Trade Wars

[GO-NAD!]

it's 'braketed', so in essence your only paying the 37% on your income of above $609, 350

Ah, so 37% is the marginal rate. What's the rate below that income level? Whatever it is, anyone who makes that kind of money and complains about that level of taxation needs an attitude adjustment.

 

[dlaloum]

I'd say too much, but would like to know where the money is going. Lower class SS? Does the taxes we pay earlier equate to what we get later in SS? Or is the upper class paying for some of that too?

Pretty much no one pays that top marginal rate - they organise their finances to take advantage of deductions, or have the money wrapped up in non-income generating investments, where the capital value increases, etc...

Loopholes, loopholes, lots of loopholes

In the past when I read articles analysing the tax statistics, one thing that was very visible, was that the middle class and lower class (the "working classes" ) net taxation per person, ended up higher than the per person taxation of the high net value individuals....

Due to the loopholes, the actual top marginal rates are of mostly academic interest!

 

[Dude#1279435]

Pretty much no one pays that top marginal rate - they organise their finances to take advantage of deductions, or have the money wrapped up in non-income generating investments, where the capital value increases, etc...

Loopholes, loopholes, lots of loopholes

In the past when I read articles analysing the tax statistics, one thing that was very visible, was that the middle class and lower class (the "working classes" ) net taxation per person, ended up higher than the per person taxation of the high net value individuals....

Due to the loopholes, the actual top marginal rates are of mostly academic interest!

Yes loopholes so gov doesn't take 37%.
As a percentage the lower classes might be higher, but the wealthy still pay far more in dollars.

 

[Dude#1279435]

Marginal tax bracket is how the system works now.
It's like a flat tax within a bracket.

When does the 90% kick in? At what level of income is surpassed?

 

[Dude#1279435]

Think I called it a flat tax but think it was once termed the fair tax.

 

[highfigh]

Right? I mean, people who paid those rates in the past must have all quite their jobs.

OMG! Who can live on $400k!?

This is marginal tax rate, as mtrycrafts posted- that rate isn't for the person't entire income. Here's a link-

Marginal Tax Rate: What It Is and How To Determine It, With Examples

The marginal tax rate is what you pay on your highest dollar of taxable income. The U.S. progressive marginal tax method means one pays more tax as income grows.

www.investopedia.com

 

[highfigh]

I'd say too much, but would like to know where the money is going. Lower class SS? Does the taxes we pay earlier equate to what we get later in SS? Or is the upper class paying for some of that too?

Look into government waste. If one thing is certain, government is NEVER efficient.

SS only comes from FICA- the government doesn't contribute when a pension plan replaces it and public employees can be members of AFSCME (American Federation of State, County and Municipal Employees) or other public retirement system, as the link shows. Employees pay their 7.65%, employers pay the other half and many pay the 'self employment tax", at 15.3%. During severe economic times, the employees may see reduced payment (2008-2009) and IIRC during COVID). I don't think employers saw a reduction on their side, though.

High earners making up to $176,100 and nothing above that for FICA.

Do Employers Always Pay 7.65% for FICA Taxes?

Understand when employers pay the standard 7.65% FICA tax, the exceptions that apply, and how self-employment affects tax responsibilities.

accountinginsights.org

 

[highfigh]

No, SS is based on what you made in your lifetime or the highest 35 years of earning and each year of SS you paid in. If you paid the max each year you get maxed out.

ps. call SS, if you can get anyone to talk to and ask them how your SS pay is calculated.
or How is your SS retirement pay calculated - Google Search

For some reason, I haven't had problems with SS answering my calls. I don't call often, but they were friendly and helpful.

 

[Mikado463]

When does the 90% kick in? At what level of income is surpassed?

90% of what ?? are you talking about 90% tax bracket ?? No such thing that I know of ??

 

[mtrycrafts]

When does the 90% kick in? At what level of income is surpassed?

Don't have that number for you but it isn't $400k. But we are talking about the past that makes it more difficult to compare today's possible income. Google has it somewhere.

 

[mtrycrafts]

90% of what ?? are you talking about 90% tax bracket ?? No such thing that I know of ??

Historically speaking there was such a marginal bracket and higher.

 

[mtrycrafts]

For some reason, I haven't had problems with SS answering my calls. I don't call often, but they were friendly and helpful.

In the past yes, they answered promptly. Today is another matter as I heard calls took hours to get a response. Or, that may not be the truth?

 

[Mikado463]

In the past yes, they answered promptly. Today is another matter as I heard calls took hours to get a response. Or, that may not be the truth?

Glad I'm under Railroad Retirement and with a direct number to 'my gal' in Chgo....

 

[mtrycrafts]

When does the 90% kick in? At what level of income is surpassed?

Here you go of a partial grab for 1960. The brackets are pretty close ramping up to max

 

[mtrycrafts]

This is marginal tax rate, as mtrycrafts posted- that rate isn't for the person't entire income. Here's a link-

Marginal Tax Rate: What It Is and How To Determine It, With Examples

The marginal tax rate is what you pay on your highest dollar of taxable income. The U.S. progressive marginal tax method means one pays more tax as income grows.

www.investopedia.com

Interesting chart. Notice the 1923 tax rate to 1929 if that was a prelude to the crash.

 

[GO-NAD!]

This is marginal tax rate, as mtrycrafts posted- that rate isn't for the person't entire income. Here's a link-

Marginal Tax Rate: What It Is and How To Determine It, With Examples

The marginal tax rate is what you pay on your highest dollar of taxable income. The U.S. progressive marginal tax method means one pays more tax as income grows.

www.investopedia.com

Yes, I noted that in post #501.

 

[dlaloum]

Look into government waste. If one thing is certain, government is NEVER efficient.

SS only comes from FICA- the government doesn't contribute when a pension plan replaces it and public employees can be members of AFSCME (American Federation of State, County and Municipal Employees) or other public retirement system, as the link shows. Employees pay their 7.65%, employers pay the other half and many pay the 'self employment tax", at 15.3%. During severe economic times, the employees may see reduced payment (2008-2009) and IIRC during COVID). I don't think employers saw a reduction on their side, though.

High earners making up to $176,100 and nothing above that for FICA.

Do Employers Always Pay 7.65% for FICA Taxes?

Understand when employers pay the standard 7.65% FICA tax, the exceptions that apply, and how self-employment affects tax responsibilities.

accountinginsights.org

Actually in my experience, small organisations (<20 employees) aside, corporations have the same level of inefficiency / bureaucracy as government organisations do - there's lots of puffery about "private being efficient" - and "gains achieved through outsourcing"... but my experience, having worked for decades in such outsourcing, there is no inherent efficiency advantage or disadvantage, private industry, all else being equal (including all the typical legal, regulatory overheads etc) - the private alternative costs the public purse (ie: the taxpayer) more, due to the profit margin impost.

Often the government waste is driven by specific political interests, lobby groups, who insist on spending which ends up being inefficient.... wasteful.

The problem then isn't "government being inefficient" - but distortions driven by politics and lobby group power - these could be constrained... but no politician is going to support constraining his main source of election funding. (or not without a substantial push / shift in ground level support for this sort of effort!)