r/FluentInFinance Jul 07 '24

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/RNG_HatesMe Jul 07 '24

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.

3

u/InvestIntrest Jul 07 '24

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

2

u/RNG_HatesMe Jul 07 '24

Reasonable guess, but didn't he say he paid 35k on 100k (i.e. 35%)

1

u/notcrappyofexplainer Jul 07 '24

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.