You and me both. This seems to be someone making over, what, $388,000 per year, getting paid hourly, who does not seem to have a financial planner and hasn’t given forethought to addressing withholding concerns.
Hence my speculation that he might be driven by an Agenda…
So let me get this straight. You take a check to the bank for $10. They give you $5 for it. One of three things is happening here:
- Your “bank” is actually a payday loan place and is hitting you with exorbitant fees.
- You’re the only customer… unintuitive enough to still be dealing with the First National Bank of Ripoff.
- Your account is overdrawn by an amount that coincidentally matches exactly half the balance of the checks you deposit.
Try switching banks. That seems to be the common element here.
I’ve a hunch about what might account for part of the arithmetical discrepancy:
Isn’t the income tax withholding rate calculated by extrapolating wage to an annual rate? But social security withholding set to a standard rate until the annual maximum has been paid, i.e. higher in the earlier months of the year? (If so, OP may be confusing marginal tax with marginal withholding.)
This still leaves me confused what the OP’s debate is. His taxes are too high? Someone else’s too low?
The rent is too damn high?
In fairness, that isn’t what he’s saying at all. He is saying that when he earns an additional $10 during a pay period, that the amount of that additional gross income nets out to be $5 after taxes.
I’m not inclined to debate this general topic much further, but it is clear the OP is not saying that the bank is taking half of his overtime pay.
If he’s saying that he’s patently wrong. I just looked at my last year’s checks before and after my raise. I kept 67.7% of the increase. If I count the 20% of my paycheck that goes into my 401k, then I get down to keeping only 48.7% of the increase, but counting the 401k contribution as taxes is so obviously wrong that I feel silly for even mentioning it.
I agree, look at my posts #35 and #42. My comment is only to clear up what, exactly, he is claiming, and it is clearly not that the bank is somehow taking half of his paycheck.
I’m not sure I want to subject myself to this, but as someone who very recently paid no federal income tax (I was part of that 51%!) let me correct the OP on something.
For every additional $10 my employer gave me, I only saw about $7.50. And yet I paid nothing in federal income tax.
Let me put that another way - you’re complaining about losing 43% of your paycheck to taxes. I lost 25% of my paycheck to taxes. That’s not all that different.
And yet, I was part of that 51% that paid no federal income tax that you’re complaining about. Do you see the problem? You’re trying to characterize everyone in my situation as a freeloading bum while you’re paying sooo much. You’re doing this by lumping every tax dollar you can into your effective tax rate, including nonsensical values like those your employer pays, while ignoring every tax dollar I pay, including nonsensical ones like those my employer pays.
(And I’m not including sales tax and property tax, which would bring our effective tax rates much closer. I’m just talking about stuff that disappeared from my paycheck every month).
I suspect that this is a “Joe the Plumber” situation. Remember Joe? He was pissed at the amount of taxes that his plumbing company paid. Only he didn’t have a company. And he was not paying much in tax. And he didn’t understand the concept of marginal rates either.
I think that our friend in this thread is outraged by the hypothetical taxes he’d pay on his hypothetical huge income that he’s sure to be getting sometime in the future because he’s so clever.
Yeah, I’m sure all those cripplingly poor people and retirees are better off than the rest of us…:rolleyes:
I don’t really feel qualified to weigh in on this, but I think you are comparing different things here.
a) Federal Income Tax filed annually
- population that files an annual tax return but doesn’t have to pay anything
b) Payroll Deductions calculated weekly/biweekly/monhtly
- percentage of tax increase on overtime hours compared to regular hours
c) Payroll deductions
- percentage of tax paid for regular hours?
The marginal rates look interesting on the total annual income, but does it really matter on a given paycheque? I suppose it is disappointing to see a big chunk disappear that quickly. There’s more to payroll deductions than just taking off the taxes. The important part is the final percentage of tax paid on annual income.
I think the marginal tax rates are probably the most important for accountants/tax planners/wage negotiations to determine when you can max out your effective income and not be sending extra to the government.
It is fascinating how people who could choose the “being poor” burden over the “excessive taxation” never seem to, regardless of their apparent jealousy over those lucky duckies. Some day, I really want to read the WSJ opinion page of a guy who was wealthy, but gave it all away to work at Dunkin Donuts so he could stop paying taxes. Some day.
I know a few folks who are deliberately poor to avoid paying taxes. However, this is because they object to how their taxes are used (i.e. they’re extreme pacifists who don’t want to fund the military), not that they object to the amount taken. I don’t believe it’s a terribly common practice.
I wish I could get a job making hundreds of thousands of dollars a year that didn’t require a basic understanding of math or logic.
It’s called Congress.
The sad thing is I’m only being partially facetious.
Yeah. They only make $170,000.
You may be onto something here.
The argument isn’t that it’s better to be poor. The argument is that it’s not bad as it should be.
I wonder how many of the people upset about the 51% paying no FIT are in the 51% themselves and don’t even realize it? Many times over the past few years I have seen people complain that Obama raised their taxes because their refund wasn’t as big as the year before. It would be interesting to see how many people could accurately estimate the taxes they paid +/- $500 off the top of their heads.