The Big Tax Question

I don't know why I bother, but see if you can understand this. I am sure that $45,000 is not truly the average, but it is close. I am sure that 35% inflation probably is not dead on, but it is close. And I am sure that his tax basis is not exact, but it is also close. Regardless, any resonable numbers substituted will give similar results. BTW, his taxes are exactly correct for the previous assumptions

10 years ago, John Doe Average made $45,000. After deductions, his tax basis was $35,000 (called AGI over here). Using your tax rates (the actual current rates), he would pay $4,875 in taxes. That means he paid 13.9% of his income as taxes. 10 yeasrs later, there was 35% inflation. That is about average (meaning it is about 3% yearly). Now John Doe Average now makes $60,750. After deductions, his tax basis is $47,250. Using your tax rates, he would now pay $7,938 in taxes. That means he paid 16.8% of his income as taxes. 10 years from now and another 35% inflation, John Doe Average will make $82,012. After deductions, his tax basis will be $63,788. Using your tax rates, he will now have pay $12,0728 in taxes. That means he paid 18.9% of his income as taxes. And this goes on year after year, decade after decade.

You will notice that the average tax rate paid by us went up 35% even though John Doe Average is still making the same average salary so far as it relates to his normal daily spending. Everyone else's salary and cost did exactly the same thing. The only way to keep him paying the same actual rate is to do what everyone calls cut the taxes, but sometimes it is not really a cut.

This is your one and only shot. If you cannot follow this, sorry.

 

You realy do make yourself out to be stupid dont you? do you do it as a act or are you actualy as stupid as you sound??

What bit of Individual earnings changing did you not understand???? You were able to read that wernt you that if your earnings go up you move into another tax bracket but the tax brackets have not changed your earnings have!!

Inflation does not change tax bands never has and never will tax bands are changed by goverment

Do you even know what inflation is? wages do not automaticly rise with inflation Shall I explain to you what it is??
Inflation is the increase in the price of goods and services year on year and the coresponding purchasing power of your cash be it ££ $$ or yen Did your wages get reduced in 2009? well according to your economic model they should have as the US had Negative inflation for that year

 

The old farmer told me that there are only three things you need in this life: Food in your belly, a roof over your head and a car to get around in and everything else is gravy.

 

Suppose you have the following tax brackets
$0.00 to $1000.00 tax rate 0%
$1001.00 to $2000.00 tax rate 10%
$2001.00 and over tax rate 20%

You sell widgets for a living at 10% commission. Widgets sell for $1.00 and you sell 10000 and earn $1000.00 for the year. Your tax liability is $0.00.

Ten years later you are still selling widgets for a living at 10% commission. The price of widgets has risen to $2.00 and you sell the same number of widgets (10000) and earn $2000.00 for the year. Your tax liability now is $100.00.


Nothing in the above examples changed except the selling price of widgets. The tax brackets stayed the same. The tax rates stayed the same. Your commission rate stayed the same. The number of widgets sold stayed the same. The number of hours worked to sell the widgets stayed the same. The relative economic value of widgets to other goods and services stayed the same. Yet the amount of tax owed increased.

If you do not adjust the range of the tax brackets up or down based on the impact of inflation you change the effective income tax rate paid by individuals. And yes it really is simple math.

 

Your Individual earnings have changed not the tax brackets! how difficult is that to comprhend?

Tax rates/bands/levels are set by Goverment not by what the inflation rate is

all tax brackets were lowered in 2001 through 2003 (By the GOVERMENT) yet strangly inflation went up in each of those years

2003 +2.27%
2002 +1.59%
2001 +2.83%

In 2009 Inflation went down to -0.34%

did that affect your tax bracket? or did it mean your money went a little further in the stores?
The amount you pay is set by Individual earnings not by inflation or the tooth fairy


The price of your comodity has risen by a % due to market prices rising this is what inflation is you can purchase less with your dollar year on year (as a rule)

What part is elluding you?

Come on tell me
is the tax rate set by Goverment a simple yes or no?

Is the amount of tax paid set by the amount you earn a simple yes or no?

You keep on telling me that I am wrong now with those 2 simple questions prove it

 

Oh and by the way I never gave any tax rates figures I gave you a list of the diffrent tax bands within the US so were on earth you made those figures up from I dont know

 

I guess telling you "his taxes are exactly correct" since that is what I did in post #61. I guess telling you I used "the actual current rates" since that is what I said in post #61. I also told you that "is your one and only shot", so I guess you will have to use you imagination. You obviously would not believe me regardless of what I say.

 

What exactly is your qualifications in economics? me I have a BA what do you have? and I notice you have avoided answering my 2 very simple questions whats the problem cant you figure out a way to waffle with a simple yes or no so I will repeat them for you

Come on tell me
is the tax rate set by Goverment a simple yes or no?

Is the amount of tax paid set by the amount you earn a simple yes or no?

You keep on telling me that I am wrong now with those 2 simple questions prove it

There same 2 questions that you have repeatedly told me I am wrong about now prove it
Lets see you back your words up with simple facts LOL

Hell you didnt even know what a Economic Liberal was did you LOL

 

That line does not work on this forum Steve. I have a BS in Metallurgy from one of the top Engineering schools in the country yet TomCorona thinks my analysis of the structural failure of the WTC towers on 9/11 is some kind of voodoo. In other words, credentials mean nothing to lunatics. Your red text is more compelling than your credentials.

 

Lol night all

 

Party pooper!

 

Gee you would think the old farmer wouldnt even need a car. It is kind of a luxury. He must be a new age old farmer.