the explanation, but I don't think I feel better about it. If the recycling center gets my deposit I'm wondering why they need it. I thought the point of a recycling center was that the material they collect (aluminum, plastic, paper etc.) is profitable to collect. The CRV is labeled as a "deposit". To me that should be like a bank term, i.e., you can reclaim what you leave initially. I'm at a loss to understand why this deposit is not fully refunded (which would further encourage recycling!), or at least something reasonable like say 75%.

Re: Your real tax rate: 40%

#82

Post by graywh »

jeromec wrote: post #81
_delirium wrote: post #76

Earlier quoted context omitted.

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 ar…

Thanks for the explanation, but I don't think I feel better about it. If the recycling center gets my deposit I'm wondering why they need it. I thought the point of a recycling center was that the material they collect (aluminum, plastic, paper etc.) is profitable to collect. The CRV is labeled as a "deposit". To me that should be like a bank term, i.e., you can reclaim what you leave initially. I'm at a loss to unde…

Sounds like they could use to increase the deposit and minimum refund amounts.

Re: Your real tax rate: 40%

#83

Post by _delirium »

jeromec wrote: post #81
_delirium wrote: post #76

Earlier quoted context omitted.

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 ar…

Thanks for the explanation, but I don't think I feel better about it. If the recycling center gets my deposit I'm wondering why they need it. I thought the point of a recycling center was that the material they collect (aluminum, plastic, paper etc.) is profitable to collect. The CRV is labeled as a "deposit". To me that should be like a bank term, i.e., you can reclaim what you leave initially. I'm at a loss to unde…

I think only aluminum is unquestionably profitable to collect; everything else is marginal or a loss. But yeah, there does seem to be some bait-and-switch here.

Re: Your real tax rate: 40%

#84

Post by cperciva »

tedunangst wrote: post #80
cperciva wrote: post #33

Earlier quoted context omitted.

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.

I said unlike everything else, not everywhere else. Gasoline is the only thing I can think of in Canada for which the advertised price includes taxes.

Re: Your real tax rate: 40%

#85

Post by rubashov »

donohoe wrote: post #51
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.

As a result of their tax rate and size of government? That's ridiculous.

Denmark is wealthy and comfortable because it's full of Danes. I bet you Danes in the US are even wealthier and more comfortable than Danes in Denmark.

Re: Your real tax rate: 40%

#86

Post by coreymull »

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.

Airlines wouldn't exist in the "free market". Are you arguing that air travel has no net value?

Re: Your real tax rate: 40%

#87

Post by jasonrr »

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 think that's the paper that this particular piece was take from, but maybe I am wrong. It looks to me like this is the actual paper:

http://www.kotlikoff.net/sites/default/files/Comparing%20Ave...

Re: Your real tax rate: 40%

#88

Post by VBprogrammer »

rubashov wrote: post #85
donohoe wrote: post #51

Earlier quoted context omitted.

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

As a result of their tax rate and size of government? That's ridiculous. Denmark is wealthy and comfortable because it's full of Danes. I bet you Danes in the US are even wealthier and more comfortable than Danes in Denmark.

Because America is the greatest country in the world people outside America couldn't possibly be happy with the way they do things?

Re: Your real tax rate: 40%

#89

Post by rada »

kenjackson wrote: post #74
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.

Tax arbitrage means using the difference in tax rates to make extra money. If the tax rate when you contribute to a tax-deferred investment account is higher than the tax rate when you pull the money out, voila, you've profited from tax arbitrage. So I am not sure why you are thinking of income vs. other taxes. The authors are simply saying, if you are a high earner in a top federal tax bracket, it really pays to put money into tax-deferred investments.

Re: Your real tax rate: 40%

#90

Post by cynicalkane »

CWuestefeld wrote: post #48
waqf wrote: post #31

Earlier quoted context omitted.

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

The theorem only works for continuous functions. Tax rates are anything but continuous. They have sharp elbows (e.g., AMT), and some taxes wink into existence and back out again within a finite range (e.g., EIC). I'm not sure that these exceptions are sufficient to allow it to work out, but I'm pretty sure that this rule isn't the impediment.

Then the marginal rate must be flat except for discontinuities. It will effectively not be a flat marginal rate except for finite intervals. And if the tax burden is meaningfully curved, the tax rate must have discontinuities in meaningful places.
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