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Re: Ten Things to Stop Doing in 2006
Old 01-09-2006, 11:02 AM   #81
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Re: Ten Things to Stop Doing in 2006

I guess it goes without saying that a "Dual wage earning family earning $60k each" or $120k/yr total is not a typical household at all, income-wise. This level of income is a little over 2 times the median income of a working family in the U.S.

It seems you are stating the effective tax rate for the hypothetical family earning $120k/yr is 50-60%. Would you like to take a stab at the tax burden for a median income working family - let's say, for the sake of argument, earning $60,000/yr?

My family was right around the median family income last year. For your reference, I will be paying -$1000 in federal income tax (receiving a $1000 refundable tax credit) for tax year 2005. Sure, I'm clever at tax planning, but I think you'll be surprised at just how low the tax burden really is for a typical median income family (not a wealthy family earning 2x the median income).

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Re: Ten Things to Stop Doing in 2006
Old 01-09-2006, 01:16 PM   #82
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Re: Ten Things to Stop Doing in 2006

Quote:
Originally Posted by unclemick2
Duh

Being a left handed INTJ - I vote everyday - in lifestyle choices, how I invest my money, where I live, and I how well I execute 'doing nothing in particular all day and only getting half of it done.'

I don't stay up nights anymore worrying about how the poor knot headed Republicans in my family tree can be 'converted' to enlightenment or some of the bone headed gaffs of my fellow Dem.'s who ought to know better.

Suit up - show up and work the problem one day at a time.

Whining, bitching and general pontificatin' are good clean fun.

I haven't found a good doughnut shop of 'good old pharts' to my liking up here in MO yet - but I'm working on it.

Remember this! I'm the optimist who picked 8500 on the DOW in last years poll.

heh heh heh heh heh heh
Hey Unclemick, Dow just broke 11,000. Man I do love them index funds. Have you found anybody who does a crab boil or shrimp po-boy yet? Probably not in MO.
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Re: Ten Things to Stop Doing in 2006
Old 01-09-2006, 02:17 PM   #83
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Re: Ten Things to Stop Doing in 2006

Quote:
Originally Posted by Eagle43
Hey Unclemick, Dow just broke 11,000. Man I do love them index funds. Have you found anybody who does a crab boil or shrimp po-boy yet? Probably not in MO.
Don't tell Uncilemick that they have a different kind of oyster in those parts
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Re: Ten Things to Stop Doing in 2006
Old 01-09-2006, 02:54 PM   #84
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Re: Ten Things to Stop Doing in 2006

Quote:
Originally Posted by davew894
<<<Sure, I'm clever at tax planning, but I think you'll be surprised at just how low the tax burden really is for a typical median income family (not a wealthy family earning 2x the median income).>>>

Since when is earning $29/hr. 'wealthy'?
go ask a family earning $60,000/yr (which is higher than the median family income) if they think a family earning $120,000 a year is "wealthy".

You must not have much perspective on the middle class, lower class, and working poor in America if you don't think earning $120,000/yr puts you outside the range of "normal" or "typical" incomes and into the range of "wealthy". Maybe not "wealthy" if you look at a sample of dual-income professionals with advanced degrees (probably your circle of friends and coworkers, it is for me at least). But the dual income professional families are at the top decile or quartile of earnings, far from normal, typical, or median in any sense.
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Re: Ten Things to Stop Doing in 2006
Old 01-09-2006, 04:00 PM   #85
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Re: Ten Things to Stop Doing in 2006

I don't see how you get to 50-60% for the dual $60K earners. Even if I assume 10.25% local income taxes, (substituting my state + local tax rates and property taxes), I get:

18.6 K Fed
11.5 State/local
2.4K Property
17.88K SS/Medicare (incl. employers' share)

50.38/120K = 42%

and this is assuming no mortgage or other deductions besides state income tax! A more typical case (6400 in interest, 3000 in deductivle donations) I come up with 48K in taxes, or 40%. And I still am assuming no dependents. I did these with the turbotax online tax estimator.

Personally, we make a bit more than 120K combined, but pay 36% in taxes, as a percent of AGI (i.e. I'm not even including deferred 401(k) income, this pushes is down even further).





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Re: Ten Things to Stop Doing in 2006
Old 01-09-2006, 04:17 PM   #86
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Re: Ten Things to Stop Doing in 2006

Yep Eagle43 and Yakers

Step daughter in spare room - 15 1/2 hr straight thru drive with the ice chests in the back of a pick-up.

Just got back from the doc.'s office - she has to get him a few soft shell crabs from Slidell, LA. Bet her checkup will still cost the same though.

Long ago and far far away (30+ yrs, Denver) - Captain Hooks had a appetizer plate with deep fried Rocky Mountain - oysters, clams, etc of the type you may be referring to: originally belonging to four legged critters. Memory says they weren't tooo bad - taste wise.

heh heh heh

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Re: Ten Things to Stop Doing in 2006
Old 01-09-2006, 04:19 PM   #87
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Re: Ten Things to Stop Doing in 2006

FYI, NC tax rates:
http://www.dor.state.nc.us/taxes/individual/rates.html

Most pay 6% on most of their income. Married taxpayers will pay 7% on taxable income in excess of $21250 up to $100,000. The max rate is 8.25%.

The NC standard deduction is $6000 (instead of $10000 federal). The NC personal exemption is $2500 per head (instead of $3200 per head). A family of 4 will have a combined deduction (standard deduction plus 4 personal exemptions) of $16000.

Looking at a hypothetical family of 4 with total income of $60000, they would pay $2867.50 in NC state income taxes or an effective rate of 4.8%. If this family could make $8,000 in deductible contributions to retirement plans like an IRA or 401k, then their NC tax would be $2307.50, or an effective rate of 3.8%.

What about property taxes? My house property tax was $1307 for my pretty average house that is typical of what many middle class and working class folks live in. That is 2.2% of the hypothetical family's income. Car taxes, fees, registration, inspection, etc? Maybe another $300/yr for two average, middle class cars, or 0.5% of their income.

Sales tax varies from 2% on food to 7% on almost everything else to 8% on food from a restaurant. Gas taxes are significantly higher on a percentage basis (~20%?), but make up a small portion of total expenditures. Let's say a 5% average rate on $30,000 of expenditures per year. Or 2.5% of their total income.

And the "biggie" - federal income tax - $4880 minus $2000 in child tax credits leaves us with a total federal income tax burden of $2880, or an effective rate of 4.8%. If this family could make $8,000 in deductible contributions to retirement plans like an IRA or 401k, then their federal income tax would be $1680.00, or an effective rate of 2.8%.

Payroll/FICA taxes of 7.65% (or you can redo my math by using 15.3% if you like, but then you must include the extra 7.65% in FICA as income, and recalculate the percentages for all other taxes).

All other taxes, fees, miscellaneous government "gotchas", let's be generous and say 2% of the hypothetical family's budget ($1200). This catchall includes the fees and taxes on phone bills, cable, driver's licenses, etc and everything else this gross analysis has neglected to itemize.

I get an effective tax rate of 24.5%. If the family can contribute $8000 to a 401k or IRA, their effective tax rate decreases to 21.5%.

Now if you want to include all your ridiculous "expenses required to earn income" like clothes and food and Tivo and the wall street journal and koolaid and the Internet and underwear, then your tax rate will increase some. Depending on the extent of your expenditures. But for the "average" family, it just isn't 50-60% or anywhere near that much. State tax rates for income, property, and sales are obviously going to vary significantly from state to state. But all states get their revenue from somewhere, and the total tax burdens don't vary by huge amounts.

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Re: Ten Things to Stop Doing in 2006
Old 01-09-2006, 04:28 PM   #88
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Re: Ten Things to Stop Doing in 2006

Thanks Justin. It is always nice to see data in support of opinions.
Like we say in Quality....

In God we trust......everyone else bring data.
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Re: Ten Things to Stop Doing in 2006
Old 01-09-2006, 04:37 PM   #89
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Re: Ten Things to Stop Doing in 2006

Quote:
Originally Posted by SteveR
Thanks Justin. It is always nice to see data in support of opinions.
Like we say in Quality....

In God we trust......everyone else bring data.
speaking of quality, I didn't do any QC/QA on those numbers, so I'd welcome peer review by anybody that loves scheming about taxes as much as I do.

May the numbers speak for themselves though. I think at least 50-60% of us can agree with that.
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Re: Ten Things to Stop Doing in 2006
Old 01-09-2006, 04:39 PM   #90
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Re: Ten Things to Stop Doing in 2006

Information on federal tax burden from 2003:

The best data on trends in overall federal tax burdens come from the Congressional Budget Office.(2) These CBO data provide extensive information for the years from 1979 through 1997 and some data through 2000. This analysis updates these data through 2001.

* The average percentage of income that households in the middle fifth of the income spectrum paid in total federal taxes in 2000, before last year's tax cut was enacted, was close to the lowest on record for the period from 1979 to the present. These households paid an estimated average of 17.2 percent of their income in federal taxes in 2000, only slightly higher than the low point of 17.1 percent of income in 1983.(3)

* The tax cut enacted in 2001 was tilted toward high-income taxpayers, but many of the provisions of most benefit to that group were delayed for several years or more. By contrast, most of the tax cuts that benefit those in the middle of the income distribution took effect almost immediately in whole or significant part, reducing these households' tax burdens noticeably in 2001 and somewhat further in 2002.(4)

In 2001, the middle fifth of households will pay an estimated average of 16.0 percent of income in federal taxes. This is the lowest percentage on record for the period from 1979 to the present.


http://tinyurl.com/agso5

Hard to see that adding up real estate taxes, property taxes and sales taxes is going to take you up to 50%. However, I hardly trust any numbers on the issue of tax burdens.

Even though we are at a high marginal tax rate, our personal tax rate for last year did not approach 50-60%, even including employer fica and paying AMT. (About a third of the income was from capital gains)


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Re: Ten Things to Stop Doing in 2006
Old 01-09-2006, 06:57 PM   #91
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Re: Ten Things to Stop Doing in 2006

Quote:
Originally Posted by Will Work 4 Beer
Personally, we make a bit more than 120K combined, but pay 36% in taxes, as a percent of AGI (i.e. I'm not even including deferred 401(k) income, this pushes is down even further).
This sounds like a real #.

Dave's calculation suffers from a number of errors.

1) A 2 earner family making $120K actually pays about $19K in federal taxes (16%) not 19% (assuming standard deduction)
2) A family making $120K very likely itemizes deductions, meaning that state, local, and property taxes all become deductible - so simply adding them together overstates the tax burden
3) The individual actually only pays 7.5% in FICA.* If feel you have to include the portion you don't pay, then you have to include the portion the company pays on your behalf as income.* In Dave's example that raise income by about $9K and reduces the tax burden to 44% from 47% (before correcting for any other errors).
4) The 4% sales tax # is not really conservative when considering that he applies it against the couples entire income.

The other problem is that $120K is double or triple the income of "most" families.* Dave also split the income between two earners to maximize FICAs take.

"Most" people will actually pay something similar to what I posted earlier for a 4 person family making $50K (updated here to add property taxes).


* * * * * * * * * * * * * * * * * 1/2 FICA* * * * * * * * * * Full FICA
Income* * * * * * * * * * * $50,000* * * * * * * * * * *$53,758
Federal Tax* * * * * * * * *$2,715* * * * * * * * * * * *$2,715
FICA* * * * * * * * * * * * * * *$3,758* * * * * * * * * * * *$7,515
NY State* * * * * * * * * * * *$1,558* * * * * * * * * * * *$1,558
NY Sales tax* * * * * * * * *$1,359** * * * * * * * * * * $1,359*
Property Tax* * * * * * * * *$3,500* * * * * * * * * * * *$3,500
* *Total Tax* * * * * * * * * *$12,889* * * * * * * * * * $16,647

Tax as a % of income* * * 26%* * * * * * * * * * * * * * 31%

*Sales Tax = ($50,000-$2,715- $3,563-$1,558-$3,500-$150/ week in groceries) * 4.25%
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Re: Ten Things to Stop Doing in 2006
Old 01-10-2006, 07:47 AM   #92
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Re: Ten Things to Stop Doing in 2006

Did a back of the envelope calc last year to see if it was worth going through an entire year of receipts to find the actual sales tax I paid v. the gimme number for fed tax purposes. It wasn't...
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Re: Ten Things to Stop Doing in 2006
Old 01-10-2006, 09:48 AM   #93
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Re: Ten Things to Stop Doing in 2006

Old and busted...() and SG's mortgage 'discussions'.

New and exciting...Dave and ...yrs 'discussions' on whatever the hell they're talking about.
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Re: Ten Things to Stop Doing in 2006
Old 01-10-2006, 09:53 AM   #94
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Re: Ten Things to Stop Doing in 2006

Quote:
Originally Posted by davew894
He was on the ballot in NC. Efforts to keep you from knowing who he was were obviously successful.
http://www.libertypoint.org/lpncnews.htm
I stand corrected. The libertarian candidate was on the NC ballot. He received a whopping 0.39% of the votes in my county. Almost enough to allow Kerry to win the county. And by the way, I have voted libertarian for a number of non-presidential races, simply because it was either the libertarian or the democrat on the ballot, and we had enough democrats in town already.
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Re: Ten Things to Stop Doing in 2006
Old 01-10-2006, 10:34 AM   #95
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Re: Ten Things to Stop Doing in 2006

Dave,

I'm a political realist. I view the two-party political process as a necessary evil. I vote for one of the two presidential candidates (dem or repub) based on which one of those two represent my interests best. One of the two is going to win. A vote for the libertarian candidate or Green party candidate is a lost cause, in my opinion. As a result, I wouldn't vote for either candidate unless they had a legitimate chance of winning (self-fulfilling prophecy, I know, I know).

I do like the libertarian point of view on many issues, by the way. I'm pretty laissez-faire, unless there is a market failure.
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Re: Ten Things to Stop Doing in 2006
Old 01-10-2006, 10:39 AM   #96
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Re: Ten Things to Stop Doing in 2006

Taxation is a payment in exchange for services from government. You might not want some of the services--I know I often don't. But the social contract is a matter of compromise.

Libertarians don't make a whole lot of sense to me. There is a reason libertarian societies don't exist in the real world.
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Re: Ten Things to Stop Doing in 2006
Old 01-10-2006, 10:57 AM   #97
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Re: Ten Things to Stop Doing in 2006

Quote:
Originally Posted by justin
Dave,
I view the two-party political process as a necessary evil.
I have come to view this as a positive thing. Competing parties may be more important than any other aspect of our constitution and political process. (Which is why I have a problem with the current Republican dominance of the three branches of govt, and I would not like them ALL to be Demo either.) When I was a kid growing up in the inner city in Chicago we did not even have a Republican precinct captain. Then there was an election and spontaneously about 40% of the area voted Republican. And suddenly we got the sidewalks fixed, new street lights and more attention. Just like that.

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Re: Ten Things to Stop Doing in 2006
Old 01-10-2006, 11:07 AM   #98
 
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Re: Ten Things to Stop Doing in 2006

Quote:
Originally Posted by davew894
It doesn't need to be this way justin. There are lots of countries with many political parties who have a decent shot at winning elections. The capitalists in this country make sure you only have two choices. They can live with either choice you make, because they put them there.
If you took a political science class, you would understand why this is so. It is the rules of the election that 'decide' how many 'effective' political parties that there will be.

In the U.S. the winning candidate only needs the most votes (a Plurality) to win. In France the winning candidate needs a Majority of the Vote to win (51%). That is why in France there are many many poitical parties. They can hold their votes and agree to 'trade' them to another politcal party for concessions. A small party in France is much more effective than a small party in the U.S.

Small politcial parties in the U.S only help the party at the other end of their spectrum. For example the Green Party (which is left of center) voted for Nader in the 2000 election, the candidate that was most far from their point of view (Bush) was helped. If they would have thrown their support for Gore he would have had enough votes that the Supreme Court would not have had to step in an annoit Bush.

It's too bad that the Green Party supporters do not understand Politcial Science.
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Re: Ten Things to Stop Doing in 2006
Old 01-10-2006, 11:09 AM   #99
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Re: Ten Things to Stop Doing in 2006

But look at the fun we had in the california recall election!

Porn stars! Midgets! Actors! Serious guys with no chance!

You cant get this kind of entertainment in france. A mime performing to a jerry lewis soundtrack is the best you're gonna get there.
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Re: Ten Things to Stop Doing in 2006
Old 01-10-2006, 11:10 AM   #100
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Re: Ten Things to Stop Doing in 2006

Quote:
Originally Posted by yakers
Competing parties may be more important than any other aspect of our constitution and political process.
I agree.

Having a 3rd party fringe group that would take votes from one of the two leading parties is bad for one of the two leading parties - and it happens to be bad for the one ideologically closest to the 3rd party fringe group. I may prefer the 3rd party fringe group to one of the two mainstream groups, but a vote for the 3rd party is a vote against the mainstream candidate most closely aligned with the 3rd party group.

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