Monday, March 02, 2009

Taxation 101

March 2, 2009

This post is full of math. If you're shy of math or find it boring, you might want to venture elsewhere. You'll be missing out, however, for I intend to use "stimulus" and "package" in the same sentence.

Taxes are about taking money from one pocket to place in another.

It's that simple.

Distribution of funds from the government DO NOT come from the government. They come from you and me (that is if you're paying taxes and I challenge you to find out today if you do). If you don't pay taxes, be grateful for hardworking Americans. And if you're getting more money than you make (and many are), be grateful for hard working Americans.

I believe in charity. I also believe in helping others when it is my choice. I'm sure welfare of various forms has its place, but if you happen to be on welfare and also happen to have a maid... the government is not paying for your maid, I am. Well Spouse mostly, being the better paid 'n all. And if Spouse is paying for your maid, the rabidrunner gets pissed 'cause Spouse won't get her one.

Ready for that math? Sweet!

The middle class* pays 25% income tax. This means:
  • For every dollar you spend, you must earn 1.25
  • To pay sales tax on this dollar, you must earn an additional .06
  • To pay for social security or FICA, you must earn .07 (it's actually .0765 but we'll round down)
  • By law, your employer must match your social security tax, so you must earn an additional .07
  • To pay Utah tax, you must earn .05

Shall we add this up? 1.25 + .06 + .07 +.07 + .05 = 1.50

For every dollar the middle class spends, they must first earn $1.50. That awesome purse you bought on sale for $40? You need to earn $60 to pay for it. Hundred dollar running shoes? Buck Fifty. As in one hundred fifty. A car listed at $20,000 will set you back $30,000 - if you pay cash.

Keep in mind that this is before that stimulus package - which most assuredly, is a wand with all size and no magic.






*Middle class for married people embodies the income range of $63,700 - $128,500. One might argue that this is considered upper middle class, but I disagree. Have you looked at the cost of houses lately? You can see the complete tax bracket table for 2007 here. (I couldn't find a neat little graphic for 2008.)

2 comments:

Mandee said...

very helpful- I especially like

"wand with all size and no magic".

Sometimes I feel like Glenn Beck and I are the only ones pissed off over the stimulus package. But I have to believe that even some of the hard working democrats out there don't like it either.

Winder said...

You forgot to mention-- On welfare, have a maid, and taking a trip to Disney World with your "tax return???"