Stephen KIng's Message to Romney

[sly_wolf 199]

reminded me of this

Lol, yes and I was thinking of that too. That statement does apply in many cases .... especially in politics.

[sly_wolf 199]

Some just can't handle basic math.

There's no way in hell you paid 31% in federal taxes as a percentage of your gross income.

Unless you make > $1m

I have my facts and you have yours. I fall in the under $250K family class and I dont have 8 children or loads of assets with writeoffs. My facts are based on my tax reality and it does not come from stuff made up by politicians or political supporters that have a false agenda.

I dont lie and also do not make things up.

[kytwell 179]

sly_wolf, on 16 July 2012 - 08:13 AM, said:

I am self employeed, so I have the priviledge of paying more than my fair share. The rates still dont jive with the tax rate publications which I have read. See below is one example:

http://www.forbes.co...-irs-tax-rates/

You also need to factor in Social Security and Medicare taxes on top of Income tax withholding.

Pay attention to progressive taxation: I had one such productive exchange last week with blog reader Kevin, who pointed out that when we talk about tax rates, we've got to take into account the way they are calculated.

Kevin took issue with my example of a person in the 25 percent income tax bracket. He correctly noted that just because your earnings happen to fall into a certain tax bracket, that's not necessarily the rate of tax you'll pay on your income.

Most of us likely pay a lower overall rate of tax than what our tax bracket indicates. The reason is because our tax system is progressive.

We now have six income tax rates, starting at 10 percent and topping out at 35 percent. And all the ordinary earnings, that is, our wages, are taxed at all those rates.

Take, for example, a single taxpayer making $175,000. That total puts that filer in the 33 percent tax bracket, but he doesn't pay 33 percent on the whole $175,000.

He pays 10 percent, 15 percent, 25 percent, 28 percent and 33 percent on that money based on the amounts that are covered by the tax brackets.

The bottom line is that this hypothetical taxpayer doesn't owe the IRS $57,750, which is 33 percent of $175,000.

Rather, he owes Uncle Sam $42,622, which is an effective tax rate of around 24 percent. This is because parts of his earnings are also taxed at rates lower than his top, marginal tax rate of 33 percent.

Read more: Marginal vs. effective tax rates | Bankrate.com http://www.bankrate.com/financing/taxes/marginal-vs-effective-tax-rates/#ixzz20nbWnvR9

And that doesn't take into account personal exemptions, deductions, children, and since you're self employed we can throw in business related deductions such as home office, percentage of utilities, vehicle, fuel costs, travel, entertainment etc, etc.

If you really paid 31% then you need a new tax person or you are doing extremely well for yourself, because you only pay taxes when you're making money and everyone likes making money.

Remember don't add in Social Security, Medicare, state tax payments and what ever else you paid in as the employer. Just personal income tax to get effective tax rate.

[Usui Takumi 1,562]

I'm in the 75k to 100k segment and I believe my rate turned out to be roughly 11%. Unfortunately, due to where we are in our lives there are not many credits or deductions we are eligible for. This year I took the standard deduction and I think that was about it.

[I AM NOT THAT GUY 5,715]

I'm in the 75k to 100k segment and I believe my rate turned out to be roughly 11%. Unfortunately, due to where we are in our lives there are not many credits or deductions we are eligible for. This year I took the standard deduction and I think that was about it.

We take a standard deduction as well, even though we have numerous itemized deductions. The standard deduction is more than what those deductions add up to, for anyone that is not buried under a jumbo mortgage, or had major medical expenses with an extremely high out of pocket.

I pay more in self-employment tax, at 15.3% than my wife's and my combined income tax by about double, that works out to about 8%.

[Dakine10 5,452]

A person's effective tax rate is the percentage of income that he or she pays in taxes. The effective tax rate for most filers is well below the 25 percent marginal tax rate (the rate paid on a filer's next dollar of income.)

For families making $50,000 to $75,000, the effective tax rate is 5.7%. From $75,000 to $100,000, it's 7.2%. And if you make $200,000, it goes up to 9.9%. Still lower than Romney's.

The effective tax rate is significantly lower than the marginal rate, because the filer takes the standard deduction (or, in some cases, itemized deductions), personal exemptions, and tax credits such as the child tax credit, and because a portion of the taxable income is taxed at lower rates.

You also need to factor in Social Security and Medicare taxes on top of Income tax withholding.

Remember don't add in Social Security, Medicare, state tax payments and what ever else you paid in as the employer. Just personal income tax to get effective tax rate.

Therein lies the source of confusion. Effective tax rate does include social security and medicare taxes. The figures listed above by MaWilson were for effective income tax rates.

Edited July 16, 2012 by Dakine10

[I AM NOT THAT GUY 5,715]

Therein lies the source of confusion. Effective tax rate does include social security and medicare taxes. The figures listed above by MaWilson were for effective income tax rates.

But, social security and medicare are not taxes, they are "insurance".

[rocks 494]

But, social security and medicare are not taxes, they are "insurance".

My pay stub says otherwise.

[I AM NOT THAT GUY 5,715]

My pay stub says otherwise.

So, they are a form of welfare. Thanks for clearing that up.

[Dakine10 5,452]

But, social security and medicare are not taxes, they are "insurance".

[sly_wolf 199]

Therein lies the source of confusion. Effective tax rate does include social security and medicare taxes. The figures listed above by MaWilson were for effective income tax rates.

Anything that I am required to give away to the government, I consider tax .... period.

[Nina~ 431]

Posts removed. Any further posts derailing the topic & personal attacks with result in administrative action.

[mawilson 2,133]

Anything that I am required to give away to the government, I consider tax .... period.

What's your income range, sly? $150k-200k? $200-250k?

Are you filing single or married? If married, joint or separate?

I'm trying to figure out why your effective rate is so high.

[sly_wolf 199]

What's your income range, sly? $150k-200k? $200-250k?

Are you filing single or married? If married, joint or separate?

I'm trying to figure out why your effective rate is so high.

I have an unusual year this year since I got a severance payment early in the year and I also became self employed. Our family income will be in the $200 to 250K range which will then plunge next year. I ran my numbers using last years return to estimate my tax liability as married and joint and it comes to 31% .... this include all estimated monies which we have to give to the goverment including social security payments. Then I have to pay NY state on top of that .... all rather too much I think.

[Usui Takumi 1,562]

I have an unusual year this year since I got a severance payment early in the year and I also became self employed. Our family income will be in the $200 to 250K range which will then plunge next year. I ran my numbers using last years return to estimate my tax liability as married and joint and it comes to 31% .... this include all estimated monies which we have to give to the goverment including social security payments. Then I have to pay NY state on top of that .... all rather too much I think.

So its FED + STATE + SS + MEDICARE + UI...31% makes sense to me.