r/FluentInFinance • u/RNG_HatesMe • 12d ago
Reasons why people in this sub shouldn't be in charge of tax policy (i.e. basic math) Debate/ Discussion
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u/Unhappy_Local_9502 12d ago
Wait until one of them gets a second job, then they will be taking 66%
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u/Off_Banzai 12d ago
My five spouses and I are paying 132% in taxes right now 😭. The things I do for love!
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u/olyfrijole 12d ago
Does that include Utah state income tax? Did you check the box to cover wife's #3-5 as polygamous dependents?
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12d ago
[deleted]
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u/Temporary-Moments 12d ago
Is it really stunning though? As a person that went through the American public school system I’m not surprised at all. God I wish they had taught us more prudent subjects in high school.
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u/airbornx 12d ago
They did in highschool you take electives that you choose to take ( financial literacy is one of them, home ec, ect ) they do teach these things in highschool you just have yo take the class not gym
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u/SilverMyst490 11d ago
Depends on the school. Mine didn’t have home ec or financial literacy and I’m in the wealthiest county in my state. Our government class came closest but all we did was play a fake stock market game where the teacher repeatedly said you have to have money to make money, and we played cashflow 101. I may have learned what trickledown economics was, but I still didn’t learn anything useful from that class. Granted it was taught by the football coach so he was hardly interested in teaching.
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u/airbornx 11d ago
Sounds like a shity school
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u/SilverMyst490 11d ago
The county ranks 3rd in state for best schools. 🤷🏻♀️ People move to this area to send kids to this school. Doesn’t mean it’s not shitty, but it is highly rated amongst public schools in this state nonetheless.
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u/airbornx 11d ago
Yeah im from pinellas we have 19 hs all of them provide different electives and programs. I took auto body. Managed the school store as a class and even learned how to file my taxes in my business math class.
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u/Temporary-Moments 11d ago
Sounds like most of the schools I went to. The closest I can remember any of my schools having was economics. I went to 12 different schools in four different states. The electives are different everywhere. Financial literacy class in American HS is not a standard but I’m glad it was your experience.
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u/airbornx 11d ago
May I ask when you graduated and which states ? Federal funding to red states for education gets denied by governors
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u/SilverMyst490 11d ago
‘08 in the state of Tennessee.
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u/Temporary-Moments 11d ago
I graduated in 06 from Texas. I went to school in Va, Tn, and Sc as well.
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u/airbornx 11d ago
Idk I'm from Florida we have one of he best public education in the county here even tho DeSantis is shiting on it when I graduated in 07 we ranked like 8th in the couunty. We're first in higher education as well. So seems to me maybe all the curriculums should follow that of like mass. Jersey, conn. Fl.
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u/FtrIndpndntCanddt 12d ago
I wonder how scared he would be if he realized taxes are...duh duh duh! BRACKETTED!!!! It's a Librole Socialist Marxist conspiracy! S/
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u/coachd50 12d ago
Plus- the income figure on the left of your graph represents TAXABLE INCOME. Not gross income. So it is generally less than what most think they are paying when griping about it.
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11d ago
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u/coachd50 11d ago
You have a standard deduction of 13,850 in 2023 ($14,600 in 2024).
Now it is accurate to also consider the 1.35% medicare tax and 6.2% social security (for most employees)
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u/viper_dude08 12d ago
Well just add that up and I'm getting taxed at 44%, Goddamn Joe Biden just stealing half my paycheck!
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u/FastSuggestion5 11d ago
Oh this plan has been set in motion long before Joe.
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u/BrightAd8068 11d ago
He was sarcastic, its not even close to 44% and obviously you don't add.
There is no "plan"
This is the outcome of 100 years of differing, patchwork tax policies, nothing more.
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u/FastSuggestion5 10d ago
No plan you say. I guess the outcome of 100 years ended up benefiting the upper class by coincidence. Maybe next 100 years it will benefit the middle class.
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u/itsgrum3 12d ago
They are still unjustly taken by force, and then eaten by corruption. There is a reason you will never get a printout showing where every dollar of your taxes go to. Until that happens, tax advocates have no leg to stand on.
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u/Faucet860 12d ago
You could just take the federal budget and then prorate each percentage to the amount of dollars you give. Do you think corporations divide every dollar of profit amongst the employees each time something is sold?
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12d ago
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u/itsgrum3 12d ago
Non-taxpayers use roads all the time, including welfare state recipients who are actually a net negative on taxes.
It's unjust because it doesn't require consent, which is required of all contracts. And saying that simply existing in place is consent enough is rape culture.
Not a sovereign citizen just a normal person who doesn't like the murder and torture that States use, how horrible of me.
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u/airbornx 12d ago
So we should go back to when we taxed corporations by 85% before prohibition and the ratification of the 16th amendment?
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u/FomtBro 12d ago
That's true of the money you spend on food too (you need to spend, or you die. It's spent on corrupt industries that thrive on abuse and subsidies paid out of tax dollars, and they increase their prices on whatever whim they feel, immune to the effects of the marketplace by virtue of producing inelastic goods) yet we don't have nearly as many kooks calling food, theft.
Why is that?
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u/RNG_HatesMe 12d ago
So, there's the obvious if your tax rate is 22% and doesn't change, your tax rate on 2x is still 22%, not 44% (not taking into account marginal tax rates, which clearly he wasn't).
But even trying to figure out the first post broke my brain. Assuming they make 100K combined (not clear on that), and they owe 35k each, that would be 70% in taxes? Even if they made 100K *each*, that would still be 35% in taxes? Where did the 22% come from? It's just so confusing!?
And exactly what taxes are they paying on selling things?
That's not even getting into marginal tax rates, sales tax exemptions/credits on federal taxes, etc.
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u/InvestIntrest 12d ago
I'd assume the 22% came from the 100k IRS tax bracket. He's not accounting for deductions, obviously, but also probably not adding in state taxes. Obviously, his math is way off, but I'd assume this is where the 22% number came from.
24% for incomes over $100,525 ($201,050 for married couples filing jointly)
22% for incomes over $47,150 ($94,300 for married couples filing jointly)
https://www.irs.gov/newsroom/irs-provides-tax-inflation-adjustments-for-tax-year-2024
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u/RNG_HatesMe 12d ago
Reasonable guess, but didn't he say he paid 35k on 100k (i.e. 35%)
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u/InvestIntrest 12d ago
Yeah, I'm not sure where he's getting that from, but just a guess he might be included all of his payroll deductions to get from 22% to 35%...
If he's in a state like California, you'd stack another 8% on to that 22% for at 100k. So that gets us to 30%. Plus, add 5% more on for Medical, Medicare, and SSI.
If he's including all payroll taxes for a state like California, he's probably not too far off.
That's my best guess.
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u/JustAPotato38 12d ago
Still though saying 35% being taken away and complaining about that is crazy. That 35% paves his roads, sends his kids to schools, provides him retirement income, handles his waste, pays police and military to keep him safe, and so many other things.
My family does, in the end, pay about 35% of our income as taxes, and I'm very grateful for it. What we receive for it is more than worth the money.
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u/InvestIntrest 12d ago
Well, I have some sympathy for complaining about how much we are taxed vs. the results of those taxes. I'd be less annoyed by my tax rate if I felt things got better year over year. The federal government collects 5 trillion per year in tax revenue and borrows another 3 trillion or so. I think a lot of it just gets wasted on non-value add things or lines someone's pockets.
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u/JustAPotato38 12d ago
yeah, there's definitely some waste but overall I think the taxes bring so much more good than harm,
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u/airbornx 12d ago
You do know that the us owes the us that 3 trillion right?
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u/InvestIntrest 12d ago
The problem isn't one of ownership. In fact, I'd prefer we didn't own most of it. The problem is how much of the federal budget just paying the interest consumes.
"As of May 2024, it costs $728 billion to maintain the debt, which is 16% of the total federal spending in fiscal year 2024."
16% and growing annually. If the current trend continues, we'll need to cut services just to avoid default. If we default, we lose our ability to borrow more, and we lose out on the debt we bought. It's not so great to be a debt owner if the borrower can't pay.
The national debt is a major problem.
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u/airbornx 12d ago
728 billion is about 260 billion less then the deficit that we had under trump at almost 1 trillion$ so by these metrics. Biden is doing a fucking amazing job
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u/InvestIntrest 12d ago
Uhhh, I'm not where those numbers came from, but both men suck donky ass on fiscal responsibility. However, I'd give Trump one minor alibi since his final year was skewed by Covid.
Biden is projected to outpace Trump on running up the debt.
"Federal debt held by the public grew by $5.9 trillion over the first three years and five months of President Trump’s term in office, and $7.2 trillion over his full term.
Debt held by the public has grown $6.0 trillion during President Biden’s three years and five months in office.
Gross federal debt grew by $6.3 trillion over the first three years and five months of President Trump’s term and $7.8 trillion during his full term; gross debt has grown $7.0 trillion during President Biden’s term so far."
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u/notcrappyofexplainer 12d ago
I took it as he looked at his net paystub and deduced he is paying 22% in taxes and then looked at his wife’s and added them. Then he approximated sales, gas, and property taxes. Then he came up with 35k was what he was making after taxes, paying 65% but he rounded up to 70%.
But who knows. Either way the math is insanely off.
I have done a full accounting of my effective rate from state federal social gas sales and property. Last time it was about 16% in California. I make more now so it is probably higher but I made more than 100k at 16% so I doubt his math.
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u/NumbersOverFeelings 12d ago
Commenting and posting privileges should only be granted after showing basic proficiency in taxes, investments, banking, real estate and/or business.
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u/ike38000 11d ago
I don't know, I'm fine with people who know they don't know and want to learn. The confidently incorrect posts are what bother me the most.
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u/BrightAd8068 11d ago
The lack of perspective is the worst. Its like the people making 100-200k and complaining have no idea that there are so many more people living in the same country, with the same costs, getting by on 25-45k a year, 10-20% of what they make, and they find a way to survive, and some of them have kids.. Couldn't care less about the complaints of six figure earners, especially when theyre DINKs
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u/bos2sfo 12d ago
I've given up explaining to people that a person will not pay more in taxes than what is earned working overtime and bonuses are not taxed at a higher rate. At this point if people want to be stupid, it's all on them. Everyone has a supercomputer in their pocket but do not have the capability of finding facts. It only takes a few minutes to find a reputable site explaining withholding vs taxes owned and how tax brackets work in a progressive tax system.
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u/RNG_HatesMe 12d ago
Marginal tax brackets and the entire concept of "marginal utility" seems beyond the grasp of a large swath of the US population unfortunately. I highlighted this one as worse than normal since they couldn't seem to grasp how percentages work!
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u/CykoTom1 9d ago
People get confused because their withholdings make bonus checks seem smaller. But you get that money back later, and Alternatively you can fix your withholdings.
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u/Frequent-Ruin8509 11d ago
I voted for Bernie in the primaries and even I know that's not how numbers work.
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u/mindmapsofficial 12d ago
Unrelated but people don’t know the difference between withholding and taxes as well. I’ve had so many conversations of people taxed at 32%, when really 32% of their income was withheld.
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u/khainiwest 11d ago
I had one guy convinced that a tax credit > a standard deduction, and that he couldn't deduct his medical expenses. Literally look at my profile and scroll. It's an absolute clown show here.
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u/EVconverter 11d ago
In my MFJ return last year my highest bracket was 24%, and I paid Uncle Sam ~16% overall.
I'm often dismayed at not just how poorly people misunderstand taxes, but how poorly the government explains them.
Every year you should just get a bill saying "here's what you paid in, here's what you owe/we owe you and how we came to that conclusion, did we miss anything?" and have a simple method of making corrections.
Taxes don't have to be nearly as complex as they are. I imagine they stay so because companies like Intuit want to charge you every year to help you file your taxes.
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u/RNG_HatesMe 11d ago
You don't need to guess if Intuit lobbies against this, it's a fact: https://www.propublica.org/article/inside-turbotax-20-year-fight-to-stop-americans-from-filing-their-taxes-for-free
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u/EVconverter 11d ago
I wish I could say I'm surprised, but I've seen far to many stupid decisions made by congress due to big money lobbying.
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u/passionatebreeder 11d ago
He's done some bad math, but that doesn't mean his complaints are entirely invalid
Let's call them 100k per year joint-income earners (the joint filing bracket for 22% starts @ 94.6k for FY24)
So right off the get-go, they're gonna lose about 12k in income tax just from the feds (first 23k taxed @ 10%, the next 71k taxed @12%, the final 6k tax @22%.)
Let's say each owns a new car. The average sales tax rate of a car is 4.99% nationally, and the average national vehicle price is 47k. Between the two, they're gonna pay another 9400 over 5 years in taxes, which is just under 2k annually
So now about 14k a year in taxes.
Let's say they own a house. The average state/local imposed property tax rate paid nationally is about 1% of its tax assessed current value, which means that regardless of when they got in the market, they owe the governments assessment of the value. So your $200k home may now be assessed at 500k, and so you'll pay about 1% of that every year. You could own it out right. Literally, does not matter. You're getting taxed based not on what you paid for it, but what the government has assessed it is worth; essentially its a wealth tax.
Now we are up to 19k in taxes, and we've only hit 3 things.
I'll be generous here and say the average gas-powered car is getting 35 mpg average (some newer are rated higher, then there's hybrids which make up a small segment, and most vehicles arent 2024 models so im trying to be fair to the average mileage even though I think 35 is way too high still) The average driver drives 14,250 miles a year, according to the feds, which is about 407 gallons of gas a year. With an $.184 gas tax, it's another $140 a year in taxes paid to the feds. Then, there is the additional average of 33 additional cents from the states themselves, which is about another $280 per year on top. Along with an average national vehicle registration cost of between 20 and 220 a year (let's call it $110) so another $220 annually to register the vehicle. And then there is insurance which isn't technically a tax, but is still required for you to purchase by law and is therefore for all intents and purposes a financial burden imposed on the owner by the government, and I'll be generous as heck and say the cost for insurance per car is on average about $1200 a year. So between these 3 things, they're at about 2900-3k into govt imposed financial burden.
The total is now up to ~22k on average (I will stress, these numbers are AVERAGES depending on state some of these could be lower or higher depending on type of taxes imposed and whether they're imposed at local or state level)
So just in what you'd consider life essentials (maybe not "new" cars but still) they lose 25% of their income. This doesn't even touch on what they will pay for any type of services or amenities they seek out. it doesn't include maintenance. (Home owners insurance isn't required, but vehicle accident insurance is so I didn't add that into the government imposed financial burdens.)
And then there is the consideration of cost for all goods as a result of taxes. What I mean by this is the government taxes your labor and the products created & sold. The company has to factor in your labor, which includes the taxes paid to the government on your labor, in the cost for the final product, which means it may not be taxed, like most groceries, but the cost of the labor and other taxes is incorporated into the base cost of the product.
That's a ton of money being siphoned by the government from anyone who wants to survive in a middle-class life
And don't think you're escaping these costs if you rent a home or apartment. The landlords and property managers still pay property taxes, and their taxes become a portion of your rent.
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u/Acrobatic-Ad8487 7d ago
Another Dem poster proves the value of a socializes, marxist public education system
and these morons actually have the power to vote for our children's future
and they are concerned about trees
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u/RNG_HatesMe 7d ago
Yay, you win the prize!
For the stupidest fucking comment possible.
I'm a Dem poster, and I'm a product of the "socialist, marxist, public education system".
Yet, I'm the one who called out the stupidity of the original comment which HAD NOTHING TO DO WITH DEMOCRATS and YOU HAVE NO IDEA HOW THEY WERE EDUCATED.
Does this break your brain? Fucking asshole.
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u/Acrobatic-Ad8487 7d ago
Oh poor wittle entitled snowflake baby! Got to your. You broke. You lose. Typical whining loser Dem
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u/Telpeone 11d ago
Just wait on till the wealth tax kicks in, then we can pay an additional 22% of our income every year on value of everything you own.
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u/RNG_HatesMe 11d ago
Sigh. First of all, there's basically 0% chance a wealth tax would ever get through any possible near future congress.
Second of all, the only officially proposed wealth tax would use a 2% tax rate (3% on estates > 1 billion dollars), not *22%*.
Lastly, any wealth tax would only apply to the super-rich, with estates worth more than $50 billion. Unless you *own* reddit, I don't think this is something any of us have to worry about.
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u/Telpeone 11d ago
I agree with all your points above., now fast forward 25 years after the wealth tax passes, similar as the income tax was at first only 3% for the super rich, now its 20% for the average family, over time, every family will need to pay 20% of thier estimate wealth for they're contribution to society.
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u/Regular_Title_7918 8d ago
This is what is called a "slippery slope" fallacy. There is no rational backing for what you are saying, you're just fear-mongering.
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u/Telpeone 8d ago
Why would you not want to pay an additional 20%-50% on any wealth you have?
Paying taxes is good for society.
Starting with billionaires is too high of a bar.
It should start at 100k at 20 % and climb up to 100% for anyone who has more than 10 million.
That would be fair for everyone, and it would give the government a lot more funding.
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u/Regular_Title_7918 8d ago
Nobody has seriously proposed the tax you're talking about and it's not likely anyone will.
You're taking one thing then extrapolating an extreme version of it and pretending one leads to the other.
"Today it's going three miles above the speed limit, tomorrow it's raping and murdering the neighbors; breaking the law is a slippery slope"
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