Holy shit. Taxes are insane.

D

DanMach

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I just started a new job and was looking over my paystub and damnit. I went up to the next tax bracket because of a sizable increase in pay.. but damn. I almost wonder if something was done wrong by HR... actually! Wait, wtf.

So my first check from was for 1 week(pay cycles and everything). Comparing that to the second paycheck(2 weeks worth) all the tax payments are twice as big, as they should be, except for fed witholding... which somehow is 3.3 times bigger.

wtf? Is that right? Ugh I hate tax crap :(
 
Just be glad you don't live in Canada. 30% off the top, 13% sales tax, and the government taxes the stuff we buy even before we see it, so booze is double cost, for example.

Of course, in return, life is pretty sweet up here...
 
ya I know, give and take... but earlier this year I would of traded the tax savings for free medical care. Sliced my left ring something awful and they charged me 3 or 4 grand for everything.. eventually it was lowered to about 1200$.



(eep)
 
Ouch!

As for the taxes, last year was my best year yet and given how my firm's system works, about 40% of my income came in in the last 3 months....should have seen my withholding...and then I had to write a small check on April 15th (and I have four kids).

I've been lower income (well, poor). I've been solidly in the meaty part of the middle income bell curve and thankfully, I'm starting to edge towards the fun part of the curve. I'm not going to get overtly political, but anyone who says that the poor get pounded on taxes and those who make more skate....doesn't know what they are talking about.

BTW- emergency care may be fine, but I have a buddy living in Scotland who's been on a waiting list 7 months for preventative dental care we in the U.S. can call up and get tomorrow...or later today.
 
Yeah, choice for health care would be nice, although we're moving in that direction.

Still, if I moved to the US, and put all the money I would save into a bank account, I'm sure I could pay for my medical bills and have money to spare. Us healthy young 'uns are subsidizing the baby boomers.

That's a pretty gross picture, by the way. Thanks for sharing?
 
You are welcome :p

I don't want to start political stuff.. but the main issue people have with tax levels is that the high end of the income scale have a lot of income that falls under 'capital gains', which is taxed at 15%. Which is roughly the same tax scale as those who make 35k pay.
 
In the '70s,I worked on several"shut downs" of refineries[lived in Texas],where the plant is shut down for a short time,and feverishly repaired.I made good money,but more than 1/2 was taken out for various taxes,which came to $1500-$1750 per week for 2-3 years.I never got a penny of that back in a refund.My normal pay,for 40 hrs was taxed about $250 per week,again getting nothing of a refund.Now that I'm 60yrs old,disabled by 10-15 herniated discs,crippling arthritis,and degenerative joint disease,I'm considered a leach for collecting a stipend from the system that I paid into for 45 years.People who never worked in their life,despite health,are considered"poor underclassed people" who never had a chance.I started out life as a poor dirt farmer born with rickets[a form of malnourishment not seen in all but the worst places],but I started working full time at 13 years old and never looked back,just like anyone else can. lha
 
DanMach said:
You are welcome :p

I don't want to start political stuff.. but the main issue people have with tax levels is that the high end of the income scale have a lot of income that falls under 'capital gains', which is taxed at 15%. Which is roughly the same tax scale as those who make 35k pay.
Click to expand...

The problem with that type of thinking is that the money that is invested to get those "capital gains" was already taxed when earned,then taxed again at"only 15%" lha
 
"The problem with that type of thinking is that the money that is invested to get those "capital gains" was already taxed when earned,then taxed again at"only 15%" lha"

This is only true in scenario's where people pay for the investments. Stock options and incentives don't fall under that bracket of thinking. Stock options, in the right circumstances, do not become taxed until you sell them off and gain the profit from it. This tax rate? The 15%.

" You have taxable income or deductible loss when you sell the stock you received by exercising the option. You generally treat this amount as a capital gain or loss. However, if you do not meet special holding period requirements, you will have to treat income from the sale as ordinary income. Refer to Publication 525 for specific details on the type of stock option as well as rules, for when income is reported and how income is reported for income tax purposes." -- IRS.

If someone makes enough money, say 200k/year, to life comfortably they have no need to sell these stocks until the special holding requirements are met. At which point they are taxed for 15%.

Which means... wealthy people who are paid partially in stock options(It may even be the majority of there compensation) pay a tax rate far lower than people who made just 50k/year.

Not only this, but the stock options can be used to give you cash anyways.

Security backed lending allows you to take out lines of credit on stock options you haven't sold in order to turn them partially into cash(by partially I mean a higher % of the option's worth). Allowing you to further dodge the taxation of your 'income'. You now go from 200k/year + 500k in options to just 600k a year with only 200k being taxed.

That is 400k+ that is simply not being taxed. Will it eventually be taxed? MAYBE. It is possible to delay the taxation for years or decades until you time it with a large purchase of some kind of tax deductible object. At which point in time you simply sell the options off and generate a ton of income all tax free.
 
The money spent on those who never work,and have no intention of starting to do so far outweighs the money"lost"by lower tax rates,which by the way are changed every few years by congress,after of course opening another loophole for their money. The "entitlement"industry,mined for years by politicians who assure themselves votes by getting as many people as possible hooked on freebies. That's what we as Americans should be worried about,not lower tax rates on capital gains.People like Edward Kennedy,who never paid a cent in taxes in his life,but imposed taxes on others far below his level of wealth should be the object of scorn,not people who work and pay taxes,even if not as much as you'd like. lha
 
See,people can have a discussion about political stuff without getting mad and calling names! Great stuff.I wish that could happen in"real life"!!!! I used to notice an increase in my check about April-May,and asked about it,and was told that I'd paid the maximum on social security taxes. Nowadays,I'd be surprised if that happens anymore. lha
 
lhaolpa said:
See,people can have a discussion about political stuff without getting mad and calling names!
Click to expand...
You guys are stealing all my good thunder - I have been meaning to weigh in here with brilliant, insightful and definitive analyses but have been busied by other priorities.
And I let yesterday go by without a mention. A special day in the lives of Drewpy and our other colleagues in the Mother-Land: Tax Freedom Day in the blessed U.K.
http://www.adamsmith.org/blog/tax-spending/today-is-tax-freedom-day-2012
 
Well, at least ours is still in April. In fact, this year it was the very date when federal tax returns were due, April 17.
 
Interesting that in the land with the earliest TFD, the debate about taxes is the most rancorous. Either it's much a'do about nothing and you're all crazy down there, or, there is a cause-and-effect relationship.
If the latter, perhaps the rest of us should work up more rancour.
PS - It's June 7th (I think) up here ....:banghead:
 
I live in sweden and pay like 33% taxes on my salory, after that it's taxes on everything you buy over here..
For example 1gallon gas in sweden is about 8bucks..:doh: .. sucks donkeydick!
 
Just means you'll be getting a chunk back when you file the return. If you can't spare it on the front end then figure out what you need to save and change your withholding.
 
You'r probably right, the problem is just what the taxmoney is used for here!
! But I'm not gonna complain, it's still "free" healthcare, school up till 19 and all that!

I'm just saying some more papers in the wallet would be more funny :D
 
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