The US and Australian dollars are roughly equal. These are hypothetical taxpayers of course.
1. A works on a factory assembly line and earns $36,400 per year, pays income tax of $3,400 and has take-home pay of $33,000.
2. B is an office manager earning $60,000, paying tax of $12,000 and taking home $48,000.
3. C is a self-employed property salesman earning $150,000, paying tax of $43,000 and taking home $107,000.
4. D is in the same position as C, but as it's a family business he can engineer his tax rate to be lower - $26,000 - and take home $124,000.
Their effective tax rates are 9%, 20%, 29% and 17%. It is extremely difficult to engineer a lower tax rate without resorting to the "tax minimisation" industry and some very risky investment packages. There's also a catch-all tax avoidance law which states that any activity for which there can be no purpose other than tax reduction shall not be permitted to reduce the tax bill - innocent until proven guilty, but there have been a lot of successful prosecutions nonetheless.
I read all kinds of stuff about US personal income tax rates, and keep hearing that only the lower paid workers pay realistic taxes. I like to inform myself with actual data, so if anyone can tell me where to look for similar information I'd appreciate it.
Originally posted by Kewpiehttp://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=456
The US and Australian dollars are roughly equal. These are hypothetical taxpayers of course.
1. A works on a factory assembly line and earns $36,400 per year, pays income tax of $3,400 and has take-home pay of $33,000.
2. B is an office manager earning $60,000, paying tax of $12,000 and taking home $48,000.
3. C is a self-employed property salesman ea ...[text shortened]... ual data, so if anyone can tell me where to look for similar information I'd appreciate it.
http://www.usatoday.com/money/perfi/taxes/story/2012-01-19/romney-tax-rate/52682372/1
http://blog.heritage.org/2012/02/19/chart-of-the-week-nearly-half-of-all-americans-dont-pay-income-taxes/
http://www.cbpp.org/cms/index.cfm?fa=view&id=3505
Rates are typically much lower than appears from the published rates because of enormous deduction opportunities and the earned income tax credit.
http://www.irs.gov/individuals/article/0,,id=96466,00.html/
Looking through those figures, it seemed that Americans generally have much lower tax rates than Australians. The figures I quoted are like your "effective tax rates", we don't have any real allowable deductions, and the low-income tax credit is smaller than your EITC. We also pay our own health insurance, employers never do, although they will allow payroll deductions for it. Australians rarely complain about their personal tax and I wonder why Americans do. Perhaps it's just that the media are so very good at puffing up a few complaints to make an avalanche.
This from 2010: http://www.businesspundit.com/12-countries-with-the-highest-lowest-tax-rates/
Originally posted by KewpieComplaining about taxes is an American past time as much as baseball and apple pie. Tax rates in the US are too low across the board.
Looking through those figures, it seemed that Americans generally have much lower tax rates than Australians. The figures I quoted are like your "effective tax rates", we don't have any real allowable deductions, and the low-income tax credit is smaller than your EITC. We also pay our own health insurance, employers never do, although they will allow payrol ...[text shortened]... is from 2010: http://www.businesspundit.com/12-countries-with-the-highest-lowest-tax-rates/
Originally posted by sh76Not just a pastime, but the very reason we are a nation. The slogan no taxation without representation was one of the seeds of the American revolution. By the time that Toqueville wrote Democracy in America, most taxation and government was at the local level, and America was progressing quite nicely.
Complaining about taxes is an American past time as much as baseball and apple pie. Tax rates in the US are too low across the board.
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Originally posted by normbenignNorm, the world has moved on a bit since then - it seems like you have been sleeping like Washington' Irving's Rip.
Not just a pastime, but the very reason we are a nation. The slogan no taxation without representation was one of the seeds of the American revolution. By the time that Toqueville wrote Democracy in America, most taxation and government was at the local level, and America was progressing quite nicely.
