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QotD: Taxes

Question: What percentage of your income went towards taxes last year?

My Answer: Standard income taxes - about 30%. Of course, that's much more than the 12% Teresa Heinz Kerry paid.

You are encouraged to answer the Question of the Day for yourself in the comments or on your blog.

18 Responses to "QotD: Taxes"

  1. This is way too easy.

    Why did Teresa Heinz Kerry only pay 12%? Because of all of Bush's ridiculous tax cuts to the über-wealthy.

  2. Correct me I'm wrong, but no can volunteer to pay more taxes.

  3. Well, my rate depends on how you look at it -- I payed no income tax (b/c I'm still in the 0% income tax category), but I had to pay VAT for everything I bought (varies from 10% to 20% at home and 7% when I was in the USA).

  4. Saying that Kerry is wrong, and not standing up for his claims of making the upper echelon pay more taxes because his wife doesn't pay more taxes is stupid.

    First, she (nor kerry) have probably not done their taxes in many years. Accountants know that they are supposed to use as many tax loop holes as possible to save their clients money.

    Being upset because loop holes existing, and can save people money is stupid. Blame the tax low for making those loopholes in the first place.

    If some one owes you money, would you just let it slide or forget about the debt? (Especially if its a large one?) Saying that they are wrong for claiming money from the government is also idiotic. If they made 60,000 instead of 5 million, and realized that the IRS owed them money would any one be upset?

    People who have hirer earning should pay more taxes, but if they are owed more money from the IRS due to tax rebates or cuts.. or just a loop hole can we begrudge them trying to get it?

    Of course... graduated taxing sucks no matter what you do. Here have a raise.. but I am sorry we are going to take more money away.. sorry. 😉

  5. I don't see how Bush's tax cuts are responsible for the "12%" she paid. Yeah, the rich got a tax break, but so did everyone else who pays federal income taxes. They just got more back because they put in more -- the middle class got more of a % back, but its less money because they didn't pay as much. I will never understand the "the rich got more back" complaint. Of course they did -- they pay WAY more than the middle class. I don't understand where the complaint is -- it seems like some want income redistribution -- and that's just dumb and too much of a socialist view for me. I personally was in one of the higher brackets and had to pay WAY more than 12% in federal, and I make nothing compared to Kerry/Heinz. I wish I had a tax man that could get me down to the 12% bracket, because that's the only way it could happen -- creative deductions, etc. Saying Bush's plan put her in the 12% bracket is insane.

  6. I paid more than 40% here in Germany. Reading the other's answers here, I think some people earn % instead of USD / EUR.. Funny how everyone looks at the percentage - Erik - do you really think you paid "way more" than Mrs Kerry?

    BTW, with such an insane amount of money wasted on wars, do you really think the taxes under Bush will not go up if he really gets reelected? Funny concept... election campaigns are such a big sham, but people seem to believe what they want to believe 😉 Especially for you, Erik, I am starting to wish that Bush gets re-elected just for the fact that he will then be obliged to justify and clean up the fscking mess he created at home and in the world. If Dubya really wins this election, I am going to stay calm and stop saying what I really think for fear of being taken to Guantanamo some day 😉

  7. No, Ralph, I said that 30% is much more than 12%. Don't twist what I've said around. 30% is a lot. 12% is less. That's it. I never talked about the raw amount of money paid in, I talked about the percentage of your income.

    Thank you for answering the question, Ralph. It's more than I can say for some of the others.

  8. Oops.. forgot to answer the question.

    Due to various tax loop holes, and income sharing things going on in my family. (and university tax credit) I can't tell you exactly how much I paid. It would have been in total around 40% however. (not including the tax credit)

    Yaa canadian taxes.

  9. I paid nothing last year because I'm still under the income limit.

    Eric, you said that the middle class got more of a percentage back thanks to Bush's tax cut. That's not true:

    "The effective federal tax rate of the top 1 percent of taxpayers has fallen from 33.4 percent to 26.7 percent, a 20 percent drop. In contrast, the middle 20 percent of taxpayers - whose incomes averaged $51,500 in 2001 - saw their tax rates drop 9.3 percent." [Washington Post, "Tax Burden Shifts to the Middle", 8/13/04]

    Those numbers are from the CBO. The tax burden is shifting to the middle class.

  10. Jason, you can't examine the "effective tax rates" since THK's 12% rate is proof that the actual tax rate and the effective tax rate are far from the same. Proponents of a flat tax enjoy mentioning this fact, of course.

    And for those who want the other numbers, here's the article referenced.

  11. Oh, so sorry for not answering the question. I paid 11.34% in taxes.

  12. Yeah, ok, 12% but that's because so much of her income was in fact tax-exempt. The original article says she had $5 million "taxable income" but $2.2 million of that is tax-exempt municipal bonds. The article says she incurred $628,401 in federal taxes which is 12.5% of 5 million. If you take out the tax-exempt municipal bonds, her taxes are 22.4% of her truly taxable income. That's a significant difference. If you factor in her $267,541 of deductions, her taxes are 24.8%.

    For comparison, the Cheneys paid 13.1% but again, that's if you include $627,005 in tax-exempt interest as part of their income. If you take that out, taxes are 18.9% of their income.

    My effective tax rate for 2003 was 7.46%. It was my first time filing jointly and my spouse was a full-time student with no taxable income. In 2002, my income was only a little lower than 2003 (I got about a 2.5% raise) and my effective tax rate was 12.61%.

  13. I had 19.8% taken out of my last paycheck in the form of Federal, State, and Social Security. 20.4% using the Year to Date numbers.

    I suspect my actual tax rate will be significantly less. Most of the State and Federal tax will be returned I think since I am a full-time student.

    Now again I will say isn't it the Bush administration that has set the current tax enviroment? So vote for Kerry if you don't like the rich paying less taxes.

  14. QotD: Taxes

    Question: What percentage of your income went towards taxes last year?

    I had 19.8% taken out of my last paycheck in the form of Federal, State, and Social Security. 20.4% using the Year to Date numbers.

    I suspect my actual tax rate will be s...

  15. Incidentally, tax-free municipal bonds are personal finance 101 stuff. It doesn't take a team of accountants to come up with that.

    "extra88" made a small error.

    The $2.2 million wasn't tax-free munis, it was taxable dividend income. Thanks to Bush, taxes on those dividends were cut from 35% to 15%, saving her $440,000 in taxes. The rest of the $5 million was income from tax-free munis.

    Erik, if you have a problem with this, it's because you have a problem with the GOP's desire to tax your income from work higher than they tax investment income.

    Of course, for the average person, whose equities are in a retirement account, the dividend tax cut means *nothing*, because they aren't taxed on their dividends.

    As for my taxes, I paid none, because I had no job and no income.

  16. Eric (not Erik) wrote: " I personally was in one of the higher brackets and had to pay WAY more than 12% in federal, and I make nothing compared to Kerry/Heinz. I wish I had a tax man that could get me down to the 12% bracket, because that's the only way it could happen -- creative deductions, etc. Saying Bush's plan put her in the 12% bracket is insane."

    It's easy to get into the 12% bracket. Just get your income from investments, instead of from working. Get rich, buy tax-free municipal bonds, and dividend-paying stocks.

    Note, however, that tax-free municipal bonds have a lower yield than taxable bonds. So you'll need to buy more to get enough income to live on.

    Also, dividends tend to be on the order of $1/share/year, so you need a lot of shares to get enough dividend income to live on. Which means a big up-front investment.

    No fancy tax tricks needed. Just lots and lots of money. If you live on a paycheck, even a largish one, you just have to suck it up, because the GOP isn't on your side.

  17. One last comment- THK may well have some money sheltered in ways that require financial wizardry. But it's not money that showed up in that article about her tax filing. The stuff in the filing is straightforward.

    Here's the thing: The woman is supposed to be worth $700 million or so.

    $700 million, and she only has $5 million in income?

    She could easily have 10 times that in annual investment income. I believe the conservative rule of thumb for the rich is that you can spend about 5% a year without eating into the principal. That'd be $35 million. With better investments, of course, it'd be more.

  18. Hi Jon, my figures came from the original article article I cited.

    "The first two pages of her 1040 form show that she had taxable income of $2.8 million and income from tax-exempt municipal bonds of $2.2 million - a total of $5 million."


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