Americans Work More hours Than Anyone Else in the World

[Luminar]

"It’s not quite 50% but it’s a significant portion thereof. The effective tax burden includes State and local taxes plus Federal payroll taxes. The effective burden is far, far higher than the absurd “Federal income tax rate” which is always advertised as proof of “low American taxes”. Also, many of the withholding practices are flatly unfair. For example, I receive a bonus at the beginning of the year. The IRS rules cause this bonus to be taxed at the highest tax bracket as if my monthly income were that amount every month of the year. Plus payroll taxes, plus State taxes. I only see around 40% of the bonus and will not receive an adjustment until over a year later when I file that year’s tax paperwork.

While my ordinary paycheck is taxed at a rate less than the 60% effective withholding that the bonus is subjected to, what is unfair is that even though I am earning way, way less than half of the $250k top marginal rate, my effective tax burden is much more than half of the effective tax burden of people at $250k. And this is true of almost anybody who earns around what I call the “middle class sweet-spot”, which is around $60K.

The sweet-spot is the income where the number of people earning that income, times the income, is greatest. If you sum up all the dollars earned by $40K earners, it is less than the sum of all dollars earned by $60K earners. If you sum up all the dollars earned by $80K earners, it is also less than the sum of all dollars earned by $60K earners. Hence, the government’s “weight” is centered firmly on the $60K bracket and tapers off on either side of it. As you move above it, you have an increasing number of ways to escape basic taxation. As you move below it, the basic income rates drop off rapidly. The worst possible place to be is single, earning somewhere around $60K. You’re dead-center in the government’s tax-bullseye."

Ugh. I can see where tax evasion comes from now.