taxation

[BigV]

Hey Clodfobble, I'd like to see a cite for your position there. I'm looking now for a easy, clear explanation myself, but it is my understanding that our system does NOT work that way. We have a progressive system of income taxation, meaning the statutory rate increases for increasingly large levels of income, just like ZenGum outlined in post #72. That's where the phrase "tax brackets" comes from.

I'll post again when I have a source more reliable than wikipedia.

[DanaC]

Ahhh. Now I understand why people like Merc get so upset about the idea of a 50% bracket.

Over here the increased percentage only applies to the income that sits in that bracket.

[Happy Monkey]

Clodfobble is incorrect.

[classicman]

WHAT DID YOU SAY!?!

[glatt]

I don't think this has ever happened before.

[classicman]

I'm very concerned. 2012 is right upon us... this could be yet another sign

[BigV]

Yes, Clodfobble is incorrect, this time.

According to the IRS (Internal Revenue Service) we have six tax brackets. Here's a link to the Rate Schedule (a listing of the tax brackets).

2010 Tax Rate Schedules

Step one, find your taxable income. It will be a single dollar value.

Step two, find which ONE range into which your taxable income fits among the six choices below.

It is either:

If your taxable income is between $0 and 8,375, the tax owed is:
$0
plus
10% of the amount over $0.

-OR-

If your taxable income is between $8,375 and 34,000, the tax owed is:
$837.50 (10% of the income between $0 and 8,375)
plus
15% of the amount over 8,375.

-OR-

If your taxable income is between $34,000 and 82,400 the tax rate is 25%
$837.50 (10% of the income between $0 and 8,375)
$3843.75 (15% of the income between $8,375 and 34,000)
plus
25% of the amount over $34,000

-OR-

If your taxable income is between $82,400 and 171,850, the tax owed is:
$837.50 (10% of the income between $0 and 8,375)
$3843.75 (15% of the income between $8,375 and 34,000)
$12,100.00 (25% of the income between $34,000 and 82,400)
plus
28% of the amount over $82,400

-OR-

If your taxable income is between $171,850 and 373,650 the tax owed is:
$837.50 (10% of the income between $0 and 8,375)
$3843.75 (15% of the income between $8,375 and 34,000)
$12,100.00 (25% of the income between $34,000 and 82,400)
$25,046.00 (28% of the income between $82,400 and 171,850)
plus
33% of the amount over $171,850

-OR-

If your taxable income is $373,650 and up the tax owed is:
$837.50 (10% of the income between $0 and 8,375)
$3843.75 (15% of the income between $8,375 and 34,000)
$12,100.00 (25% of the income between $34,000 and 82,400)
$25,046.00 (28% of the income between $82,400 and 171,850)
$66,594.00 (33% of the income between $171,850 and 373,650)
plus
35% of the amount over $373,650.

It looks complicated, but it isn't. The chart at the IRS consolidates the "taxes owed" into one aggregate figure, which I have broken out here for clarity. You can add up the individual amounts in the lower tax brackets and come up with their total. This clearly shows that our system is a progressive one, where the different ranges of income are taxed at different rates. Even Warren Buffett pays the 10% rate (on the first $8,375).

[infinite monkey]

Well, that's it then. The internet is over. Go on home.

[BigV]

Originally Posted by Clodfobble

Not the American one, at least. In the American system, the end-count of your income determines which percentage bracket you're in, and that percentage applies to all of the dollars. So in a pure count with no other factors, a person making $99,900 a year would indeed take home more than the person making $100,000.

But of course there are tons and tons of deductions, which lower the end-count of what counts as your "income," and there are credits, where the government just gives you a certain amount back regardless of what percentage you are at, or whether you even owe that much in taxes in the first place, and there are deferred taxes, and certain types of money taxed at special rates, etc., etc....

and multi quoting many others...

Dear Clodfobble,

I wish to use this mistake of yours as an example. Please don't take it personally, I assure you there's a genuine, albeit backhanded compliment here. I admire you greatly and I think you are a very smart person. Not just intellectually, but I also believe you are well informed about lots of things, politics included.

That someone as smart and well informed as you could be mistaken about this is, to me, a clear sign of the degree of misinformation out there. Think, people! If CF could be mislead, how can we mere mortals have any hope of discerning reality???!!!

Seriously, it's no biggie, but it does show that our system is very complicated (we haven't begun talking about different kinds of "income", deductions, etc etc), and the rules that make up this complication are made by the people with the money, not by us working joes and jills. In whose favor do you believe those rules have been written? In the clamor for change we're subject to now, who will benefit? These are hard questions. It is crucial to listen and pay attention.

[Clodfobble]

Y'all are so weird. I'm wrong all the damn time! I should start a thread in which I chronicle all the things I am wrong about on a daily basis.

ITEM ONE: just this morning, I insisted to Mr. Clodfobble that I would have to make a separate trip to Home Depot, because no way did Target carry toilet seats as he thought they might. But in fact, they do, and I got one.


I'm pleased to learn the tax system doesn't work the way I thought it did, though. I use an online program to calculate all that shit for me. For what it's worth, I do know the medical deduction rules backwards and forwards.

[classicman]

just to bitch a bit (taking the heat off Clod )




I wish it were that simple. In some cases it is... in many it is not.

What happens when the standard deductions and child credits and EIC and a host of other deductions are added, especially to that person at the bottom? They actually get money back. In some/many/most (???) it is more than they put in. I know this from personal experience. Effective tax rate??? Its a negative - They actually make money.

[infinite monkey]

Don't freak out people, but I'm agreeing with classic.

I've seen thousands of tax forms. A whole hell of a lot of people make a profit.

Yeah, yeah, it costs money to raise kids. But I didn't get anybody pregnant.

(Don't get me wrong and don't get mad. I love a good family.)

I could go with zero tax liability. Get back what came out of your check. But 6000 dollars in PROFIT? Reeeeediculous.

[classicman]

ok, forget it I changed my mind.

[infinite monkey]

*snicker*

[classicman]

oh and that "taxable income" BigV ... that's AFTER a bunch of reductions and adjustments as well.

I think the proposal was "income" period. If you made it, we tax it - no matter how it was generated.