Taxes

[boosami]

Quite possible. I live in California - contribute to a 401k and have a mortgage - and have 2 children - you wouldn't pay any income taxes on $100k income.

Again, what's the math on this?

Example of a family with a 401(k), mortgage, and kids. They still pay $7,500+ in taxes, nowhere near zero:

Gross
$100,000

Deductions
-$16,500 (401(k) contributions maxed out)
-$12,000 (mortgage interest $200k owed at 6%)
-------
$30,500 (total deductions)

Taxable Income
$100,000 (gross income)
-$30,500 (deductions)
-------
$69,500

Federal Taxes - married filing jointly
$1,650 ($16,700 @ 10%)
+$7,680 ($51,200 @ 15%)
+$400 ($1,600 @ 25%)
-------
$9,730 ($69,500 @ 14% effective tax rate AGI, 9.7% effective tax rate gross)
-$2,000 (child tax credit)
-------
$7,730 in Federal Taxes

[EEinNJ]

Every payday it is sickening to see how much money I get taken out of my paycheck in taxes. Not to mention all of the hidden taxes and sales tax.

If 10% is enough for God, then 10% should be more than enough for Uncle Sam.

What's sickening is the idea that someone would gladly give 10% of their income to a private Sunday morning social club, but resent contributing to the society that provides for the elderly, veterans, defense, roads, the safety of food,drugs, consumer products, regulation of energy, communications, air and maritime transport, the financial system, science research, education- I could go on.

[elessar78]

What's the top tax bracket? 35%? I can understand why Richy Richerson would be upset by that, by the time you take out state and other deductions you're handing over close to half of your income to the government.

It is a tax on the successful, but you're not going to get much sympathy since the voting majority makes less than you. But it is unfair that the top 5% pays 50% of all personal income tax collected and the top 15% of earners pay 85% of all personal income tax collected.

Reducing gov't spending has been a popular refrain for awhile. But we had a Republican president and legislature and there hasn't been any significant reduction in spending or taxes.

[LivingAlmostLarge]

Tax credit is if you owe $2k you don't pay $2k. It's not a child tax deduction.

Don't forget the state income tax deduction, on top of mortgage tax deduction, 401k deduction.

Plus you start out with $100k gross - health insurance, paycheck deductions, what's your actual taxable salary?

[boosami]

Tax credit is if you owe $2k you don't pay $2k. It's not a child tax deduction.

Don't forget the state income tax deduction, on top of mortgage tax deduction, 401k deduction.

Plus you start out with $100k gross - health insurance, paycheck deductions, what's your actual taxable salary?

Sorry, my mistake on the tax credit.

To have a $2,000 tax credit take you to $0 taxes owed, you'd have to owe $2,000 or less in total federal taxes. You have to have an actual taxable income of less than $18,900 to pay that little in taxes. There's no way a normal family with a gross income of $100,000 has $81,100 in deductions and adjustments to get them that low.

If you know otherwise, please send me the contact information for their tax attorney.

[feh]

I don't like taxes any more than the next guy, but compared to so many other countries, or even this country 20 or 30 years ago, what we pay today is minor.

+1

Public services cost money. By all means we should try to avoid wasteful spending and make existing services as efficient as possible, but the general anti-tax sentiment many folks in the US have is mystifying.

Taxes need to be (and will be, before long) raised, to reduce the national debt. If you think things are bad because of the taxes taken out of your paycheck now, wait until China stops loaning us money.

PS - I don' t have a reference available, but I recently read a study where "happiness" (general satisfaction with life) was measured, and the Netherlands was #1. They also have one of the highest tax rates in the world.

[woodie96]

Without taxes, all government programs and subsidies would be defunct. I read (without pictures even) during the hype prior to the election and did a lot of research. One thing that I was surprised that didn't come up hardly at all, was social security and medicare. I will agree that these two programs could be revamped and do away with a huge amount of fluff, waste and fraud. However, when one looks at social security when it was first introduced, there were something like 18 tax payers for every person receiving benefits. This was back in the days when people had larger families and such, hence, the larger numbers of taxpayers. However, by todays numbers, for each person receiving benefits (longer life span, smaller families, etc), that number has dropped to around 3 tax payers for each benefactor.
My mind (all 45 years of it) tells me the math doesnt add up. Something has to give, either benefits will be cut (higher prescriptions, more copays, etc) or taxes will have to increase to pay for it.
Granted getting rid of the fluff, fraud, and waste will help tremendously, but it won't fix the problem. I think if you looked at many other federal programs, you will find the same troubles.
OK...off my soap box now.

[ActYourWage]

What's sickening is the idea that someone would gladly give 10% of their income to a private Sunday morning social club, but resent contributing to the society that provides for the elderly, veterans, defense, roads, the safety of food,drugs, consumer products, regulation of energy, communications, air and maritime transport, the financial system, science research, education- I could go on.

You sir/maam have no idea what you speaking about.

[Snodog]

You guys who think we are taxed too much now. Just wait a few years.

[disneysteve]

You guys who think we are taxed too much now. Just wait a few years.

Yes. The top marginal tax rate today is 35%. Around 1970, the top marginal tax rate was 70% - double what it is today. I wonder how old those people are who are complaining about the current tax burden. I suspect many are too young to remember times of much higher taxes in this country.

[GREENBACK]

Yes. The top marginal tax rate today is 35%. Around 1970, the top marginal tax rate was 70% - double what it is today. I wonder how old those people are who are complaining about the current tax burden.

Anyone paying in that bracket back then was probably far into a career and, likely, is very old or not around now to comment.

Those complaining today (like me) at age 44 aren't complaining as much about tax rates as what they do with the money. If they gov't could show me that they have a clue about spending money positively I wouldn't think twice about tax rates. It is the horrendous...horrendous! waste by gov't at all levels that is disgusting and worthy of complaining about.

It seems to get worse with every decision they make.

[MonkeyMama]

Sorry, my mistake on the tax credit.

To have a $2,000 tax credit take you to $0 taxes owed, you'd have to owe $2,000 or less in total federal taxes. You have to have an actual taxable income of less than $18,900 to pay that little in taxes. There's no way a normal family with a gross income of $100,000 has $81,100 in deductions and adjustments to get them that low.

If you know otherwise, please send me the contact information for their tax attorney.

This is also my pet peeve when people complain about taxes. So many people don't UNDERSTAND them. I have heard people who pay $0 in income taxes complaining about income taxes specifically.

Rant aside...

I prepare taxes - plenty of "normal families" fit in this scenario.

Personal exemptions, 401ks, IRAs, tax-deductible insurance premiums, property taxes, state taxes, mortgage interest, charity deductions, HSAs, dependent care credits, and child tax credits are all extremely common and often add up to $80k. The more kids, the easier it is anyway. But I know plenty of people with 3 kids who easily fit in this scenario.

State taxes and housing prices are high here. Which is why so many people where I live get so many deductions. Certainly in certain regions, few would have much to itemize.

At the $100k level you actually get all these deductions. Make much more and deductions phase out, AMT rears its head, etc., etc.

Reminds me though, when I talk about our tax situation people often assume I've done some advanced voodoo on my own, since I am a tax professional. Hell, I live in california, bought a home and have a couple of kids. That's the extent of my personal tax voodoo. These all add up to some pretty good tax deductions and tax credits. But I didn't buy a home or have kids for tax reasons. I Certainly don't live in this state to save on taxes.

[asmom]

If 10% is enough for God, then 10% should be more than enough for Uncle Sam.

God never asked for 10%, what does He need money for?

I hate paying taxes as much as the next person but I like safe roads, police and fire protection and national defense. Go figure.

[LivingAlmostLarge]

Go find the tax thread, and see what monkeymama pays in taxes. I don't find it all amazing. I know a ton of families making $80-100k where I live that fit in the scenario of $0 taxes.

By the way, my DH and I make more than that, so the upcoming baby doesn't really work other than personal exemption.

Don't forget personal exemption $3300/family member that is 4x $13400 for a family of 4 off the top.

Then add in health insurance, 401k, HSA, childcare tax break $5k/year, state income taxes, mortgage interest, etc.

Getting a tiny income isn't hard. 401k maxed out at $16.5k? Or for both people? $32k off the top.

[Angio333]

over 50% of americans pay 0% federal taxes. Another 25% pay less than 15%, so how is that high?

Truth is if you have 2 kids and make $100k you might be paying $0 in federal taxes with the child tax credit.

In fact with the child tax credit MANY people are getting taxes back from the government as a redistribution of wealth.

So how can we be paying a lot of taxes?

I am in a federal tax bracket where I am paying federal taxes. Not to mention medicare, medicaid, state tax, and city tax.

I also pay sales tax, and all of the added taxes/fees on my phone, etc.