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Making $30k/year, you are taxed at 15% for social security, another 6% for medicare, 13% federal income taxes, and then depending where you live you pay state income taxes and city income taxes as well. Then you pay 10% sales tax. You get no write offs for a mortgage, because you can't afford a house.

The total easily comes to 40% (15% + 6% + 13% + 10% sales tax, not even including state taxes), well exceeding the 25-32% paid at the top. Because the top earners spend a much lower percentage of their income, they are far less effected by sales tax proportionally. Medicare and social security top out at 100k income. So the top earners pay 32%, and that's it (actually less when you include the tax breaks a good accountant can find you).

And that's how you can say that the poor pay more taxes than the rich.



The numbers you cited sounded kind of high, but I hadn't looked at this in a while so I went to verify them. I filled out the 1040ez and the 540ez2 and checked the FICA and SDI rates from the 2008 tables. I found that, for a single person living in CA and earning $30k before taxes, that the total taxes as a fraction of total income (not marginal rates but total rates) are 9.2% fed income, 2.2% state income, 7.65% combined medicare and socsec, and 1.1% ca sdi. The socsec and medicare are matched by the employer, so maybe you want to double that figure assuming that it comes out of effective wages. That gives a total of 27.8%. Sales tax runs around 8.5% but doesn't apply to rent, food, healthcare - arguably all of the non-discretionary items in a poor person's budget, so add another 2% and and the worst case $30k earner with no deductions is going to pay 30% give or take a bit. At the rich end I guess it's harder to say, but in my one an only year of 7 figure income I paid 29% of total income in taxes. It might be worth noting that, of the 30% paid by the 30k earner, 16.5% goes to services that directly benefit that individual and 13.5% go to the common good. In my 7 figure year less than 1% went to services that benefited me directly and 28% went to the common good.


Social security has been raided to pay for the general fund for years. While nominally it goes "to your account", in practice it's a tax used to pay for things in the general fund just like income taxes are.

I may have read the tax table wrong, because I got a 4% higher tax rate for federal income tax. My bad - looks like it's as you say.

While it should already feel a little weird to pay slightly less (percentage-wise) than someone who makes $30k/year with a seven figure income, you actually paid far more than someone who regularly makes that amount would. You had far less incentive and time to set up tax shelters. A "regularly" rich person would pay an even lower percentage of their income.


Whoa, wait. Which services are you saying directly benefit that individual?


you just asserted that income taxes for the poor are 34%...


The percentage of income paid in taxes by the poor is about 34% (ignoring state and city taxes which can easily bump the total above 40% alone).

Sales tax is equivalent to income tax for a poor person (albiet at a discount rate given that their rent, and in some cases food, is not taxed).

Sales tax is not the equivalent for a rich person, who can save the bulk of their income.

Therefore it is fair and not misleading to include sales tax as an additional part of income taxes for the poor. And it's correct to say that poor people pay more than the rich in taxes.

Because of the way the tax system is structured, someone making around 100k a year is taxed most heavily, then less and less in either direction away from that point.


no. the poor pay about 10-15% in income tax, then about 7-9% in sales taxes.


Social security is 15% of a poor person's income alone. Medicare is another 6%. At 30k/year, you additionally pay 13% federal income tax. That means that the amount of money from your paycheck going to the federal government totals 34%.

A poor person making $30k/year is paying 34% of their income to the federal government, before any other taxes. It's not all officially named "income tax", but it's paid as a percentage of income which meets the definition of an income tax. (http://www.google.com/search?q=define%3Aincome+tax&ie=ut...)


Where are your numbers coming from? The employee's social security tax is 6.2%, and medicare is 1.45%.

You can argue that the employee indirectly pays the employer's portion as well, but you specifically said that 15% comes "from your paycheck," which is wrong.

For the record, I think even my numbers are unconscionably high.


Unless you don't believe that wages are set by the market, the employer's portion definitely comes from your paycheck. If you dropped the social security tax on the employer side, wages would rise (the employer doesn't care whether the money goes to the government or the employee). It's effectively an income tax. The accounting is slightly different, but that's just the name we give it. You can see another example of this in that the self-employed pay the full tax - in the limit of one person, the lack of a distinction becomes obvious.

http://www.ssa.gov/OACT/ProgData/taxRates.html


Doesn't your 10-15% ignore social security and medicare taxes?




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