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Real Tax Day: June 18th





jmi256
Taxes represent a portion of taxpayers’ work that the government takes from them involuntarily, effectively meaning they are working for the government rather than themselves for a certain part of the year. Each jurisdiction is different, but using New York as an example, a taxpayer making the median income* is paying a total of 46.42% in taxes, including federal, state, local, etc. taxes.

Aggregate Tax Rates
25.00% Federal Tax** (will rise to at least 28% after Bush tax cuts expire at the end of 2010)
9.77% New York State Tax
4.00% New York City Tax
6.20% Social Security Tax
1.45% Medicare Tax
---------------------------------
46.42% Total Taxes


That is almost half a year (a little over 169 days actually) the ‘average’ New York taxpayer spends working while the government receives the benefit of his labor before the he gets to keep a dime of his own money. So that means around June 18th, the state has finally taken ‘enough’ from the taxpayer and allows him to keep his own money.

If you want to break it down by workday, a taxpayer who works a 9-5 (assuming no lunch break) works until about 1:11 pm for the government and then gets to keep what is left over.

It gets worse once Bush’s across-the-board tax cuts expire at the end of 2010; the average New York taxpayer’s federal tax rate goes up to 28%. Some may think “hey, it’s only 3% more”, but all other taxes staying the same, the total tax now goes to 49.42%. That pushes the date when the government stops taking the average New York taxpayers’ money to around June 29th, 11 days later. Workday breakdown means the ‘average’ New York taxpayer works until about 1:27 pm every day for the government and then gets to keep some of his own money.

Of course this doesn’t take into account the massive tax increases that will be called for to pay for recent increased government spending. Eventually they will have to be paid for by taxpayers.


*Median income in NYC is $77,400:
https://www.efanniemae.com/sf/refmaterials/hudmedinc/hudincomeresults.jsp?STATE=NY&choice=msa&CITY=New+York&FormsButton1=Search

Meaning tax rate is 25%:
http://www.bargaineering.com/articles/2009-federal-income-tax-brackets-projected.html
ocalhoun
Well, the 'median' and 'average' New Yorkers are hardly the same, and New York is one of the more tax-happy local areas, but otherwise, good analysis.

It may well be quite different for a truly average income person in rural South Dakota though.
deanhills
Tax payers in Canada have been quipping about this for years, i.e. people work out technically on which date of the year they start working for themselves, instead of the Government. Ocalhoun is right of course, it may differ from place to place. Provincial taxes in Canada do differ from Province to Province. But jmi's calculations would be more or less applicable for Vancouver, BC, which is quite a high-cost environment to live in, like in New York. Then there is of course the nastiness of Sales Tax on all the items one buys in Canada. That probably needs to be calculated in somewhere. Initially it was supposed to be a temporary measure, but most taxes initially start as temporary, and then never go away, or just evolve into something different.
ocalhoun
deanhills wrote:
Then there is of course the nastiness of Sales Tax on all the items one buys in Canada. That probably needs to be calculated in somewhere. Initially it was supposed to be a temporary measure, but most taxes initially start as temporary, and then never go away, or just evolve into something different.

... and the gas tax and the phone tax and the cigarette tax and the inheritance tax and the property tax, ad nauseum.

One group did a study on it, and determined that the amount of money actually taken from an individual could tally up to around 65% of total income. (If I remember correctly; that was a long time ago.)

(At least in the US it's that way, does Canada also add many extra little taxes?)
deanhills
ocalhoun wrote:
(At least in the US it's that way, does Canada also add many extra little taxes?)
Definitely! And also ad nauseum. The one that rankles the most for some are cigarettes. There also seems to be discrimination as Indians from the reservations don't have to pay taxes on their cigarettes, so of course are also making a mighty trade in those, selling them at a discount to others as well as smuggling them over the border into the States to make good profits on them. But yes, calculations have been made of all the indirect taxes and like those in the US can easily get to a much higher percentage of total taxes. I can't remember the specific totals, but I vaguely remember those got to the sixties as well. Also, Canadians contribute heavily to charity programs as well. Feels like taxes sometimes, especially when they make it part of your salary deductions and you get a list of Charities and then have to tick off the ones you would like your salary deduction to go to. It then does not feel like contributing to charity any longer, more like voluntary taxes.
ocalhoun
deanhills wrote:
Also, Canadians contribute heavily to charity programs as well. Feels like taxes sometimes, especially when they make it part of your salary deductions and you get a list of Charities and then have to tick off the ones you would like your salary deduction to go to. It then does not feel like contributing to charity any longer, more like voluntary taxes.


Bad as that is, I prefer it over government-run charity programs.
At least you get to choose which charities to give to.
deanhills
ocalhoun wrote:
Bad as that is, I prefer it over government-run charity programs.
At least you get to choose which charities to give to.
Totally agreed. I prefer the charities also that are the smallest and most recognizable, as some of the Federal charities with large bureacracies are also like Government to me.
Dennise
Right On !!!

If only the general public could be made aware of this, they might rise up, shed their apathy, join forces and do something about it.

Good fodder for the Tea Party!
handfleisch
Dennise wrote:
Right On !!!

If only the general public could be made aware of this, they might rise up, shed their apathy, join forces and do something about it.

Good fodder for the Tea Party!

Wrong on. Here's a Bostonian educating the Teahadists before their party there in the basics on taxes and the commonwealth. You might want to take 2 minutes check it out


http://www.youtube.com/watch?v=ioUf2eUtXzU
jmi256
ocalhoun wrote:
Well, the 'median' and 'average' New Yorkers are hardly the same, and New York is one of the more tax-happy local areas, but otherwise, good analysis.

They aren’t exactly the same, but I think they can be used either way for the sake of making the analysis legible and not read like a technical document. But yes, it is one of the more tax-happy areas, and also one of the most liberal/progressive/whatever areas of the country. And predictably steeped in cronyism, corruption, etc. Coincidence?

And exactly what do we get for such high taxes? The city is dirty, and businesses have resorted to paying additional costs to keep areas clean to attract customers since the Department of Sanitation workers can’t handle the job; crime is still a problem despite one of the largest police forces in the world; public schools are producing children who can’t read, write or solve simple math problems (in fact I was speaking to a woman in her 20s - an NYC public school graduate - a few days ago who in all seriousness asked me if China was a state); the subway system is a mess with overcrowding, unsanitary conditions and ever-increasing fare hikes so that the union workers can get more money for sleeping in the booths; etc. I actually love the city for a host of other reasons and I understand it’s a sizeable task to run a city like NYC, but the government could definitely use some efficiencies and better management.


ocalhoun wrote:
It may well be quite different for a truly average income person in rural South Dakota though.

I picked NYC because that’s where I live, but it would be interesting to see how much out of the year taxpayers in other states are forced to work for the government. Either way, the federal tax rate eats up the highest percentage of a taxpayer’s earnings. And as he earns more, the rate gets jacked up so that he is working even longer for the government. NYC has a huge cost of living (not necessarily directly caused by high taxes), so when the government takes almost half of taxpayers’ earnings, it really has an impact.
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