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leaving the question:

leaving the question:

Posted Oct 1, 2008 16:40 UTC (Wed) by drag (guest, #31333)
In reply to: leaving the question: by ekj
Parent article: Zen and the Art of the Six-Figure Linux Job (IT Management)

> My wife and I are fairly average bachelors (me in comuting, she in finance) with a combined gross of about $150K, this is sufficient that our tax-rate is at 28%. I actually don't think that's so ridicolously high when you consider that that rate INCLUDES all the extras like health-insurance etc. (i.e $150K - 28% is what we get in a year)

Well welcome to the top-end side of the income bracket. How does it feel to be the 'wealthy' folks that the Democrats complain about not paying enough taxes? :)

Taxes are like.. hotels.. If you go to a high end hotel they have charges for everything. Room, room service, television access, internet access, parking, etc etc. Even if your careful you'll easily run up at least 100-200 dollars in extra charges over a weeks time.

So adding up how much you pay in taxes is actually very difficult. Depending on your outlook at life and your view on how finances work then the amount of taxes you perceived you pay can be very different.

30-40 is probably very conservative. I don't know for certain, I am about as far removed from being a accountant as I can get (although my dad was a accountant for many many years)

So...

You get a paycheck.
You get a certain percentage withheld for federal income taxes. And again for State tax.

But then you pay social security taxes. There is a trick to that though... The amount that social security tax you see on your paycheck is only half of what is actually taken out... or more accurately only half of it appears on your paycheck. The government back in the day figured out a marketing scheme were it made it sound like they were forcing your boss to pay for your retirement. "Power to the people" sort of semi-scam. They say, paraphrasing, that your employer has to match your 'contribution' to social security. Well that's all find and dandy sounding, but all it means is that it cost your boss more money to hire you and it costs more give you promotions.

(in fact for you and your wife you may have a income of 150K, but it probably costs closer to 300K to keep you employed, but lots of that doesn't have anything to do with taxes)

So with social security you get half of it taken out of your income pre-paycheck, and then the other half you see is taken out 'post-paycheck' (for lack of a better term).

Then depending on your location there are probably various state and city regulations that require your employer to pay for different things based on the amount of employees they are hiring. (I don't know the details, having never hired anybody) So that is another cost that is taken out of your income that you won't see.

Then you pay sales tax whenever you buy anything. You also have to pay taxes on your mortgage, and then you have to pay taxes on your property. Then you have sales tax on your automobile, and registration taxes, and licensing taxes, etc etc.

Then on top of your income taxes, any money you reinvest into other things you have to pay a second tax when you cash in your investments.

Then if you want to into it further corporations in the USA pay taxes, (which I think Norway is much better about btw) The tax rate for them is about 40%.

Well corporations don't actually pay taxes in a national level. Taxes they pay only affects them negatively on a international basis(causing them to run to other countries in Europe and Asia with much lower tax rates), and maybe raise inflation at a more rapid pace in a national level. However if you only view things in a national level then mostly all it does is cause the corporations to simply mark up their prices to compensate for money they have to pay for the government. They want to maintain their profits and all their competitors are paying the same taxes so it's something that really doesn't affect them in a any noticeable way. (and yes there are lots of games corporations pay to 'get around' paying taxes, but it's just shuffling papers around. They'll have to pay eventually. Just because they don't pay taxes in 2007, doesn't mean that they don't eventually pay for 2007 taxes)

So if a corporate tax is 40% then that means you pretty much have a 40% markup on all goods and services you purchase. So that's a pre-sales sales tax, if you want to look at it that way.

I am no accountant and the whole tax system in the USA is very bewildering, but the government has a tendency to nickel and dime you for every little thing you want to get done.


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leaving the question:

Posted Oct 2, 2008 6:08 UTC (Thu) by ekj (guest, #1524) [Link] (2 responses)

You babble. Yet you refrain from reading that to which you are responding.

Hint: We're not in the "top-end side" of anything. "Democrats" aren't relevant to our life. There is nothing "federal" in my life. Nor is the government of USA particularily relevant, except parts of their foreign and trade-policies.

There are no "city regularions", there are no "taxes on my mortgage" (infact the reverse is true, I get a tax deduction equal to 28% of the interest I pay) There are no "social security taxes", nor are there any personal taxes where the employer has to "match" my contributions.

Infact that's the main thing to like about the tax-system here; it's simple. Very very simple. Few exceptions. No nickle-and-diming. You pay tax, that's it. Gross minus tax equals net. (full stop)

The world -- and Lwn -- is bigger than USA. Not *everything* you read here is automatically US-centric, I spesifically said I'm from Norway. Your answer migth have been relevant -- if I was from USA.

leaving the question:

Posted Oct 2, 2008 16:38 UTC (Thu) by jalan (guest, #45659) [Link] (1 responses)

You're misunderstanding drag's use of the word 'you'. Please substitute the word 'one', or 'I' and his intent may be more clear. People (here in the U.S., at least) often use 'you' colloquially when they mean 'people in general' or 'me'. I'm certain he didn't not mean you, ekj, personally.

leaving the question:

Posted Oct 2, 2008 16:55 UTC (Thu) by ekj (guest, #1524) [Link]

Don't think so. When someone says "for you and your wife" I assume they mean you as in the singular, not as in the plural, general, especially when he also included the income-figures I quoted for us.


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