Pure Capitalism

[Buzz]

There is NO ONE making $250,000 a year who pays $99,000 in federal income tax. That 39.6 % is an incremental rate, it does not apply to the entire $250,000.

I think we had this conversation once.

What would you guess the monthly take home is on $250,0000 per year?

Do you mean 39.6% after removing all deductions that we now have in the tax code?

That leaves the earner with $151,000.

Where I live, there are also state and local taxes that then take a bit over 4% (no significant deductions. That makes the total income tax for that person 43.6%. That takes another $10,000, Leaving $141,000.

I'm not sure what the computation would be for SS & Medicare (due to the income caps), but lets say it works out to another 4% of gross. That's another $10,000. Now leaving $131,000.

Someone earning that much probably owns a home and pays property taxes. Around here that would probably be around $8000/year. Just as an aside, in my school district they spend $14,000/year per student, so if this earner has 2 kids in school, they're getting a veritable "bargain", while I haven't had a kid in school in the 20 years I've lived in this location. I'm kicking in about $3300 a year to make up his deficit. However, I digress. That earner is left with $123,000 of "disposable" income.

So ultimately that person is paying more than 1/2 their income in some form of taxes.

That is one reason why health & disability insurance became an attractive perk for employers to offer ... since it was non-taxable for income tax purposes.

Now, suppose this person is self-employed? All the taxes remain the same, but additionally they must pay for their own health and/or disability insurance; and only that amount over 7.5% of AGI is deductible. That is an inequity in the current tax code.

If we remove all the tax loopholes that those with more income can use, it might not be such a bad idea to have a flat tax that is lower. Franco cited 2%, but I'd guess it would have to be 5 or 10%.

[Buzz]

are you serious? a guy making $250,000 a year needs to pay in $99,000 in taxes?

are you aware of what "tax cuts" ARE NOT AVAILABLE in that tax bracket?

Please educate yourself on how taxes are computed.

[menmon]

Been in that bracket a long time. Oh yea I could have 8 more dogs in training if it was not for uncle sam. That is the price of making money.

[Buzz]

I take it you are okay with the current system in which the guy making $10,000 has an effective tax rate of
-18%. (depending on how many rug rats he's claiming)

I am ok with it, and last year I paid enough taxes to support a family of four above the poverty level...

[Buzz]

Been in that bracket a long time. Oh yea I could have 8 more dogs in training if it was not for uncle sam. That is the price of making money.

I am assuming that, like me, you realize that taxes are a cost of living in one of the greatest countries in history.

[menmon]

One thing to keep in mind is these people in that bracket are making much more because they are deducting mortgage interest and property tax, so their income is more like $400,000 plus.

This small business man that is getting screwed by the system, typically is paying none because he is expensing assets and paying for personal items through his business and since you are taxed on income...most of his earning as expense and expenses of the company.

The small business man has it good...the proffesional is who gets hosed.

[menmon]

A man can live on $151,000 as you say, but a man can't live on $10,000....so why should we want the man not making enough to live pay taxes and the rich not?

[Buzz]

A man can live on $151,000 as you say, but a man can't live on $10,000....so why should we want the man not making enough to live pay taxes and the rich not?

He could also afford to have a dog or two in training with a very good pro, which would amount to more than the poor man has to live on for a year.

[huntinman]

A man can live on $151,000 as you say, but a man can't live on $10,000....so why should we want the man not making enough to live pay taxes and the rich not?

Sambo, since you make so much and like to pay taxes because of your love for the country, take advantage of the VOLUNTARY tax contribution. The IRS will take all that you will send. Buzz, you should do the same.

[menmon]

I am assuming that, like me, you realize that taxes are a cost of living in one of the greatest countries in history.

Right...If after uncle sam gets his part and you need more, just got to pull up on those boot straps and make more money