Even if I take you at face value and say you paid an effective tax rate of 43.92% on an income of USD 650k+ (or USD 279.5k+ which I still contend nobody does, unless you do some kind of shady math including all your property taxes and sales taxes and all kinds of nonsense), can you really say with a straight face that people making USD 650k+ a year, year after year are part of the middle class?
Who is in the upper class? Just the thousand or so billionaires?
I'm confused what you're getting at. First you say 40% income tax isn't a thing for the wealthy then you refute that this person who pays 40% income tax isn't wealthy? Their response was to say that they aren't part of the upper class, who we're saying are those who have enough wealth to protect most of their income from taxation
You might as well make yourself clearer & instead of saying the wealthy don't pay 40% taxes, just straight up say "dgildeh, you're a liar, you don't pay that much in taxes, post your tax records to prove yourself"
That's Fussellian upper-middle. Enough to send three kids to $70k/yr private boarding school and from there to an elite university, enough to have a sailing hobby, enough to take annual family ski trips in the Alps. But you're still working for a living, and can't retain a fancy lifestyle if you stop.
> But you're still working for a living, and can't retain a fancy lifestyle if you stop.
Personally, I’d say if you are a wage slave like me regardless of how much you earn, we can’t afford to have any children.
I can’t say you have not been warned. The signs have been there all along. Remember how much trouble HRC go in for just the title of the book, it takes a village. It is not your responsibility alone to make sure you have happy, healthy children who will become productive members of society later.
If you have zero income as soon as you stop working and waste your money on private school for your kids, I say it is in the same category as buying a yacht and a jet ski. Just incredibly dumb things you can’t afford. Can you imagine how much pain you will cause if you need to withdraw your kids from school if you have a stroke? Ffs stop sending kids to private schools!
We and our parents are getting older every day. How will we pay for our and our parents’ health care cost? I don’t have the courage to say just pull the plug if something happens to me and my end of life care costs more than USD 200k.
Don’t worry about the bigger picture of who will take care of society when we are older. Screw this society. In any case, can you really trust your kids to take care of you when you are old if you don’t have any savings of your own?
Instead of worrying about middle vs upper etc consider these things:
- that is all income and it really is taxed at the rates described, it is crushing the amount of tax I/we pay as wage earners
- CA (where those salaries exist) is really expensive, like $4500/mo for daycare, so despite having a high income it feels no higher than somebody making half as much elsewhere
- the truely wealthy derive their cash flow from investments which are taxed at half as much, or own businesses and deduct expenses to effecting 0%
So the effect is if you have high income you are inescapably taxed very high (and are ineligible for almost all govt inventories) resulting in an effectively much lower cash flow, meanwhile the wealthy have a lower effective tax burden for the same or higher standard of living.
Ideally, I’d like to see an end to all silly credits, deductions, and exemptions and things like that.
It is absurd to me that you would want to not pay taxes on your daycare expenses. I think the proper solution is for the state to offer free of cost (actually free of cost, no hidden charges) daycare for all children. This is just the tip of the iceberg though. We are just overly against supporting all parents. All children, regardless of income or assets, should have access to WIC and ideally we should increase WIC age to eighteen. We should remove income, assets, means testing from all entitlement programs.
> the truely wealthy derive their cash flow from investments which are taxed at half as much, or own businesses and deduct expenses to effecting 0%
The upper class doesn't work - it owns. Maybe some top executives of global corporations can be considered upper class, but usually most of their wealth comes from ownership of stock.
The problem isn’t that you are paying too much in taxes. Your taxes are fine. The problem is the super wealthy aren’t paying their share of taxes. Don’t get mad at me. Get mad at the top 0.01% and their cronies. Look at how carried interest died again in Congress.
Also, we can and should fix the tax system so any state income tax you pay reduces your federal income tax bill. So for example, in your case, the ten percent or so that you pay to California (or the flat four percent in case of Colorado) gets effectively paid back to you by the federal government (even if you choose standard deduction). This would immediately give you a little breathing room. This would also encourage states from artificially keeping their income tax low.
Ideally I’d like to see an end to all credits, deductions, and exemptions but I don’t see it happening so this is pretty much the best I can think of…
That and either California needs to repeal the idiotic prop 13 from 1978 that from what I understand keeps property taxes artificially low or we need to enact a federal property tax of about 7% (and effectively exempt the equivalent of a national median two bedroom unit per owner/co-owner). That’s a conversation for another day. For now let’s focus on federal income tax.
I don’t know how to solve this wealth tax problem.
Since you shared your withholding, let me share a metric that everyone in the US can agree on:
Divide line 24 by line 1a (not line 9!!!) and multiply it by 100. Forget about all the other things you pay. We paid under 16 percent in 2022 and under 22 percent in 2021. Do not include Medicare. Do not include state taxes. Just do plain simple math with the FIT. (You don’t need to share the final number here. It is just for you.)
Who is in the upper class? Just the thousand or so billionaires?