No. of Recommendations: 44
Federal Income tax 33%
State Income tax 7%
Self employment tax 12% (SS and Medicare is doubled for the self employed).
Property tax $10,000/yr.
Some of these are cross deductible, which reduces the tax bill marginally, but there you have around 50% take home. Add 8% sales tax. Gas tax. Fees and more fees. The capital gains part of income taxes, even though, as a part owner, we have already paid corporate tax. Tax on top of tax. For our rulers, it is never enough.


When you say “33%” what you mean is “around 24%”, since the 33% only applies to the last dollars, that is, anything over $190,000. Income under $9,000 is taxed at 10%, even if you make a million dollars. There’s a tier where you pay just 15%, another at 25% and so on. It’s a *progressive* scheme, see? If you are actually paying 33%, you are earning over a million or so. I weep for you.

State income tax has, to this point, been deductible from your federal tax, so that’s “0%” Likewise sales taxes, to a point. Don’t count this twice, OK?

Your self employment tax may be 12%, it’s true. Congratulations because if you are paying 33% it means your income is seven figures and you have a multi-million dollar asset in your business as well. I weep for you twice. If you have a multi-million dollar business, then (FICA) taxes you pay on employees salaries are deductible as an expense, reducing your business income. Don’t pay this twice, OK? And don’t try to deduct the employee’s half, only the half the business pays.

If your property tax is $10,000 a year, then your house is grand if you live in a low property tax state, and modest if you live in a high state. Those states tend to have more services which require more taxes: snow removal, more density of population requiring more police, fire, highways, and such.

Again, as syke points out to you: if you are paying 50%, your accountant is embezzling from you. Seriously. I know math is hard, but changing accountants isn’t.
Print the post  

Announcements

This is a Politics Free Board
Politically charged posts are not permitted on the Metar Board. If you make a political post, and it is alerted, the post will be removed. Thanks!
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.