THE PERSONAL TAX BILL YOU EMPLOYER
Income tax (highest rate on top bracket, normal) - Fed 28.0%
Income tax state (assume California, adjusted for Fed deduction)) 4.0%
Social security tax 6.2% 6.2%
Medicare 1.45% 1.45%
State (California) disability insurance 1.1% 1.1%
Unemployment insurance _____ 6.2%
If you're self-employed, you have to also pay the employer taxes on your net income, so you are paying a base tax of about 15% on your income before income taxes.
The maximum wage base for computing FUTA tax is the first $7,000 of each employee's gross pay.
Capital gains and investment taxes, kept low in order to be stimulative for growth in the economy, are 15%.
SOMETHING FOR NOTHING
Percentage of households paying no income taxes: 38% 2007 47% 2009
"We have 50 percent of people who are getting something for nothing," said Curtis Dubay, senior tax policy analyst at the Heritage Foundation.
WHO PAYS THE TAXES AND HOW MUCH?
To put it simply, of the $832 billion in personal income taxes collected in 2004, the richest half of the country paid $804 billion while the poorest half only paid $27.4 billion.
IRS data shows that in 2004, the richest 50% of the taxpayers paid 96.7% of all income taxes.
From 1986 to 2004, the share paid by the richest half increased from 93.5% to 96.7%, and the share paid by the richest 1% increased from 25.75% to 36.89%.
Top 10% of earners pay this portion of federal taxes: 73%
The top fifth of households made 56% of pre-tax income in 2006 but paid 86% of all individual income tax revenue collected, according to the most recent data available from the Congressional Budget Office...
Less paid by poorer half
At the same time, the amount paid by the poorer half decreased from 6.5% in 1986 to 3.3% in 2004. While the poor's contribution was cut in half, the richest Americans saw their contribution increase by nearly 50%. When you get past the propaganda, for the last two decades the rich have been paying more and more while the poor have been paying less and less.
The Tax Policy Center estimates that for 2009, 43% of tax units (most of which are lower income households that may or may not file a return) will have no income tax liability or will have a negative income tax liability, meaning the government will actually pay them.
THE TRUTH ABOUT BUSH TAX CUTS AND THE RICH
While the Bush tax cuts lowered taxes for all Americans and added about 10% more in Americans who would pay no taxes at all, the percent of the overall tax burden that is paid by the wealthiest increased - but people don't see this. It only makes sense that if someone pays $50,000 in taxes that he would get a bigger deduction in dollar terms than someone who pays $5,000 in taxes. (This is a "duh!", but most people fail to think about it.)
THE EARNED INCOME TAX CREDIT
2009 over 25 million people received nearly $58 billion in EITC. IRS
This is a tax credit (can get a refund of all of your taxes paid, plus).
If you me the minimum income to get the maximum credit and had three children, you would earn
$12,780 plus get a credit of $5,751. Try living on that income with three children!
The poverty level is $18, 310 for a family of three living in the United States. At that, you'd have to
Apply for rent assistance (HUD)
Apply for Supplemental Nutrition Assistance Program
Apply for assistance with electtric, heating and utility bills
Apply for Lifeline telephone assistance
See others at ehow.com. See also Wikipedia.
Who are the food insecure? Prevalence rates of very low food security were 5.7-percent national average .
Earned Income Credit (EIC) is a tax credit available to low income earners. In some cases the EIC can be greater than your total income tax bill, providing an income tax refund to families that may have little or no income tax withheld from their paychecks. For tax year 2010, the maximum EIC for a person or couple without qualifying children is $457, with one qualifying child is $3,050, with two qualifying children is $5,036, and with three or more qualifying children is $5,666.
EIC follows a pattern of going up a hill, traveling along a plateau, and then going back down the hill more slowly than it went up. For example, a married couple with two qualifying children and yearly income of seven thousand dollars will receive EIC of $2,810 (going up the hill). At fifteen thousand dollars, this couple will receive EIC of $5,036 (plateau). And at twenty-five and thirty-five thousand dollars, this same couple with their two children will receive EIC of $4,285 and $2,179 respectively.
The EITC is the largest poverty reduction program in the United States. Almost 21 million American families received more than $36 billion in refunds through the EITC in 2004. These EITC dollars had a significant impact on the lives and communities of the nation's lowest paid working people, lifting more than 5 million of these families above the federal poverty line
In 2006, 22 million households received a total of $41.2 billion in reduced taxes and refunds. Source: TaxPolicyCenter.org. “But enthusiasm for the credit has blinded policy makers to its problems. The EITC program is dominated by fraud. Year after year about one-third of all EITC returns are based on illegal multiple returns, phony Social Security numbers, or claims of non-existent children or spouses. A disproportionate share of illegal alien households receives the benefit. Source