This buffoon has apparently been guzzling every drop of Kool-Aid he can get his hands on. He claims his effective tax rate is just 6.7%. What a pile of crap.
First off, his method of calculating his Federal tax rate is incorrect. He is dividing his Federal tax by his total yearly income. But he’s failling to take into account that payroll taxes, such as Medicare and Social Security, already took their bite out of his annual income and he did not receive credit for those taxes already paid. Let’s say this overpaid “journalist” makes $60,000/yr. and paid $5,000 in SS/Medicare. His post-payroll tax take-home pay is $55,000 and that is the number he should divide his Federal tax by to see his effective Federal tax rate. If he paid $4,020 in Federal taxes (6.7% of $60K), his real tax rate is 7.3% when measured against hist post-payroll tax income (4020/55000)… which is 17% higher than the rate advertised by the Feds and parroted by this buffoon. The most straightforward way to measure the tax rate is to add his payroll and income taxes… 9020/60000 = 15.3%. The portion of your income which is taken by payroll tax is effectively doubly-taxed. And unlike the impression he gives in the article, most middle-class Americans do not qualify for most tax breaks. This Prius-driving dingbat may think that everyone else is an latte-drinking urbanite metrosexual just like himself but most of us don’t jump at every carrot thrown out by the central planners in DC and end up paying closer to the 20-25% Federal tax rate. At the conservative 20% figure, the average middle-class American is paying $17,000 in taxes ($12K Fed income tax + $5K payroll taxes). $17,000/$60,000 = 28.3%.
But we’re only getting started. Real inflation - which isn’t even measured by the Bureau of Labor Statistics - has been hovering around 10% per year since 2000. This is a simple 10% annual wealth tax - to calculate its total effect, this slobbering Marxist moron should add his annual income to the probably very large savings he hypocritically piles up in the bank and multiply by 0.10. For example, let’s say he has $20,000 in his savings account. His total income was $60,000 + $20,000 in savings = $80,000. The effect of the inflation tax is to transfer $8,000 from this giddy taxpaying nincompoop to the Federal government. That should be calculated in addition to all other taxes paid.
($17K + $8K) / $60K = 41.6% effective tax
But we’re still only getting started!
Most States put an effective tax burden around 7% on top of this. 7% * 60K = $4200. Adding that to the Federal tax pile:
($17K + $8K + $4200) / $60K = 48.67%
Of course, this babbling moron would never dirty his hands with the filthy lucre of “Wall Stree profits” but if you take short-term capital gains from income you earned this year (which is true almost by definition unless you are a hardcore day-trader), you will pay double taxes on it (once as income and again as “investment income”). Boohoo, he would say, if you’re dabbling in the Wall Street casino, you’re either a millionaire or a gambling addict and you deserve to be double-taxed either way. For many Americans, the bonuses they receive are in the form of stock options or “restricted stock units” which account for as much as 10% of their pay. This portion of their income is taxed at the Federal tax rate (in this case, 20%) plus an additional 15% double tax. If this jingoistic journalist had earned his income as many middle class Americans do with a portion paid in stock units cashed out as short-term capital gains, he would have $6000 of income that is subject to this double taxation, an additional $900 in taxes:
($17K + $8K + $4200 + $900) / $60K = 50.17%
And now for the coup de grace … almost all households in the United States are dual-income. That means that a $60K household is actually comprised of two $30,000 earners. So, you have two people earning $15/hr. and paying an effective 50% tax rate. And this nebulous ninny has the gall to tell them that they should be happy they are “only” paying a mere 6.7% in taxes! The paltry sum of money left in their hands at the end of the month is a result of their own failure to exercise self-control!
But wait! There’s more! We didn’t count the effects of regulatory monopolies (electrical, water, garbage, gas, sewage, cable providers) or regulatory cartelization (automobile, rent, etc.) or government subsidies (foodstamps, student loans) that drive up the cost of living far above that which would pertain in the absence of government interference and act like a regressive inflation tax on everyone. This is, of course, unquantifiable but it is real. Then add in the tariffs, sales taxes, transport taxes, licensing and permit fees, administrative fines and so on and you’re talking about a significant portion of that piddling 50% of your paycheck that you got to take home being eaten up. I think that even 50%-60% is a conservative estimate of the effective burden of the government on the middle class. I think it’s closer to 80%-90%.
Clayton -
