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To: rhema

“...Take a teacher in California earning $60,000. A current federal rate of 25%, a 9.5% California rate, and 15.3% payroll tax yield a combined income tax rate of 45%. The income tax increases to cover the CBO’s projected federal deficit in 2016 raises that to 52%. Covering future Social Security and Medicare deficits brings the combined marginal tax rate on that middle-income taxpayer to an astounding 71%. That teacher working a summer job would keep just 29% of her wages.”

And then each month, subtract from whatever is left over, the amount the individual pays for higher gas and food prices (from a devalued dollar), cap and trade effective taxes, Internet sales taxes, etc...


16 posted on 07/18/2011 7:03:29 AM PDT by Qbert ("The best defense against usurpatory government is an assertive citizenry" - William F. Buckley, Jr.)
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To: Qbert
“...Take a teacher in California earning $60,000. A current federal rate of 25%, a 9.5% California rate, and 15.3% payroll tax yield a combined income tax rate of 45%.

You're fudging the numbers a bit here.

A single teacher with no dependents and the standard deduction earning a gross salary of $60,000 would owe right around $3,000 in California income tax.

The Social Security and Medicare numbers are paid by both the employeer and employee, but each one has only half of the burden. It's fudging things to assume that every cent of SS and Medicare the employer pays would translate directly into take-home pay for the employee. If you're talking about salaries, it's misleading to include the employer share of payroll taxes in one half of the sentence but not in the other.

So when we're talking about a $60,000 salary, we're really talking about a 7.65% payroll tax. That's $4,590 from the employee, or something like that.

Now we've got income after payroll and state taxes of $7,600.

That amount is deducted from Federal taxes for a rough AGI of $52,400. And that leads to a federal tax tab of $9,288 based on the 2010 tax tables for single filers.

So that's $43,112 after-tax income on a $60,000 salary, for a total tax hit of 28.1%, not 45%. It's bad enough without exaggerating it.

29 posted on 07/18/2011 7:56:57 AM PDT by mvpel (Michael Pelletier)
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