Watching the documentary Mitt there was a short part about a small business owner who said he spent about 60-65% of his income in taxes.
Which got me wondering if that is possible. I do not understand small business taxes however I understand you have to pay the full FICA by yourself which is 15.3% of gross income, up to about 100k.
So an income of 100k would have a federal income tax rate of maybe 22%.
Do small businesses get any tax credits to offset them having to pay the full FICA tax?
If property taxes are extremely high, they could be 8% of gross income.
So those 3 (federal income, FICA and property, all assuming you are at near the highest rates) adds up to 45% of a 100k income without taking into account state income, county, city taxes as well as sales taxes, fuel, sin taxes, etc. My state has fairly low income taxes, but places like CA can have 8-10% rates. However I don’t know to what degree the tax rate is deducted from federal in various states. And CA has a pretty high state income tax rate.
Gasoline is only about $0.40 in state & federal taxes per gallon. With 2 cars and maybe 150 gallons a month that is only $60 a month for fuel taxes. At best, less than 1%.