Thursday, April 15, 2010

Tea Partiers are Insane

Either that or they are utterly innumerate or so blinded by racism that they can't tell the difference between the number 12 and the number 10.

Our taxes went down a lot this year compared to last, with almost no change at all in our income level and without benefiting from any of the "special" tax cuts in the ARRA plan (sales tax on a new vehicle or downpayment on a new house).

How much?

Most years I calculate an effective tax rate by dividing the income taxes due by the total income (bottom line on the front page of form 1040). It gives a sense of what my "flat rate" tax would be if income was taxed in the same way the FICA tax is figured. The result?

Last year we paid almost 12.4 % of our income in "income tax", while this year we paid less than 10.9 %. That is more than a 10% drop in our taxes whether you figure it from the percentages or the actual dollars paid. So I say "Thank you Pres. Obama, Sen. Reid, and Rep. Pelosi for cutting my taxes" even though we make well over the median family income for our area.

What didn't go down? We still pay (between out of my pocket and out of the pocket my employer pays me from) over 15% in FICA and Medicare taxes, a rate far higher than our income tax rate. Further, we pay (again between out of pocket and out of employer's pocket) about 12% for health insurance, even before you total up co-pays, which is a bit more than we pay in income taxes.

Between Social Security taxes, Health "taxes", and Income taxes, our income tax rate is the lowest of the three. (Our state and local taxes are much smaller than any of those three.) Given our income bracket, this should also be true for more than half of the US population.

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