[ale] Defeated by the offshoring of America....

[Chuck Huber]

On Tue, 15 Apr 2003 at 05:18:17 -0600, Joe wrote:
> Calvin Harrigan <charrig at earthlink.net> writes:
...
> > >I am *READING THESE NUMBERS OFF OF MY 2002 1040 FORM*. Please don't
> > >tell me I don't know what I'm talking about. My total net income in
> > >2002 was $54K, gross was $63K. That is a tax burden of 14.3%,
> > >neglecting sales taxes (which I admit are a significant consideration,
> > >but not *that* significant).
> > >
> > >Obviously, a 66% *marginal* tax rate does not mean you pay 66% on your
> > >entire income. The claim made by others (not you) was that a person
> > >making aroud $60K would only see 33% of their income in their
> > >paycheck. That is demonstrably false.

If all you're looking at is Form 1040, you're missing alot.  Form 1040
only addresses the Federal Income Tax.  It does not address payroll
taxes such as medicare and social security.  Social Insecurity alone
accounts for 7.5% on a paycheck.  So now your 14.3% is up to 21.8%.
By the time you add in the other payroll taxes, and state income taxes,
you're probably sitting in the neighborhood of the high 30%'s - maybe
somewhere around 38%.

Many of the other taxes you pay are not deductable, such as sales taxes
and fuel taxes.  Examining sales taxes alone, 7% in most of metro Atlanta,
for every $1.00 you spend on *product*, you have to have $1.07. In order
to have $1.07, you have to earn $1.73 (recall that you get to keep only
62% of what you earn because you've paid 38% in fed/state/payroll taxes).
The bottom line here is that in order to spend $1.00, you have to earn $1.73,
which means that you're taxed 42%.

While that seems high, don't forget to consider all the other taxes you
pay, such as fuel taxes, ad valorem taxes on your car, and county and city
property taxes (yes, even renters pay property taxes, albeit indirectly).
Now the total tax rate is close to 60%, depending on where you live.

Think that's high?  Not yet.  Bear in mind that your employer must match
the tax you pay in social security and medicare.  They also have to pay
7.5% unemployment insurance as other payroll taxes.  That right there takes
about 15% (7.5% in social insecurity and 7.2% in unemployment insurance)
from what you would have received had your employer not be required
to fork it over to the goverment.  If you look at it now, the total tax
burden for having you as an employee is on the order of 75%.

... and they wonder why the economy is struggling.

Enjoy,
    - Chuck

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