If you want to talk marginal taxes, and how much “extra” income is taxed, you can’t include FICA. You hit the limit on FICA way before you hit the top tax bracket. So again, the math doesn’t work. If you’re considering the taxable portion of a bonus, the highest possible marginal tax rate is 46% if you’re in Hawaii. More typically it’ll be 41%, not 51%.
And again, you’re comparing two different things, since some of the taxes that add up to your “51%” are taxes that are not included in any “X% of Americans don’t pay income tax”.
You are in the top tax bracket and you’re payed hourly?
Anyway, I’m made curious by your vagueness. If you have paychecks where you work an extra hour from what you normally do, can’t you see from the withholdings listed on your paychecks exactly where the money went?
Note that several posters have already refuted these points multiple times and in great detail, and the OP is now basically just spamming in a different thread.
There’s already a great deal of evidence that sbright33 doesn’t understand what “marginal” means and continues to use bad numbers.
This includes repeating the false idea that the “average” American pays both the employer and employee share of SS/FICA, which tops out at 7.65% for most working Americans. We’ve already presented evidence that it’s NOT 15% for most Americans multiple times only to have this point ignored multiple times.
If you are getting a paycheck (as apparently the OP posits), you do NOT see 15% SSFICA. You see, at most, 7.65%. The employer covers the rest. If you are self-employed, you are NOT representative of the majority of this country. And if you are in the 35% bracket, your marginal rate is less than this. I’ve already provided numbers to this effect in the other thread, and it’s disappointing that sbright33 chooses to simply ignore the (incredibly simple) arithmetic and run away to start a different thread with the same content.
If you do not believe me I am willing to scan and Email you my paycheck. It is the same for everyone, not just me. Simple math. I have about 43% taken out. You’re right the employer pays 7.65. Add them up and you get about 51%. I’m not trying to trick anyone with this simple addition. I don’t want to argue about this number. It is a fact. Like 2+2=4. 35+15+50. The reason I started this thread is not to argue 2+2=4.
It is to say 1/2 of us pay NO income tax!
I have never written that before on this forum.
For those of us who earn significant interest and dividends, EVERY DOLLAR OF EARNED INCOME is at the marginal rate. If you consider the interest as the first dollars earned at the lower rate. Obviously this is before deductions and tax credits.
Then why are you adding the payroll tax rate to the Federal Income tax rate and calling it “the marginal rate?”
That doesn’t strike me as the type of thing to come from someone who understands what Marginal tax rate means. At fist glance it appears to be something that might be said by someone who DOESN’T understand what it means. If the added assertion that the person DOES understand is to be taken at face value, it begins to look like something that might be said by someone with an Agenda (and probably an Agenda that benefits most when the audience itself does NOT understand).
I’m NOT saying we pay both halves of SS/FICA. I’m saying somebody else pays it for our benefit. It’s taken from me, and my employer. It’s a benefit that our employer pays for us. Like health insurance, or a membership at the local spa. We pay for these benefits indirectly by going to work every day, with our time. We don’t pay both halves of SSFICA in cash. Although it is cash we don’t see. It is cash we would have gotten paid under the table in some countries or job types here. It is less cash for us to take home. It is really no different from taxes we don’t see. Both are taken from our paycheck. It doesn’t matter to the employer if they pay our SSFICA, or we pay all of it with the extra money they pay us. Either way it is money spent on Human Resources that we don’t see when we cash our check at the bank. That’s all I’m saying. I’m not trying to sneak it past anyone.
This is absolutely mind-boggling disingenuity. First, no one can figure out why you’re adding the employer’s contribution to your tax bill and calling it your own. Second, you’ve been told that all workers pay FICA taxes, yet you claim that half of us pay no taxes.
Tell me, why do you get to count not only your own FICA contribution but also your boss’s, while you don’t count it for the supposed “half that pay no income tax”?
@kaylasdad99- The word marginal is causing the problem here. I know what it means. You know what it means. So let’s stop debating what it means!
When I earn an extra $10.00 this paycheck, for any normal reason, I only see an increase of $5 at the bank when I cash it. Simple as that. Don’t make it more complicated. I don’t want to argue about 0.76 cents.
@Chessic- Simple. It is money taken before we cash our paycheck. But it is not INCOME tax. I never claimed 1/2 the people pay no tax. I said INCOME tax. Please read carefully. Sorry if I made a typo.
Let me reframe my Assertion. Some of us pay 43% of our paycheck to the government for the benefits we get later, in addition to 7.65% that our employer subtracts from our gross pay in advance. For each additional dollar earned! The exact number doesn’t matter to me. My point is this:
It is tax season. Find your W-2, and tell us your total income, your income tax paid, and your Social Security tax paid. That should clear up everything for your particular case.