Chris Crawford wrote:
> Andrew, the base federal income tax rate for a middle class person is 28%.
> The federal income tax in the US varies in rate based on income. The lowest
> rate is 10%, the highest is 39%. Most middle class people pay 28%. On top of
> that, EVERY American pays an additional 14% social security tax. If you're
> employed, your employer pays half of it, and the other half of the SS tax
> comes direct from the employees paycheck. If you're self employed, you pay
> the full 14% yourself. It could be argued that even those who have jobs pay
> the full amount since the employer could use that money to increase the
> worker's pay. So, if you pay 28% income tax PLUS 14% social security tax,
> that makes 42% for middle class Americans.
>
--
Actually the US tax "rate" is graduated, so that for a single person,
the 28% is only paid on TAXABLE income ( i.e. reduced by the standard
and myriad other deductions) above $74,200.
Also the SS tax, if 14%, (too lazy to google that) is not paid on all
income but only on income up to a capped amount.
Our tax code is complex to say the least, far removed from the concept
of a "tax rate" where one would generally think in terms of rate on
gross, or a simply calculated net income.
For example see
http://www.savewealth.com/taxes/rates/2006/single/
for the details.
Russ Butler (NJ USA)
==============================================
List usage info: http://www.zuikoholic.com
List nannies: olympusadmin@xxxxxxxxxx
==============================================
|