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radleyas
May 11, 2010 12:29 PM
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This won't stop people from bitching. You can convince people of anything. Remember the whole estate/death tax thing? Oy vey ....

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The_Red_Monkey
May 11, 2010 1:05 PM
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But this is leaving out one very important piece. not only may it be low but the lowest number are actually paying. Nearly half of eligible US citizens pay no federal income tax and in California more than half pay no state income tax. And on top of that many get a refund anyway.

Just looking at a tax rate and then claiming that we should pay more is preposterous. Get all of the facts about who pays and how many pay.

And as for Obama lowering taxes, its a red herring. I have a 25% tax rate that goes up to 28% soon as the evil Bush Tax cuts expire. And lets not forget that relief Obama gave me, It was $15 a month less in taxes. Very generous.

I have no problem paying taxes but I am sick of all the free riders in the system. Everyone uses services so everyone pays.

We reward the lazy and free loading and punish the successful. We hold back smart kids so the dumb ones don't feel bad. We don't keep score in children's sports so there are no losers. Its killing us.

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AnthonyC
May 11, 2010 2:13 PM
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Since the inception of the income tax in the US, we have exempted the first however many dollars of income from taxation (standard deduction + 1 exemption, currently about $9k if you're single, $18k for a married couple) because, you know, those dollars are essential for living. So, people earning very little money can't, and thus don't, pay taxes. Marginal tax rates are progressive because each successive dollar is less essential than the one before. Congress decides what it needs to spend, and uses that info to set the tax rates. It makes moral as well as economic sense to do so progressively.

The rest of the tax deductions/tax credits exist because- guess what- it's easier for congress to spend money if they make it look like a tax cut. Refundable tax credits for those who earn relatively little are equivalent, in all but rhetoric, to welfare programs, but are much easier to pass.

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Duke_Newcombe sez íViva la Revolucion de Chihuahua!
May 11, 2010 1:32 PM
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Say it with me, now...\"the sun-setting of a tax break is NOT, NOT, NOT the same thing as a tax increase\".

That meme is very, very broken.

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barty
May 13, 2010 1:12 AM
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In what fairytale land do you live in?

I don't care what you want to call it, it is an INCREASE!

Congress' failure to act to make the rate decrease permanent is the same thing as them voting to raise the tax rate.

If you don't want to believe that taxes are increasing, then please provide me with your address so I can send you a bill for this supposedly non-existent increase. If some of you folks think we aren't being taxed enough as it is, feel free to open your OWN wallets to pay what you think you should be paying. Do not impress upon your elected officials to raise my taxes to assuage your personal guilt.

Government needs to get its spending under control, period. Instead of asking for more money from the public, they need to learn to work with what they're getting today.

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TouchMyMonkey
May 11, 2010 1:45 PM
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And besides, the Obama administration intends to preserve current tax rates for incomes

For those of you who are wondering what bracket you fall under:
http://en.wikipedia.org/wiki/Income_tax_rates_in_the_united_states#Year_2010_income_brackets_and_tax_rates

For those of you who still insist that the marginal tax rate applies to each and every dollar you earn, you're all idiots for believing the crap they spew on Fox News. If anyone sucks at math more than you (if such a thing is even possible), it's the people you're probably watching on TV \"informing\" you on stuff like taxes. Still, this link explains pretty clearly what a tax bracket is, should you choose to believe it:

http://en.wikipedia.org/wiki/Tax_bracket

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TouchMyMonkey
May 11, 2010 1:49 PM
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Egad! What the first paragraph is supposed to say is, the Obama Administration intends to preserve the current tax structure for those making less than $250,000. Those making more than that will pay what they paid under Clinton, which is still low, historically speaking. No one making a quarter mil or more a year has any right whatsoever to bitch about having to pay 36% or 39.6% in income taxes.

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radleyas
May 11, 2010 3:54 PM
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Not terribly long after Obama took office, my husband and I noticed we each had about an addition $75 dollars in his checks. We certainly pay less tax. It was immediately noticeable.

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shadowhh
May 11, 2010 3:39 PM
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Really, we are paying less in taxes this year, WELL NO DUH. My Wife has been out of work for the past 2 years. We are now single income. We are paying MUCH less in taxes now.

So is nearly 10% of everyone in the US. Not much taxes to pay when you are unemployed, or under employeed

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TuxthePenguin
May 11, 2010 12:46 PM
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See my post below. This number doesn't make any sense. Just counting income and payroll taxes, you hit the 12% tax on all income at $17k of income per person. That's not counting any sales tax, taxes included in phone bills, property taxes, etc.

Not that the \"average\" metric really means anything. The real question we should ask ourselves is how much of your income should you be forced to hand over to the government. Should it top out at 50%? 60%? 90%? If you are a high-earner in California or NYC, you can get above 50% really quickly.

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rob_p
May 11, 2010 1:08 PM
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Agreed, averages are pretty useless on things like this you need to compare the average result to the median.

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Cant_stop_the_rock
May 11, 2010 12:42 PM
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Remember what about it? The government deciding to take half the money of rich people when they die?

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BigDave
May 11, 2010 12:57 PM
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Conservatives who believe that all folks should be able to fend for themselves want to reward the Paris Hiltons and other celebutantes who never have to work a day in their lives by cutting out the estate tax. The estate tax prompted the wealthy robber barons of yesteryear to donate it all away before their death.

You call it \"death tax\" - I counter with Paris Hilton, and raise you a Brandon Davis!

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MichiganWolverine
May 11, 2010 12:48 PM
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The people this tax was designed for actually supported it., People like Bill Gates, Warren Buffet, etc. The estate tax does not matter to 99.5% of the population. The right wing loons presented it as the government taking your inheritance of $50k from grandma, but the reality is it is NOT the case.

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mythago
May 11, 2010 12:45 PM
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You mean the government deciding that a transfer of wealth was taxable after all even though it goes from rich people to other rich people?

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radleyas
May 11, 2010 12:45 PM
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Well, it was called the Estate Tax. As you say, it was a way to tax very wealthy people. But then a certain party started calling it the \"Death Tax\". This was designed to sway public opinion and make the average joe think that this tax would apply to them.

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muadib
May 11, 2010 4:15 PM
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Actually the estate tax hits the family farms the worst of all. Those who want to farm on their inherited land instead of sell it off, get hit with taxes appropriate to if they were selling it.

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johnva
May 11, 2010 4:31 PM
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Actually that's mostly a myth. The estate tax only affects the value above a certain (very high) amount of the estate. And even then, it's not like it's taking the whole value. Plus there are a number of special provisions to help reduce the impact on family farms.

What's really causing more family farms to get broken up and sold upon the death of the owners is the massive increase in VALUE of the land that comes along with urban encroachment, etc. That increase in value can make more of it subject to the estate tax, but that's really just because the owners are now a lot wealthier than they were before the increase in value. I'm not going to sob for them being worth millions of dollars more than they were before. The fact is, land does get repurposed when it's more valuable to use it for some purpose other than farming. That's all that's happening.

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Loias watched common sense die due to lack of health insurance
May 11, 2010 12:30 PM
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The U.S. actually has a much lower tax rate than most developed countries.

http://en.wikipedia.org/wiki/Tax_rates_around_the_world

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Loias watched common sense die due to lack of health insurance
May 11, 2010 5:38 PM
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I loved all the responses, they were right on base. I chose not to make the connection between low taxes and poor services just to see if readers would do it themselves. And you did!

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xxmichaelxx
May 11, 2010 1:55 PM
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Yes, we pay lower taxes than everyone else, but we also have among the worst health care, education, and transportation of any industrialized country. I'd really like my country to be a leader in all these areas, particularly since so many innovations that improve the quality of life in OTHER countries are developed here.

But it's not gonna happen. Drill, baby, drill.

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evnmorlo
May 11, 2010 12:55 PM
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Services provided to citizens are even lower, however.

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dolemite
May 11, 2010 12:44 PM
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To me, it's shocking that quite a few of those countries are only slightly higher than the US, yet provide universal healthcare for people.

If you throw in the fact that some people are paying 20-60% of their income for merely healthcare premiums, we'd probably dwarf those countries.

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Etoiles
May 11, 2010 1:38 PM
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I used to work for an international organization that had offices all around the world. I worked in the NYC branch.

A friend who was over from a European office and I somehow ended up comparing pay notes one day over a drink. After all of my pre-tax payments were taken out (health, dental) and my taxes (fed, fica, state, local) were taken out, she and I received almost the exact same percentage of our salaries as take-home pay. I've seen this with friends from other European countries as well -- we all tend to average between 68% and 75% as take-home pay. and their services (reasonable parental leave; healthcare, etc) are far superior to ours.

On the other hand, none of their governments also has to manage a 300+ million population that spans an entire continent and then some, so it's a little easier.

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johnva
May 11, 2010 1:58 PM
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But more people also means more taxpayers.

The real reasons why Europeans get better services for similar tax rates are 1) their governments don't waste $500/billion/year on \"defense\" and war, and 2) they don't have such strong corporatist political parties that are ideologically opposed to well-designed socialist programs that save money while providing universal services.

Funny how much of the U.S. fiscal irresponsibility boils down to things the GOP wants to do (like the defense spending, and low taxes without cutting spending an equal amount). It's almost like people who hate government are bad at running a government.

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frank64
May 11, 2010 12:54 PM
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I am wondering if the tax they pay for health care is included. Sometimes it is a separate tax and my not be in the numbers. In order to make everything equal we would have to include health care costs for everyone, or better take them out of the calculation since it is a payment for services. Same issue for retirement.

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johnva
May 11, 2010 1:39 PM
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Even accounting for that we're getting a really terrible deal here. We pay almost as much in taxes and we get far fewer social services. Perhaps we should start to rethink some of the U.S.' priorities? Perhaps it's a lot easier to fund generous social services on a reasonably comparable tax rate if you aren't wasting hundreds of billions on \"defense\", much of which consists of gigantic programs that are basically just designed to scam the taxpayers and feed defense contractor corporations?

I say cut the Pentagon's budget by $250/billion a year and go from there. Yes, that will fundamentally shift our trajectory as a nation...in a good way, in my opinion.

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AnthonyC
May 11, 2010 3:12 PM
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We do spend as much on defense as the entire rest of the world combined. Definitely room for improvement there.

And maybe if certain of our allies started paying for their own defense instead of relying on us...

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johnva
May 11, 2010 3:20 PM
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Well, yeah, that's part of the deal. But we are the ones choosing to pay for our \"allies\" defense. We could stop at any time, and in many cases they would be happy to see our troops leave. All I'm suggesting is that perhaps we should consider how out of whack our priorities are on that front. We should take care of our own people first, before worrying about things like paying for wars and grandiose weapons systems that we don't need to defend the United States.

Like I said, much of our \"defense\" spending isn't even really defense. It's just continually money churning through the government and in to corporate coffers so that they can keep making all kinds of things we don't need in order to defend our country. Basically, it's a form of corruption. It's also a huge industry for our country (we export a lot of weapons). I'm just saying that perhaps it would be better if we cut back on the direct spending a bit, focused on, perhaps, selling the planes and stuff to other friendly countries so that they could defend themselves, and use the money for some more productive purpose that doesn't involve killing and making the whole world a more dangerous place.

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jessjj347
May 11, 2010 12:36 PM
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Thanks for providing this chart.

The corporate tax rate in the U.S. is the second highest among those countries, which is interesting since our personal tax rate is lower than most other countries.

Also, they only provide a mean income tax rate with no mode. It's hard to use this comparison of countries without knowing the range of tax rates. For instance, in the U.S. I know that there are several tax brackets, but how does it work in these other countries?

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johnva
May 11, 2010 1:19 PM
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There's a huge difference between effective tax rate and nominal tax rate. U.S. corporate tax rates may be \"high\", but many large corporations pay very little tax because of all the tax breaks that are available to them.

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Polish Engineer
May 11, 2010 12:31 PM
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I don't know about anyone else, but I find that number amazingly low. A quarter of my check goes to the govt and then add on 7% sales tax for everything I purchase in the state.

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kujospam
May 13, 2010 12:12 AM
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Not sure who here can read or not. But it says 9% of all income. Richer people which are few of. Pay more taxes, but there is few rich people. Mean while Low income people pay generally no taxes. Average all those people out together, and you will get 9%.

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Naame
May 11, 2010 2:46 PM
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That's how much they take out of mine, but before I get my return every year. Do you get money back after filing your taxes? If you get money back every year then you could setup your taxes so that they take out a lot less per paycheck you know.

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xxmichaelxx
May 11, 2010 1:56 PM
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The plural of \"anecdote\" is not \"data\".

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The_Fuzz_53
May 11, 2010 1:26 PM
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Same here, then I have to kick in $500 a month in property taxes.

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Elcheecho
May 11, 2010 12:55 PM
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clearly we should judge the validity of summary statistics by a single observed value. mmmmm, science!

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You Can Call Me Al(isa)
May 11, 2010 12:34 PM
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9.2% huh? I get about 25% of each of my paycheck taken away. That's not including sales taxes. I'd like to know who's only paying 9% of their income in taxes.

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johnva
May 11, 2010 1:46 PM
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I see you admitted that that includes other forms of taxation such as Social Security and Medicare. Does it also include things like disability insurance, health insurance, unemployment insurance, or 401(k) contributions? Are you overwithholding? Unless you look at all of these things, the amount coming out of your paycheck is a really poor way to judge how much you are being taxed. Instead, try calculating your effective income tax rate when you do your tax return, after all the deductions and credits are taken out. Because the rates are historically low, although the complexity of the tax system means that some people get hit harder than others (particularly single people with no kids, no mortgage, and a high income).

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kb01
May 11, 2010 1:02 PM
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I was thinking the same thing. My wife and I are middle class and pay way more than 9.2%

Federal taxes: 19% (after itemizing)
SSI: 6.2%
Medicare: 1.45%
State Taxes: 5%
Local Taxes: 1.5%
Property Taxes: ~ 1.5%
Personal Property Taxes: 0.5%
Sales Tax: 6%

And this doesn't include all of the excise taxes and surcharges added to utilities. I'm assuming this is about average for a typical family in the US. Historically, it may be low but tax rates will eventually go up to service our massive national debt and this will hit all of us who have tax deferred retirement accounts.

Our tax rates might be low compared to Europe (based on my experience doing contracting work in the 1990's) but in Europe, their taxes also include their pensions and health insurance, an elaborate safety net, higher education, etc. These are all things that Americans pay out-of-pocket through IRAs, health insurance premiums, supplemental insurance policies, AFLAC, student loans, etc.

Our tax rates may not be terribly high but I don't feel like we get a lot in return compared to most of the Western world.

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You Can Call Me Al(isa)
May 11, 2010 12:54 PM
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Sorry for that incorrect estimate. I posted before actually checking and calculating. It's more like 17%.

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Putts
May 11, 2010 12:54 PM
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You can start by looking at the 47% of Americans that paid $0 in income taxes last year.

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mythago
May 11, 2010 8:00 PM
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Yeah, I'll go home and look at three of them tonight and ask if they've done their homework. Darn freeloading kids! How dare they not pay taxes just because they don't have jobs and are minors!

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TouchMyMonkey
May 11, 2010 1:58 PM
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I tell you what. If you want to be one of those lucky duckies who pay zero income tax, all you have to do is donate the difference to the charity of your choice. I believe Consumers' Union qualifies. Or you can take a job with a salary in that range. Of course, that won't leave much left to pay your mortgage, your car payment, your cable bill, etc. etc. and so forth.

So stop your bitching about people who make way less than you having zero federal income tax liability.

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TouchMyMonkey
May 11, 2010 2:00 PM
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And besides, that 47% number was pulled directly from Rush Limbaugh's ass. It has no basis whatsoever in fact.

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TPA
May 11, 2010 8:39 PM
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Correct -- it is the largest Ponzi scheme ever created.

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SonicPhoenix
May 11, 2010 1:14 PM
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Social security most definitely equals tax. 6% of my gross pay comes out of my paycheck for FICA and another 1.45% for Medicare/Medicaid. On top of that, my employer has to match that, further reducing the amount of money they can pay me. All told, that's 14.9% of the money that could be going to me that goes to the government instead. That's a tax.

I'm not necessarily saying that I object to that particular tax but it's disingenuous to claim that it's not a tax.

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AnonymousCoward
May 11, 2010 1:41 PM
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Once you start collecting social security, you get every penny you paid back in the first 3 years. After that you profit.

Tax, not tax. Whatever. Think of it however you want.

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SonicPhoenix
May 11, 2010 4:57 PM
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I don't believe that's correct - do you have any numbers to support the claim that you make back everything you paid into the system in 3 years?

Go to a retirement account calculator and plug in 12% of your salary from age 30 to 65 with an 8% return. Take the resulting number that you would have at 65 and multiply by 5%. I can just about guarantee that the resulting number is way more than what Social Security would be paying.

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johnva
May 11, 2010 6:00 PM
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Social Security is supposed to be *risk free*. It's impossible to get an 8% return on investment without risk. So that's a huge difference.

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SonicPhoenix
May 12, 2010 10:41 AM
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That's entirely possible but I'm not convinced that I make back everything I put into the system within the first three years. I'm also fairly certain that putting that 12% into a 401k-like vehicle with low-risk investments would yield better than the Social Security payout. I also wouldn't consider it a no-risk investment since I'm not entirely convinced that it will exist in it's current form 35 years from now when I become eligible.

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huadpe
May 11, 2010 7:56 PM
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Still have to account for some growth, i.e. inflation. So do it at 3.5%

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jessjj347
May 11, 2010 12:40 PM
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Are you including things like Social Security, Unemployment, etc? I think they're only including Federal Income Tax, State, and Local.

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RandomHookup
May 11, 2010 2:18 PM
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Individuals generally don't pay unemployment taxes, employers do.

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johnva
May 11, 2010 2:22 PM
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Some do list how much they are paying for it on an employee pay stub, however. So some people will erroneously attribute that to the amount they are having \"deducted\".

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Polish Engineer
May 11, 2010 12:46 PM
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Well thats crap because those are taxes as well. They are funds taken from my check in order to pay for government rendered services, which I'm guessing is really close to the definition of tax.

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You Can Call Me Al(isa)
May 11, 2010 12:43 PM
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Okay, you're right. It's actually more like 17% with Federal and State taxes each paycheck.

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You Can Call Me Al(isa)
May 11, 2010 12:46 PM
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I was including social security and my parking fees that are taken out automatically.

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MichiganWolverine
May 11, 2010 12:51 PM
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Parking fees? Why would this be tax? Social security operates as a 401k which you pay into and are reimbursed when you retire. The same for medicare.

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TuxthePenguin
May 11, 2010 12:59 PM
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If you think Social Security is like a 401k, you are sorely wrong. If you make 40k a year and put 5% of your income into a traditional 401k that invests only in Treasury bonds (ie = safe) you typically earn a better return than Social Security would give you.

Throw in that Social Security is going broke and changes will be made... not a good comparison.

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You Can Call Me Al(isa)
May 11, 2010 12:53 PM
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:-) I was replying to my corrected tax rate. I was saying I was incorrect with my first estimate because I was including those things that are not taxes. I spoke too soon. Not enough caffeine for me today yet, I guess!

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Hil-fish
May 11, 2010 12:43 PM
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Also - how much of that do you get back when you file your taxes?

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You Can Call Me Al(isa)
May 11, 2010 1:40 PM
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I'm not totally sure. I've only been working at this \"real\" full time job for just over a year. When I was a college student I got back about $80/yr. When I was working/traveling overseas for a year I had to pay in. But I did get a pretty decent refund this year because I bought a new car last year.

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Brunette Bookworm
May 11, 2010 1:33 PM
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Thank you. Every one who keeps saying \"But they take 25% out of my paycheck\" better not get any refund if they are making that comment. And if you are getting 25% taken out of your paycheck and getting a big refund each year, maybe you should look at your allowances and possibly adjust your W-4.

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nbs2
May 11, 2010 1:40 PM
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How about this - even with heavy charitable contributions (roughly 15%), up until this year, we were left owing the government money. And yes, our W-4's accounted for the three of us, and nobody else. We usually owed the fed a little over $500 and the state about $100.

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johnva
May 11, 2010 2:50 PM
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That has nothing to do with anything other than your withholding being out of sync with your typical tax liability. It has very little to do with your actual tax rate. The W-4 is just an approximation of tax liability that doesn't account for all factors involved, because it's not a complete tax return. You can usually get it pretty accurate, though, because it allows you to get more withheld than the \"standard\" amount if necessary, or you can pay estimated taxes quarterly. For example, if you have significant dividend or capital gains income you often have to do that because the W-4 doesn't account for that in just the \"simple\" setup.

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Oh4Sh0
May 11, 2010 12:56 PM
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This exactly.. Just because your paying out X amount of dollars doesn't mean you're not getting it back in your refund.. and Social Security.. not 'really' considered a tax, you get some/all/more of the money back in retirement (depends on how things shake out?)

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Roy Hobbs
May 11, 2010 12:36 PM
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Don't forget that somewhere north of 45% of the population pays $0.00 in federal income taxes. So while the \"average\" tax burden is lower, the individuals that pay taxes are paying well above the \"average\" rate.

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Baccus83
May 11, 2010 1:01 PM
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This is an easy number to criticize. However, it's misleading. Yes, 47% of people don't owe income tax, but that doesn't mean they don't contribute. They still pay medicare, social security, sales tax, property tax, etc... In fact, poorer families pay much more in payroll taxes than they do federal income tax. Of course, when you're in the top percent of earners, the tax burden is reversed.

Here's a good article:

http://www.nytimes.com/2010/04/14/business/economy/14leonhardt.html?ref=todayspaper

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frank64
May 11, 2010 1:16 PM
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The medicare and SS is for specific service. They don't pay anything for federal government services.

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johnva
May 11, 2010 1:32 PM
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The problem with your argument is that you are selectively focusing on one aspect of government purely because it supports your argument of \"unfairness\". Many state and local governments, for example, are funded in large part by taxes that people who may not owe federal income tax do end up paying, such as personal property, sales, and excise taxes (and in addition, many states have income tax systems that are much \"flatter\" and less progressive than the federal system). Many of these taxes are actually regressive, so you can argue that higher income people aren't paying their fair share of those government services if you use your myopic \"focus on only one tax at a time\" approach. The only sane approach is to look at the overall tax load from all types of tax and compare. It's intellectually dishonest to just pick the one type of tax that most supports your argument and ignore all the others.

Furthermore, much of the reason why lower income people pay less income tax is that they SHOULD pay less income tax. If you consider that a certain amount of income is necessary just to pay for basic necessities, it's not good social policy to tax people on income that they need for that purpose. That's part of the idea behind a progressive income tax system: the *first* bit of income, which people need the most for basics like food, shelter, education, and healthcare is taxed at a lower rate, and that is the same for everyone. Then, if you have \"more\" money on top of those needs, it gets taxed at a higher rate. A LARGE PART of the reason that people end up not paying federal income tax is because of the child tax credit, or in other words this same basic principle that certain money that people need for necessities should not be taxed as heavily. A grad student stipend wasn't much income but I still ended up paying federal income tax because I didn't have kids, a mortgage, etc. Meanwhile, many people who make a lot more money than that don't owe taxes because the child tax credit wipes out their liability.

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littleAK
May 11, 2010 4:08 PM
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It wouldn't be very useful to rely on heavy taxes to the poor to generate government revenue, even if we could justify forcing people already on an unlivable wage to pay income tax. A really high tax percentage on, say $10,000, is still less than most of us middle class pay in taxes. The additional financial burden from the reduced take-home pay would seemingly increase the need for financial assistance, too. It would certainly make climbing out of poverty that much more difficult. This \"everybody must pay\" mentality just doesn't make much sense. It wouldn't solve any of the country's financial issues or better society.

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johnva
May 11, 2010 4:17 PM
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This is exactly the looming crisis that is facing a lot of state governments. Unlike the federal government, many states have had more \"flat\" or even regressive tax systems, overall. The problem is, that doesn't work very well in a severe recession, because a) the people most likely to lose their jobs are the ones you are most relying on for state revenue, and b) those same unemployed people are the ones who end up costing your state a lot of money simultaneously (in unemployment, Medicaid, etc). So the regressive tax strategies pursued by many states have endangered their fiscal stability. They will all have to cut services and raise taxes to compensate, when that could have been largely avoided had the states not been so eager to give large tax cuts to upper income people.

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mythago
May 11, 2010 2:02 PM
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Oh, there you go hating on rich people, who we know must be hard-working, deserving and moral because they're rich.

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Putts
May 11, 2010 12:58 PM
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Gotta spread the wealth. Tax those that are successful to pay for those that aren't. God forbid we allow somebody to be rewarded for hard work and innovation in this country.

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ARP
May 11, 2010 2:59 PM
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I didn't realize that Paris Hilton worked as hard as she did to inherit those millions.

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Brunette Bookworm
May 11, 2010 1:38 PM
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So you are fine with the disabled starving? There are many people in this country who would like to work and don't have the physical or mental ability to do so through no fault of their own. Some of them do work but can't find jobs that they are able to do and still earn a living wage. Are you denying them basic needs such as food and shelter just because they aren't as \"successful\" as you? Are you Scott Baio?

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Baccus83
May 11, 2010 1:07 PM
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You're still wealthier and more successful. Isn't that reward enough?

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Putts
May 11, 2010 1:21 PM
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Also, relativism is a dangerous mindset to have. If you were the only student in your class who ever did homework and studied for tests, and aced everything, would you be happy to get a \"C\" if everybody else in the class got a \"D\"?

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johnva
May 11, 2010 1:51 PM
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Yes, because the relative difference is more important than the absolute label you affix to it.

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Putts
May 11, 2010 1:19 PM
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If I work 40 hours a week, I should be paid for 40 hours' worth of work. I should not be paid for 30 hours of work while the government gets paid for the other 10 hours to redistribute that money as they see fit, including to those that choose to work 0 hours per week.

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Anonymously
May 11, 2010 4:07 PM
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The government dispenses a lot of that in the form of bombs and bullets into our enemies.

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Brunette Bookworm
May 11, 2010 1:50 PM
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You realize that most of the taxes you pay go to defense spending, right? 1% goes to social programs, 17% to healthcare that ranges from Medicaid to the CDC, another 11% goes to helping poverty. 33% is spent on the military and 26% is going to the TARP fund. Complain about TARP if you want to complain about people not doing their job and getting money.

http://www.fcnl.org/budget/Taxes09coin_chart.pdf

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mythago
May 11, 2010 1:05 PM
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Yes, because the tax on hard-working innovative people is 110%!

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BettyCrocker
May 11, 2010 12:37 PM
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I too pay about 25% in income taxes. Could it be that those that can afford to hire experts are able to avoid much of the taxes that others end up paying? i.e. they only pay 6% of their income and it all averages out.

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dolemite
May 11, 2010 12:40 PM
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I've wondered about this since the Tea Party came out. Taxes are really low now, yet they complain about Obama raising taxes. I agree taxes will have to be raised eventually, unless maybe the government decides to legalize pot and tax that instead, while also saving billions wasted on the 'war on drugs', and continued incarceration of users.

Of course we'd save a ton of money if we weren't trying to police the world 7,000 miles away as well...

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paulthegeek
May 11, 2010 12:44 PM
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Actually, Obama lowered taxes for over 90% of taxpayers. Look it up. It was in the stimulus bill.

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You Can Call Me Al(isa)
May 11, 2010 1:12 PM
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That was really nice of him. I got 4 extra dollars per bi-weekly paycheck in 2009. I thought the stimulus bill was supposed to stimulate the economy. That $4 did not encourage me to spend more at all. And in 2010, that extra $4 is gone anyway. Super sweet tax cut I'd say.

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johnva
May 11, 2010 2:05 PM
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My wife and I, and millions of other people, got an $800 tax credit courtesy of Obama. I want to ask the Teabaggers how they like their Obama tax cuts. That's not an insignificant amount of money.

Also, Obama originally wanted to spend more of that stimulus money on infrastructure and stuff rather than tax cuts. So if you think that small tax cuts are a poor way to stimulate the economy, perhaps you should complain to your Republican representatives about that. After all, they are the ones that pushed to have some of that spending shifted to tax cuts by arguing the exact opposite of what you're saying (they claimed that tax cuts were the best stimulus, despite evidence to the contrary). Obama agreed in order to get support for something the country desperately needed and that Republicans were roadblocking.

Are you just ignorant of these facts, or are you selectively ignoring them?

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barty
May 13, 2010 1:17 AM
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Now the Fascist Democrat Party is threatening us with cap and tax, and a VAT. Plus, they're allowing the tax cut from the past decade to expire.

The piddly amount the stimulus plan graciously allowed me to keep every paycheck pales in comparison to the proposals out there to increase taxes on sources other than income.

So I say, enjoy your $800 check (my monthly rent is more than that!) while the government takes that money away from you elsewhere.

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You Can Call Me Al(isa)
May 11, 2010 2:35 PM
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Honestly, until recently, I was among the \"ignorant masses\" of this country. I'll go ahead and say I didn't pay much attention to the government as a college student or when I was backpacking Down Under for a year after I graduated. I welcome all information as I am becoming more involved and informed about the government.
My comment should have been directed as a criticism of the tax cuts, instead.

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johnva
May 11, 2010 2:42 PM
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If you genuinely want to inform yourself, look into the historical context and the things that happened 5, 10, 20, 50 years ago. Politicians rely on people having short memories about what they did in the past. Pay attention, and it's harder for them to scam you.

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cbutler
May 11, 2010 2:12 PM
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Yea? Well he lowered my raise :(

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johnva
May 11, 2010 2:26 PM
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Are you in the military? I've heard a number of people referring to the fact that military bonuses and such were reduced (although if it's \"bonus\" pay, doesn't that imply that it's something used as a temporary incentive for recruiting, etc)? Personally, I'd prefer that they just cut some bloated weapons systems or something rather than that, but I understand why they do it.

If you're just talking about your marginal tax rate being higher because you made more money, well, you're still making more money. And that's not caused by Obama.

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Waiting for the next Ren Fest
May 11, 2010 12:40 PM
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Stupid question. No, I have not RTFA.

Does this take the economy into account? With more people out of work and many people with reduced salaries, they were dropped into lower tax brackets. I know I was.

So, yes, I am paying less taxes. However, my total income was down so I am in a lower bracket. I would rather be paying more taxes (ASSUMING NO OTHER CHANGES IN THE TAX LAWS) with a higher income than lower taxes with significantly lower income.

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mythago
May 11, 2010 12:51 PM
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Wouldn't we all. But the point of the article is that the Teaper OMG OBAMA TAXES U ignores the fact that taxes are pretty low. Of course, they also ignore the fact that original Boston Tea Party was a) about taxation without representation and b) was the destruction of private property as a political statement. Facts are not really their strong suit.

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dush
May 11, 2010 12:41 PM
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Yeah but what's the actual amount? Give me dollar figures not rates and percentages. Are we actually paying less money in taxes, adjusted for inflation?? Doubtful.

And 9.2%? Where do they get this figure? With all fed/state/local government taxes and fees on everything added up I pay about 28%. I wish I only paid 9.2%!

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MichiganWolverine
May 11, 2010 12:54 PM
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\"Federal, state and local taxes — including income, property, sales and other taxes — consumed 9.2% of all personal income in 2009, the lowest rate since 1950, the Bureau of Economic Analysis reports. That rate is far below the historic average of 12% for the last half-century. The overall tax burden hit bottom in December at 8.8.% of income before rising slightly in the first three months of 2010.\"

If you are above the average good for you. It is unlikely that many people will be EXACTLY the average. If you pay a larger per cent it means you make more than the average person.

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kb01
May 11, 2010 1:07 PM
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The 9.2% figure is just hard to believe.

I've never lived anywhere with a combination of local, county and state taxes were below 10% combined.

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johnva
May 11, 2010 3:23 PM
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It's not at all hard to believe when you understand what it's actually saying.

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tz
May 11, 2010 12:42 PM
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When you don't have a job, i.e. \"income\", you don't usually pay income tax or FICA.

So tell those living in the refrigerator boxes under the bridge how wonderful their low tax rate is.

Meanwhile the banksters complain how terrible it is to pay the amount they do on the millions of dollars of bonuses made possible by the guy in the refrigerator box.

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Elcheecho
May 11, 2010 12:57 PM
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read the quote above, \"consumed 9.2% of all personal income in 2009.\" in other words, if you're living in a box, you're not in the 9.2 or the 100 part of that figure.

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mojomarc
May 11, 2010 1:24 PM
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I believe government transfer payments do count as income. Assuming that's true, what this ratio shows us is more an indication of how many people are unemployed compared to the wage-earners rather than what the real effective tax burden is on those wage earners.

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jeffjohnvol
May 11, 2010 12:42 PM
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Record unemployment = lower taxes. Who would have figured.

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MichiganWolverine
May 11, 2010 12:56 PM
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Really? Record unemployment? Are you sure about this? Provide data to back up this lie.

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dolemite
May 11, 2010 1:31 PM
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My guess: \"Glenn Beck says while unemployment is 10%, there are another 25% of people that have given up and moved to Alaska, so I know it's true.\"

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jsl4980
May 11, 2010 12:43 PM
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\"The money we borrow is going to be paid back through taxation in the future,\"

That's exactly right... our country's debt is growing at crazy rates. That debt will all have to be paid back at some point in the future. If we do not start cutting the deficits now taxes will have to raise just to pay off the interest on this debt. It's not sustainable.

I don't know how your site can explain to individuals that borrowing too much money is a bad thing, but you don't understand that it's bad when a country does it.

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Nytmare
May 11, 2010 1:26 PM
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Nobody wants a high debt or a high deficit. My understanding is that the past two year's higher deficits are temporary, due entirely to the recession caused by the credit and housing crisis. At least we sure hope it's temporary.

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johnva
May 11, 2010 2:17 PM
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George W. Bush and Congressional Republicans during the early 2000's apparently did want higher deficits and debt. Otherwise, they wouldn't have cut taxes drastically while actually dramatically increasing spending (unpaid-for optional war, unpaid-for Medicare prescription drug benefit, large increases in non-war defense spending, large increases in OTHER domestic spending...). It was very predictable that all of these things would add up to a huge increase in deficits and debt, and then a massive recession topped it off (partially caused by lack of regulatory oversight and enforcement in the financial industry).

So basically, the Republican argument is \"yeah, we massively increased the deficit and debt last time we were in control, but vote for us because we won't do it again (wink wink)\". Their claims are fundamentally flawed and dishonest.

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kabamm
May 11, 2010 4:38 PM
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Reagan, Bush I and their ilk did the same thing. Based on experience, I can't ever again believe a single word uttered by a Republican politican.

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johnva
May 11, 2010 4:50 PM
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I actually used to find some of their economic arguments appealing...back when I was an ignorant junior high school kid. Then as I learned more and more about the actual reality of how Republicans behave in elected office I realized that their rhetoric was totally disconnected from their actions, to the point that they were often doing the exact opposite of what they say. I now realize that hypocrisy is at the very heart of the modern Republican Party: if they talk about fiscal responsibility, you know for sure that they intend to cut taxes and spend recklessly.

The Democrats aren't always better, and Obama certainly hasn't lived up to all of his campaign rhetoric, but then again I didn't expect him to be perfect. He generally does at least say honestly what he intends to do, even if he doesn't always successfully follow through or go as far as I would like him to. The Republicans now don't even have any policies they support other than tax cuts, corporatism, and shallow sloganeering.

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kb01
May 11, 2010 1:10 PM
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If anyone is having trouble planning for their retirement and can't decide how to allocate money between their Roth and 401k, it's important to remember that taxes will eventually go up. You could very well be deferring taxes to a time when they are significantly higher than they are now.

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dolemite
May 11, 2010 3:54 PM
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I think it's wise to invest in your 401k and a Roth. That way you have options of how/when you withdraw.

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johnva
May 11, 2010 1:54 PM
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A Roth IRA also has a higher effective contribution limit because it's after-tax money rather than before-tax. $5000 after tax is more than $5000 before tax.

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TuxthePenguin
May 11, 2010 12:43 PM
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I'm sorry, but I seriously doubt that this is accurate. It is ABSURDLY low. Heck, even 12% seems low. I'd like to have a good, long look at their data. They count EITC and \"refundable\" tax credits as \"negative taxes\" in the tax calculation. That's the only way it can make sense.

Think about it - on a federal tax bracket, you start out at 10% on your first dollar after 10k. (Even the poorest person gets the personal exemption and standard deduction - lets just round up to $10k.) Now, assuming that ONLY federal income taxes make up this 12%, that means the average American needs to make $48k.

Okay, we're still reasonable with their number. But now lets start adding other taxes. First there is the payroll tax for Social Security and Medicare (6.2% of income and 1.45% of income, respectfully, no exemptions) and to hit that 12% tax level a single person would have to ear $17,773.94. To put it hourly, at full time 40-hour week, that's $8.55 an hour.

I call BS on this. I haven't even gotten outside of FEDERAL taxes.

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johnva
May 11, 2010 3:12 PM
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Why wouldn't they include \"negative taxes\" in a calculation of total tax burden? If you're getting more money back than you paid in thanks to the EITC and/or child tax credit or whatever, then that's reducing your total tax liability paid across all different types of tax. So the \"negative tax\" is offsetting part of their Social Security, local sales taxes, etc. Makes perfect sense to me, since what the article is talking about is TOTAL tax liability, not just federal income tax.

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BigDave
May 11, 2010 1:14 PM
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Don't forget to include your tax return! After I deduct the other various taxes I pay [car, property, even sales tax] the actual taxes I pay are often in the teens %. And I'm in one of the higher brackets!

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TuxthePenguin
May 11, 2010 1:27 PM
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I didn't include that because even that won't make a difference - at least in the direction you're talking about.

You get a deduction on your taxes, not a credit, for most items. That means you had to pay something to get that deduction. In effect, you're getting a small portion of that back - you pay $1 to get $0.10 back, for example.

So that wouldn't actually lower your tax burden. It would raise it if they were included.

And, to be brutally honest, I'm trying to keep the calculation as simple as possible. I still call BS on this.

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TuxthePenguin
May 11, 2010 12:56 PM
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I saw above that some are saying that Medicare and Social Security are not taxes. So lets work at this backwards. The median income for the American family is typically quoted around $40k. Since I was using the single tables, lets half that (2 earners) and say the typical American earns $20k.

That means, in all, their taxes from every source would need to be $1840. Federal income taxes alone are $1,082.50 (5.4% of income), so that means all other sources outside of Federal income taxes would need to be below $757.50. I just don't see that happening when you consider every place that you pay a tax (your phone, electricity, gas, etc)...

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kb01
May 11, 2010 1:12 PM
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I thought the same thing -- I've never lived anywhere where I paid less than 10% in local, county and state taxes.

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wjamny
May 11, 2010 12:44 PM
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not me, not here in NY, unless of course you're not paying any taxes. This is the average for the US, don't try and sell this as we're not \"taxed enough already\". I'm also guessing this doesn't include all the wonderful fees we get slamed with, like the extra $50 to register your vehicle which goes to the MTA (I guess my train fare and toll charges aren't enough), or the new license plates we are required to pay for. Please, this is a sham to those of us that are working hard and see an increasing tax and fee burden every year from all levels of government. But, hey, I guess if you don't pay into the system you not only get all of the benefits you also get to bring down the average so it looks like the rest of us don't pay enough - thanks!

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Polish Engineer
May 11, 2010 12:55 PM
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I'm also calling shenanigans. Owning a vehicle has tons of taxes outside of property including registration, licensing, emissions inspections, safety inspections.

Lets not forget all the FCC taxes at the end of our cellphone and internet bills.

Were tolling revenues from interstates included?

Sounds to me like an oversimplified picture of a highly complex revenue system that no one truly understands.

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ARP
May 11, 2010 3:16 PM
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Yes, which goes to show that everytime Republicans say \"cut taxes\" in response to every problem, they're only talking about cutting income taxes. What really happens is that utilities, local government, statement government, etc. end up adding fees, taxes, surcharges, etc. to make up for that lost revenue.

So, you're not paying less taxes, they're just spread out more so you don't notice. The thing is that those fees are often flat, so the poor people pay as much as the rich. If they did away with all those fees and simply increased the tax rate, the burden would be better placed on those who can better afford it, the wealthy.

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johnva
May 11, 2010 3:26 PM
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Pretty much nailed it right there. Cue the coming teabagger outrage when all the state governments jack up taxes as the stimulus money dries up. Oh, wait - they support state governments doing whatever they want, right? I can never keep their nonsensical arguments straight.

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Mecharine
May 11, 2010 12:50 PM
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I work pretty damn hard, I still have tons of money left over after taxes and fees. In 3 years of graduating (with debt), Ive got 30k in savings, 15k in checking and another 20k in stocks and 401k. Its called managing your life, which also means that you can suck your pride in when renting a room from your parents is half as cheap as renting an apartment.

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mythago
May 11, 2010 8:03 PM
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So, sponge off your parents? Definitely the self-sufficient way!

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jtheletter
May 11, 2010 1:13 PM
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Ah yes, the just out of college mindset: I can do this with all my energy and free time and fewer responsibilities so why can't everyone else forever?

I'm here to tell you that it changes friend, your responsibilities at work grow, you can't live with your parents forever, and eventually you'll likely have a house and family of your own to maintain. The energy, the free time, and the extra income get chiseled away at until you wonder where it all went.

Point is, enjoy the good times, keep saving like you are, but don't expect that it will always be this easy. ;)

Now back on topic - collectively we may be at the lowest rate in generations, but I have a feeling that the majority of people paying into that statistic are getting squeezed more than they ever have before. More people above taking more of the income up front (executive pay rates at historical highs beyond reason), and more people below not paying any taxes (and/or also consuming tax dollars).

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alSeen
May 11, 2010 12:46 PM
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Consumerist really hates the Tea Party, doesn't it.

Someone should explain to you what \"average\" means. Over 45% of wage earners paying nothing in income taxes. Think maybe the 9% number is being affected by that?

I'm in that 45%. Even I think it's wrong that we have a structure where almost half of the people contribute nothing to income tax revenue.

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johnva
May 11, 2010 6:01 PM
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It's not so much the \"Tea Party\" that's the problem as it is corporate-funded astroturf groups like FreedomWorks. Consumerist rightfully has a problem with that sort of group.

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trentblase
May 11, 2010 2:01 PM
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If you don't think it's right that you pay no income tax, feel free to contribute at any time at https://www.pay.gov/paygov/forms/formInstance.html?agencyFormId=23779454

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edosan
May 11, 2010 1:28 PM
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I know enough about math to know that of the average today is 9% and the historical average was 12%, that the average went down.

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MichiganWolverine
May 11, 2010 1:00 PM
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Why do you think that is wrong? If you went back to 1950's do you know what the top tax bracket was? NINETY PER CENT. What was the differential in pay between the top and the bottom? The problem is people wanted the interstate highway system, national parks, airports, bridges, and they were built. The problem is nobody remembered the future and needing to replace these items. I have no problem with a 50% marginal tax rate on those making over $250k per year, and zero for those making under $50k

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alSeen
May 11, 2010 1:18 PM
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Yes, I know those figures. I understand our tax system quite well. That's what a Masters in Accounting will do for you.

The issue I have with it is that when people get something for nothing, they have no incentive to keep costs down.

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TuxthePenguin
May 11, 2010 1:12 PM
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Okay, so answer an easy question - when looking at the combined tax burden - what is the highest percentage a person should be forced to hand over? 60%? 70%?

You do realize that you need to balance the progressiveness of the tax code with the disincentive it creates to not produce another dollar, right? If you tax each additional dollar over $X at 90%, you're going to see that very, very few people earn more than $X. You have people move investments or work around it in other ways. Or they simply stop producing.

The easiest way to balance those two goals? Drop all income taxes. Institute a national sales tax and give every American a rebate each month based on how much \"income\" you want free. Now, we'd need to figure a way to make people whole for double taxation on savings (it was taxed when you saved, now it'll be taxed again) but that's a lot easier than trying to navigate through the Tax Code.

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ARP
May 11, 2010 3:25 PM
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You're so right. If my boss came to me and said, I want to give you a raise and promotion, I'd tell him, \"no thanks, those extra dollars will be taxed at a higher tax rate. I'll stay in my current position\" I'm sure most people would turn it down.

/snark

I keep hearing that argument, and I simply don't buy it. Are you saying from the 1920's to 1984, we floundered because nobody wanted to work because we had more progressive tax rates?

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consumerfan
May 11, 2010 5:29 PM
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No, the correct analogy would be if your boss offered you a promotion, entailing a raise but implicitly with longer unpaid hours.

You calculate that your marginal pay rate would therefore be reduced as a result of taking the promotion. So you take the third option - take the promotion and start looking for other work.

There comes a point when you value your time over the extra pay. If you tax at 90% (marginal rate), companies will be able to pay fewer employees to work longer hours.

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Orv
May 11, 2010 2:01 PM
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Yup, that's why no one ever got wealthy in the 1950s, when the top tax bracket was 90%. In fact, the economy totally collapsed, and we look back on that decade as one of our worst ever.

Oh, wait.

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Fantoche_de_Chaussette
May 11, 2010 12:58 PM
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Every wage earner pays the 7.5% social security \"tax\". Every wage earner pays the 3% Medicare tax. Every wage earner pays sales tax (which are a disproportionately higher fraction of income for the poor). Isn´t that \"Taxed Enough Already\" for folks at the bottom of the wage scale?

Also, keep in mind that, in America, the top 50% of Americans have 97.5% of the wealth.

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Megalomania
May 11, 2010 1:19 PM
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....except the monies for entitlement programs are separate from the tax pool. Social security money is in an account that is \"loaned\" to the government with interest, so anything the 45% of people not paying taxes contribute through social security will have to come back out... at the expense of the people who do pay taxes.

That said, the 47% number most likely includes dependents, and that's just stupid.

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Putts
May 11, 2010 1:15 PM
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Social Security and Medicare do not count. That's money that they will be (hopefully) getting back at some point in their lives. Whereas income tax goes to fund society as a whole. Social Security and Medicare do not pay for highways, education, national defense, or any number of other things that everybody benefits from but not everybody pays for.

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johnva
May 11, 2010 2:30 PM
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Social Security and Medicare most certainly DO count. They are not savings programs, AT ALL. They are pay-as-you-go spending programs. Current workers pay for current retirees. Future workers will pay for future retirees. They don't have an account with your name on it sitting there. It's just another tax. The only difference is that it's a tax earmarked for a specific spending program rather than the general fund.

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Anonymously
May 11, 2010 4:15 PM
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But if you try to take away Social Security or Medicare, the elderly members of the Tea Party will have a conniption fit. So those things don't count because *some* Tea Party members aren't against them.

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johnva
May 11, 2010 4:24 PM
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What most of the whining really boils down to is that people don't want to pay taxes for things they are against. They support SS, Medicare, and defense spending, so that's okay. They don't support spending on some other things, so it's tyranny to tax them for that.

I wish I'd have been asked whether I wanted my tax dollars to go to the war in Iraq. But it doesn't work like that.

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frank64
May 11, 2010 12:47 PM
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It makes some sense. About half now a days don't pay any federal tax, and there was the reduction in the upper levels. Our taxes have always been lower than much of Europe and Canada because they have many social programs and protections, which all have a cost.

Theoretically the more affluent a country is the lower the tax base should be. The services required would be less for a reduced poor and the roads, infrastructure costs shouldn't be proportionally higher. However with more affluence comes more demands, and thus when the affluence goes down we still want the services. It makes for problems when a country's economy takes a dive, and that is happening in much of the world.

With our rising national debt we are going to have to make some tough decisions soon. Raising taxes is going to need to be part of it. Having our entitlements equal those of Europe sounds great, but it has many negatives. I hope we can balance it out properly, but we don't seem very good at it.

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YarpVark
May 11, 2010 12:48 PM
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Bad articles are bad.

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soldstatic
May 11, 2010 12:56 PM
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yea thing is we just switched from general conservatives in office to this... crap. we may be at the lowest in 50 years and we may have had a phenomenal economy (before the latest housing thing) but guess what we won't have in the future? The lowest taxes and a phenomenal economy.

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lawnmowerdeth
May 11, 2010 12:58 PM
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Well, I l know I'm not paying less taxes. Stop trying to feed me this garbage.

Yes, average taxes paid is down because people are making less money. That's not a good thing.

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johnva
May 11, 2010 2:19 PM
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Tax rates were cut. If you're paying more, it's because you are also bringing more home.

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MichiganWolverine
May 11, 2010 1:01 PM
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That means you are making more money. Glad you are so bitter about that.

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Jeff M
May 11, 2010 1:05 PM
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I really hate these articles that don't cite any sources. It says that they got their numbers from the Bureau of Economic Analysis, but which report specifically? Now I have to sift through hundreds of BEA reports to figure out how they fudged the numbers.

Seriously, this is the internet, how hard is it to add one hyperlink to your source USA Today?

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leprechaunshawn
May 11, 2010 1:06 PM
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I wish I was one of those people whose taxes were only 9% of their income. Uncle Sam's getting his greedy little paws on closer to 19% of my income.

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theyoungandthebetrayed
May 11, 2010 1:10 PM
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Ah statistics... I love how you appear to be saying something useful when you're not saying anything useful at all.

On a semi-related note, when the income tax was begun in 1913 only the top 10% of earners paid anything at all, and most paid 1%. Only the top 1% of incomes were subject to anything over 1% (source: Politifact).

Pointing out that 9.2% is less than 12% really says nothing as it includes local sales and property taxes. Those are way down but not because of any benevolent gesture by our dear leaders.

I'm not a tea partier and fall in the 45% that don't pay income taxes, but I never pass up a chance to look critically at a quoted statistic.

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The_Fuzz_53
May 11, 2010 1:22 PM
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People started saving 5% of their money from 0 and look what happened? The world almost tanked. They're not paying taxes and have to spend everything. Maybe companies should start paying people more instead of have all of their compensation go to the few top people.

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AuntieMaim
May 11, 2010 3:19 PM
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I totally agree -- I think this is part of people's frustration with tax rates. The buying power of the middle and working classes has been decreasing over the past decades as their incomes fail to keep pace with inflation, while top earners earn more and more. The middle and lower classes aren't doing as well as they used to, and they're looking at those withholdings on their paycheck and saying, \"We'd be OK if we could spend that money.\" The bigger problem, in my opinion, is the massive income disparity and failure of lower pay brackets to keep pace with inflation. That's what pisses me off, not the tax rates.

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johnva
May 11, 2010 3:38 PM
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And not even just general inflation: some expenses, such as housing, higher education, and healthcare, have recently gone up far FASTER than the rate of inflation. So those things are quickly becoming unaffordable luxuries for too many people, and much of this is because we have a lot of rich people who would rather play games with those things than actually build a solid middle class. Housing is seen as an asset that bankers and investors can get rich by speculating on; healthcare is a nice cash cow for all kinds of people (providers, insurers, pharma companies, etc); higher education is often not run for the financial benefit of the students, etc.

People are getting squeezed from both ends. Their real income has been declining, while their big life expenses are exploding. Government needs to reinvest in the middle class and work on some of these systemic factors. I don't think Obama is going far enough in doing that, but at least he's not actively on the side of the people trying to make it worse like virtually all Republicans are.

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ARP
May 11, 2010 1:23 PM
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There are a number of articles out there on Ireland, who has very low business and income taxes. Guess what? They're not doing so well and they're part of the acronym PIGS

http://www.npr.org/templates/story/story.php?storyId=126614692

Of course, the Heritage Foundation touts it as one of the \"free-est\" economies.

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RandomHookup
May 11, 2010 2:33 PM
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Actually, the \"I\" most talked about in PIGS is Italy.

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Just_A_Guy
May 11, 2010 1:23 PM
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So how are we paying to keep bridges up? Oh wait...we've already had one fall down here in MN...

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Al Rognlie
May 11, 2010 1:24 PM
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Ah, USA Today, the bastion of economic wisdom...

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nova3930
May 11, 2010 1:26 PM
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Yay for counting all the people that don't really pay any income or property taxes in the averages. Now for those of us who actually pay in, its a lot harder, ie those of us who actually work for a living are carrying an awful lot of people along with us.

I kept track of every single tax I paid last year in Quicken. Its a really easy thing to do. Between federal and state income tax, SS, medicare, excise taxes, property taxes, vehicle taxes, telephone taxes, sales taxes, fuel taxes, etc etc etc fully half my income went to the gov't is some way shape or form.

God only knows how much went in the form of hidden taxes where business passes along their tax burden to me. Probably more like 75%--80%

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johnva
May 11, 2010 3:40 PM
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Count yourself lucky for being so well off.

Now realize that most people who don't owe federal income taxes DO \"work for a living\".

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Josh
May 11, 2010 1:28 PM
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Posts like these, with their snarky political commentary, are exactly why I didn't contribute to the Consumerist beg-a-thon, despite the good work that Consumerist has done in saving me money.

If you don't want to alienate a good portion of your readers, don't turn this site into a partisan political blog.

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mpaquette
May 11, 2010 5:04 PM
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Agreed. And I thought I was the only one who felt this way.

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theyoungandthebetrayed
May 11, 2010 1:42 PM
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Agreed. Consumerist used to be all about voting-with-your-wallet. More and more it's about voting-with-the-liberals.

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Duke_Newcombe sez íViva la Revolucion de Chihuahua!
May 11, 2010 1:29 PM
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Damn you, Consumerist, what , with your bothersome...y'know...FACTS and stuff.

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TuxthePenguin
May 11, 2010 1:40 PM
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Go look at my post. I broke it down using just the generic standard deduction and personal exemption. They cannot be including Medicaire and Social Security payroll taxes but then also including refundable tax credits that create refunds in excess of taxes withheld. They have to be including that to get this number so low.

Not to mention other taxes. Its BS.

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AustinTXProgrammer
May 11, 2010 1:31 PM
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I can reliably estimate my final tax burden (state, local, federal, fica) to be about 19%. I am not in a very high tax bracket because my wife doesn't work. The only way those number can be so low is if we have a lot of people too poor to pay taxes.

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johnva
May 11, 2010 3:46 PM
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Uh, we do have a lot of people too poor to pay taxes (or who qualify for many gigantic exemptions from tax, such as the child tax credit).

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AnonymousCoward
May 11, 2010 1:54 PM
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Like the fact that, mostly because of the EITC and child tax credits, 47% of the population doesn't pay any federal income tax? Fully half the country not paying any income tax would indeed drive the average down.

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kylere1
May 11, 2010 1:34 PM
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Actually 60 years ago families got by with one income, now they have two. I really love how numbers can be twisted to support any point of view and rarely are presented accurately.

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GirlCat
May 11, 2010 1:40 PM
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The article doesn't say that the average tax rate is 9.2%; it says that federal, state and local taxes paid accounted for 9.2% of total personal income from everyone. In fact, the writer goes on to say this: \"Individual tax rates vary widely based on how much a taxpayer earns, where the person lives and other factors.\" Maybe if we paid more taxes, this country could afford more adult literacy programs.

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Hadoken33
May 11, 2010 1:42 PM
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I'm just sick of paying into the largest Ponzi scheme in the world, Social Security. Why should I pay 6.2% of my paycheck to pay for the previous generation's social security when I know for a fact the fund is going to be dry when it's my turn to collect? Not my fault the government set up a flawed social security system and refuses to address the fact that it needs to be changed.

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psyonn
May 11, 2010 1:53 PM
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Yes, the tax rate is low; but fees are something like 8,000% higher than in 1950

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Javin
May 11, 2010 1:56 PM
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How can anyone possibly swallow this? I'm middle-class, and fully 50% of my income went to taxes. 35% comes straight out of my paycheck, another 5% goes to property (house/car) and sales tax is anywhere from 7-18% depending on where you are.

And the taxes only increase in percentage as you make more money!

Where in the hell are they getting this made-up 9.2% number from? I'm calling shenanigans.

Maybe we're complaining about paying too much taxes because they keep telling OTHER people they don't have to pay ANYTHING and then taking it out of MY paycheck?

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thewritejerry
May 11, 2010 1:58 PM
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Source - The Bureau of Economic Analysis, which is in the Commerce Department, which is appointed by the current administration.

I can make statistics dance to my tune too.

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dmcindc
May 11, 2010 2:01 PM
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HUH? My fed taxes alone were 17%, not including state, local, and FICA taxes. And how about all the sales and sin taxes now? I have no idea where they get that 9.2% figure. It's not at all the reality of what people pay in taxes.

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Bargaineering.com
May 11, 2010 2:01 PM
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Get those facts out of here! We don't need facts, we need ACTION.

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stevgex
May 11, 2010 2:08 PM
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I recently decided to try to add up my total tax bite on an annual basis. I figured in not just state and federal income tax but also, sales tax, property tax, phone and utility taxes,property taxes and gas taxes. I also included Social Security and Medicare withholding since it is still money that is taken without my consent. And I don't expect either will be still be around when I retire. On my average income of 70-80k a year. The bite comes in just shy of 51%. This of course doesn't include the hidden tax that is built into the cost of any goods or services you consume. Businesses build their tax burden into the prices they charge.

Since the study averages everybody, it also includes the forty-something percent of wage earners that do not pay any income taxes. That alone is going to skew their results much lower.

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Ipse
May 11, 2010 2:12 PM
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\"You realize that most of the taxes you pay go to defense spending, right...\"

This is just wrong. SS is the largest outlay in the 2010 budget. All of the numbers are at the CBO website.

And this study seems highly suspicious. Who here is paying 9%?

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Brunette Bookworm
May 11, 2010 4:06 PM
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It depends on how you look at defense spending I suppose. I don't think that chart on the first page of the CBO's site includes all aspects of military spending. Does the category of defense cover all the retirement and healthcare of veterans? Does that include Homeland Security or the FBI? I don't think it includes weapons research and production as that falls under the Dept. of Energy. All of that, to me, is part of defense spending. Just because it isn't directly related to the military happenings right now doesn't mean it isn't related to defense.

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Coupon
May 11, 2010 2:38 PM
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It's very clear they didn't take any stats from people living in North Carolina.

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SuperSnackTime
May 11, 2010 2:56 PM
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My preference order for general fiscal responsibility:

(1) Tax MORE, Spend LESS... and actually pay down the national debt.
No, seriously, I'm willing to take a kick in my teeth to give a better shot to future generations. Really. I know I'm the only one :-/

(2) Tax LESS, Spend LESS. You know, actually complete the sentence. Instead of \"We need to cut taxes!\" Finish that with \"... and decrease our spending accordingly.\"

(3) Tax MORE, Spend MORE. If you're gonna go all nut balls with federal spending, at least have the kindness to rape us up front so we can actually pay for it.

(4) Tax LESS, Spend MORE. You know, the current model. The one where we all bat each other on the back about how good we have it right now, but don't get all fussy over the gun we're putting in our kids' mouths.

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Anonymously
May 11, 2010 4:26 PM
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About #1: People aren't even willing to be taxed more to help the current generation. Maybe if you rephrased it \"not having Uncle Sam enslaved by China\" you might garner more sympathy.

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SuperSnackTime
May 12, 2010 11:59 AM
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haha, you're probably right... but I''m just me, I'm not trying to politic my politics on anyone ;-)

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visualplastik
May 11, 2010 3:28 PM
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Credibility lost at \"organizes Tea Part groups.\"

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Winfield
May 11, 2010 3:32 PM
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A 9% average is truly disheartening, because that means that those of us paying 25-30% of our income in taxes are carrying a lot of dead weight.

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johnva
May 11, 2010 3:56 PM
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No, it just means that you make more money than a lot of people in this country are right now. Making more money doesn't make you better or more hard-working.

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johnva
May 11, 2010 3:58 PM
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Arrg, comments puked on me there.

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johnva
May 11, 2010 3:55 PM
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No, it just means that you're more fortunate than a lot of people in this country are right now.

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GirlCat
May 11, 2010 3:44 PM
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OMG, do I have to explain this AGAIN? The article states that out of ALL the personal income earned by EVERYONE in the country, 9.2% of that WHOLE BIG AMOUNT was paid to federal, state and local governments in taxes. This DOES NOT mean that the average tax rate is 9.2%. Nowhere in the article does it state this. The average tax rate is much higher given that 45% of people don't earn enough to pay taxes (and a huge chunk of this group is the elderly). Will you people please learn to read before you start with the ignorant anti-taxation rants?

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TuxthePenguin
May 11, 2010 4:24 PM
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You really are willing to play games, aren't you?

If total taxes paid as a portion to total income is 9.2%, that means the average tax rate is 9.2%. There is no other way to get around that. They are saying \"federal, state and local\" in an attempt to include all taxes.

Remember - there are only very few sources of income in the United States that are not subject to the federal income tax. That's why that's the first source that makes you yell BS at this number.

Looking at other sources of data (Treasury statements, GDP, etc) I think this is somehow derived from the total tax income in the nation versus the IRS income as reported via tax documents. But I can't find the actual study... has anyone?

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johnva
May 11, 2010 4:01 PM
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Most people are apparently incapable or unwilling to actually think about what the numbers are saying instead of just jumping to \"OMG I PAY MORE THAN THAT! LIFE IS UNFAIR!\".

Says a lot about why the GOP's approach of appealing to knee-jerk reactions with policy statements a millimeter deep is successful in this country.

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johnva
May 11, 2010 4:05 PM
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Another factor that could be playing into the 9.2% average is the high amount of income some people are making from dividends, interest, and capital gains. That gets taxed at a much lower level than earned income, and accounts for a large percentage of the income of the richest people in America. Since the richest are only paying 15% or whatever, and are making an ever-increasing percentage of the total income in the U.S., they would be affecting the aggregate rate more and more all the time. Factor in that, and the people who aren't paying income tax due to unemployment and/or EITC/child tax credits/etc, and it's easy to see how we could get to 9.2%.

I'm not sure from this article whether they are including that in \"personal income\" or not, though.

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GirlCat
May 11, 2010 4:32 PM
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The point of the 9.2% figure is that, as a whole, Americans are paying a smaller percentage of total personal income toward taxes than we used to. This is because of tax cuts/loopholes to the very high earners, which lowers the total dollar amount that's paid. So if the overall dollar amount is reduced because the very rich are getting tax breaks and the number of people paying is reduced because the elderly and working poor aren't paying, this results in the middle class paying higher average rates at the same time that the actual total percentage of income tax paid is declining.

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Baelzar
May 11, 2010 4:18 PM
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Assuming this is even accurate, it's like taking a snapshot of a guy falling off a building.

\"See, he's fine right here!\"

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El_Fez
May 11, 2010 4:43 PM
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Of course I'm paying less tax! I'm unemployed - it's impossible to tax Zero!

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MountainCop
May 11, 2010 4:57 PM
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9.2% of income? What? My tax returns and purchase receipts disagree.

The BS flag just went up the flagpole at warp 3.

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johnva
May 11, 2010 5:08 PM
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Yes, because your experience is everyone's.

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TasteyCat
May 11, 2010 6:09 PM
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I've done the math on this. I hate math. A move to the Czech Republic would save me 35% of my total income in taxes (excluding any differences in VAT vs. state sales tax). I'm not seeing the savings, or why the US can't make it work.

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Trilby
May 11, 2010 7:06 PM
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I am paying WAY more taxes than ever before. I used to have 3 dependents and now I only have one. And I used to be self-employed. That helped A LOT. Now I get a puny salary with huge chunks taken out by the IRS, NYS, and NYC It sucks. Don't tell me I'm paying less!

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fs210
May 11, 2010 8:23 PM
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Another editorial which misrepresents a deliberately misleading article.

The article, although it doesn't state what it takes into account, does mention its omitting taxes for SS. In other words, \"well if you don't count this, your taxes are pretty low!\"

Figures lie, and liars figure. But of course, blame it on the tea party.

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TechnoDestructo
May 11, 2010 9:07 PM
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Rethinking implies there was any thought to begin with.

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Yo Howdy
May 11, 2010 10:49 PM
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The people who pay the highest taxes are those who pay voluntary taxes...purchase of lottery tickets.

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trellis23
May 11, 2010 10:50 PM
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Many people are posting about what gets taken out of your check, but that's not how you factor what you pay in taxes. You need to look at your year end after you file. If you get a refund, then even if you were having 25% taken out of your check, you didn't actually pay 25%. I also would guess that few people factored the \"making work pay\" credit. Due to credits, breaks, etc. there were actually many middle-class families this past year, who not only got 100% of their deducted income taxes refunded, but then got even more. And of course, all those in states that don't have state income tax are going to pay less income tax than those that do. But both get averaged in, throwing off how an individual might compare to the average.

Although the article focuses on the cuts for working and middle class, I wonder how the huge cuts over the last few decades for upper-middle and upper class individuals/families (as well as all the breaks and loopholes that have been created for them), affects the average.

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FrankReality
May 11, 2010 10:59 PM
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The problem with this is the averaging - when you have 48% paying nothing, it means the remainng 52% must pay more than average - in some cases much more. The top 25% pay 75% of the income taxes.

Second, there are a lot of people who have capital losses due to the stock market decline, but can only use those losses to offset capital gains and can claim no more than $3K of addiltional losses. For those with investments, these losses resulted in lower taxable income and lower taxes.

Third, with the real estate values collapsing, many people had significant capital losses when selling their homes - again this reduces the taxes paid.

Fourth, unemployed people pay less tax than if they were employed.

Fifth, President Obama will allow the Bush tax cuts to expire, which will raise taxes. He also has proposed other taxes such as a VAT or national sales tax. He will have to raise taxes significantly to fund his programs or greatly add to the debt. BTW, did you know that President Obama added more to the deficit in 1.5 years than the entire 8 years of the Bush admin did.

Fifth, we can't rely on increasing the federal debt, It is not sustainable. If you raise taxes significantly to pay down the debt or even be revenue-spending neutral, you run into what Europe now has - a flat economy with chronic low two digit unemployment and inability to pay for social programs - ah... like Greece.

Enjoy these so-called low taxes for now - they will not stay that way.

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JasonR
May 12, 2010 12:44 AM
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A 9.2% average does not mean that paying approximately 9.2% is common. It's just an average. It's like saying that the average color of all billiards balls is a murky solid gray. Of course none of them is this color, but if you mix them all together that's what you get.

What this says to me is that there are a lot of people paying nearly zero taxes, and a lot of people paying far more as well. No surprise, though my intuition would tell me the average would be more in the mid teens. I guess there are many more at the ~0% range than I suspected.

Interestingly, 9.2% is almost exactly what the average resident of New York City pays in just State and City tax... a couple points less for those with incomes in the

I can't say I find the current system 'fair', but then I remind myself that it's not really 'fair' that I'm so fortunate and so many others are not. I don't feel guilty, but there's little other way to pay so much in taxes and retain a smile on your face. Charitable contributions help on both counts.

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JanDuKretijn
May 12, 2010 10:07 AM
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It's rich that people complain about taxation being too high. Nobody earns a single cent in this country solely on their own. Any money you earn isn't yours alone; it wasn't earned in a vacuum. You have benefited from a system that has allowed you - through either luck, inheritance and/or hard work - to make a living. That system includes the military, government, schools, hospitals, roads, parks, communications systems, police, firefighters, pollution controls, meat inspection and a thousand other less obvious protections. Without those, you'd find the U.S. a far worse place. We all must pay back into the system in order to keep the U.S. minimally livable and civilized. And before you complain too much more, look at Denmark. See what their 45% taxation rate gets them - we get relatively little for our 25%. We should be paying much more here.

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thebaron
May 12, 2010 10:13 AM
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We still need to drop the size and scope of the government and even less money in taxes given to those criminal bums. We need to get away from the cradle to grave march that will kill our economy even further. I think dropping our federal government to 1866 levels would be best.... Destroy income tax and remove the pensions/health care for elected officials as being elected should not be a job as we would consider it. Maybe see more rotation of congresspeople and no more dying in their seats....

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madfrog
May 12, 2010 12:20 PM
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If you live in CT, especially Fairfield county, your saying \"Bullshit\" right about now. We pay 6% Sales Tax, have a state income tax, motor vehicle tax, one of the highest rates for gas due to taxes, etc. etc. I am also in the 25% bracket which doesn't help. I heard that NY is even worse.

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antifox
May 12, 2010 1:22 PM
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Fox will not allow that truth to come out, they will state the Billionaire bankers need it and mostly tax free. Blame the illegals. Remember most of the nations wealth is held by 90% of the rich who pay little or no taxes, ie rubert murdoch, owners of the dodger baseball team ect.

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