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Politics : Don't Blame Me, I Voted For Kerry -- Ignore unavailable to you. Want to Upgrade?

To: Logain Ablar who wrote (10644)	3/29/2004 8:18:50 PM
From: Lizzie Tudor	Read Replies (1) \| Respond to of 81568

I include the 15K fica with the individual. No deductions possible on that tax.

To: Logain Ablar who wrote (10644)	3/30/2004 5:25:26 AM
From: tonto	Respond to of 81568

Tim, thank you for taking the time to run the numbers. Lizzie: Sometimes one has to be careful and can't believe everything being published. You have to actually do the numbers. In your Example Taxpayer B not only has a higher effective tax rate, 32.5% versus 31.1% BUT also pays $24,002 or 96% more in taxes than Taxpayer A (on 88% higher income). Taxpayer A @ $80,000. Single, no itemized deductions. FICA / MEDICARE of $6,120 FIT of $14,969 SIT of $3,800 (CT tax not sure of CA) Total of $24,889 Eff rate of 31.1% Taxpayer B @ $150,000. Single, only itemized is if SIT is over threshold. FICA / MEDICARE of $7,569 FIT of $34,022 SIT of $ 7,300 Total tax of $48,891 Effective rate of 32.5%. The higher you go the higher the tax. Taxpayer C @ $300,000 Single, only itemized is if SIT is over threshold but is actually limited to $9,985 and no exemption (phased out). FICA / MEDICARE of $9,744. FIT of $83,276 SIT of $14,800 Total tax of $107,820 Effective rate of 35.94% Taxpayer C is actually paying 333% more in taxes than Taxpayer A [$107,820 / $24,889 - 1) on a 275% increase in income. You can double check my calculations, they are based upon the 2003 income tax rates with the 87k fica threshold. The higher earner pays MORE in taxes NOT LESS. BOTH ON A PERCENTAGE AND ABSOLUTE BASIS. FICA MEDICARE is only the employee contribution, not the company / employer match (although if self employed it would make sense to include it). [Note I'm not conceding the FICA / MEDICARE premiums are true taxes, although readily admit this is the path our politicians have led us since the programs inception nor am I going into a discussion on how Taxpayer A will receive more benefits from SS on retirement % wise to his salary than B or C]