Saturday, April 14, 2007

Our Effective Income Tax Rates for the Year

Having just finished our taxes, way ahead of schedule, I spent a little extra time crunching some numbers to better see the actual impact of various income-based taxes on our lives.

Here's what I added together:
Local Tax Paid
+ State Tax Paid
+ Federal Tax Paid
+ SS Tax Paid
+ Medicare Tax Paid

I figure that as our total income-oriented tax burden. Obviously it doesn't take into account the taxes we pay in sales and use taxes, not to mention the staggering amount we pay in excise taxes on alcohol, but it still gives some idea of what we're paying to live in this great country and benefit from the services our federal and state governments provide.

Our effective tax rate, dividing the sum of the above taxes paid by our wages for the year: 13.9%.

Not too bad, I'd say. We are certainly getting our money's worth.

4 Comments:

Blogger Chris said...

How does that compare to the VAT taxes in the EU?

12:54 PM  
Anonymous Anonymous said...

Puhleeeeeeeze,

How about we see a similar post next year when you've paid big boy taxes. I think maybe we'll hear a new song then. I do agree with you this is a great country but, it is our duty to keep the thieves at the state and federal level at bay.

12:08 PM  
Blogger Fishfrog said...

On the topic of big boy taxes, I just got a check from my future place of employment for some living expenses over the summer. The withholding from this check was based on the idea that I would be making this amount on a semi-monthly basis. As a result, slightly more than 40% of the amount of the payment was withheld.

Did it hurt? A bit I would happily pay more if it meant a stronger social safety net for people who aren't as fortunate than me. And actually, by choosing to work in a city with strong liberal policies and a higher income tax rate, I'm not just blowing smoke. I am, as the conservatives would say, putting my money where my mouth is.

6:41 AM  
Anonymous big brother said...

European tax rates are in the vicinity of 30 to 40 percent if I remember correctly. They have better education systems for the masses than we do(This is a generalization, but I believe it to be true) and other benefits we don't.
I would have to disagree that this is a great country. I believe we are a weak, self centered society with little concern for those in need with an attention span of...what am I talking about.
We care more about Football, Baseball and American Idol than anything else. Our country has one of the lowest tax rates in the world.

7:06 PM  

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