The vote cleared the way to enact major elements of President Trump’s domestic agenda and escalated a bitter fight among Republicans over what federal programs to slash to finance major tax cuts.
No. You pay a lower percentage in lower brackets. Most people don’t make it to the higher ones. A 1% difference in a normal tax bracket might mean a difference of a few thousand dollars in taxes. At high levels of wealth, 1% of millions is a shitload of savings, which is why it’s always pointed out that the wealthy disproportionately receive most of the benefits of tax cuts. There is no reason it has to be like this, their benefit could be capped at a hard dollar amount.
Tax brackets are also not connected. A common misconception is that when you go over a bracket limit into the next one suddenly all your income is taxed at that rate. This is incorrect. Your tax rate changed for each amount in that bracket and nothing above or below it, referred to as “marginal”. If the first tax bracket has a 0% tax rate and 2nd tax bracket has a rate of 5% starts at $10,000 and your income is $12,000, you don’t pay taxes of 5% of $12,000, you pay 0% for $10k and 5% of $2k.
One of the other major problems is that in the last 40 years the fusion of corporate power and political party purchase by lobby and corruption has us currently with some of the lowest maximum tax rates in history. Just 5 or 6 decades ago, normal tax rates were 50+% on the ultra wealthy. They’re now 37 and will be cut further. The super wealthy don’t even have regular “income” but earn from investments and may only pay 15% tax rate as they’ve lobbied for this exception. Their rate of 15% is of course before all the loopholes and lack of IRS staffing to enforce tax law, which disproportionately benefits the very wealthy.
So if you look at it and say “I’m single and make 37,500 dollars a year”, you can break it down like so
$11,925 gets taxes at 10% (1,192.5) Leaving the last 25,525 you made taxed at 12%. (3,069). So you would pay a total of $4261.50 in taxes that year.
Then deductions come in. Those pertain to dependents, donations etc. for the most part, if you make that little of money, donations won’t matter, deductions pertaining to purchasing a house, or car might though. Kids (dependents) I believe are around $1700. So say you have 2 kids and only made the above. You would only pay $861 (4261-1700*2). Now everyone fills out an I9 when they take a standard job that pays on a W2 form at the end of the year. The I9 depicts how much money is taken out of every paycheck to mitigate costs at the end of the year. You can tell it to take more or less adjusting for how many dependents and so on. So say you didn’t put dependents on it, it may have taken all 4261.50 out over the course of the year, and you had 2 kids so at the end of the year you paid too much, so you would get a $3,400 return and be happy because the “government paid you money!”. It was your money, you still paid them $861, but they were holding your other 3,400 dollars because how you filled out your I9.
Now if you work as a contractor, you may get paid on not a W2 form but a 1099, which you will not fill out an I9 form at all for and at the end of the year when you filled out your taxes your be upset because you have to pay $861! The good news there though was that you had access to the 3,400 of your money and could invest it in stocks or pizza. Let’s be honest, no matter how much people complain about Arby’s, when your in a rush, a roast beef and cheddar sandwich and a fish and cheddar sandwich for 6.99 do be nice. Arby’s, they have the meats.
This advertisement was not a paid spokesperson, just someone who hasn’t eaten recently.
Thanks for the write up! I guess I took for granted what I knew and need to read further into this change. Appreciate you taking your time to educate us all.
You will see relative pittance for lower tax brackets, millions and billions for the wealthy. What’s worse, critical services that will be cut to find these tax cuts, and then what will come next. They will cut Medicare, raise the social security age which is a benefit cut all to give just that much more to the ultra wealthy.
No. You pay a lower percentage in lower brackets. Most people don’t make it to the higher ones. A 1% difference in a normal tax bracket might mean a difference of a few thousand dollars in taxes. At high levels of wealth, 1% of millions is a shitload of savings, which is why it’s always pointed out that the wealthy disproportionately receive most of the benefits of tax cuts. There is no reason it has to be like this, their benefit could be capped at a hard dollar amount.
Tax brackets are also not connected. A common misconception is that when you go over a bracket limit into the next one suddenly all your income is taxed at that rate. This is incorrect. Your tax rate changed for each amount in that bracket and nothing above or below it, referred to as “marginal”. If the first tax bracket has a 0% tax rate and 2nd tax bracket has a rate of 5% starts at $10,000 and your income is $12,000, you don’t pay taxes of 5% of $12,000, you pay 0% for $10k and 5% of $2k.
One of the other major problems is that in the last 40 years the fusion of corporate power and political party purchase by lobby and corruption has us currently with some of the lowest maximum tax rates in history. Just 5 or 6 decades ago, normal tax rates were 50+% on the ultra wealthy. They’re now 37 and will be cut further. The super wealthy don’t even have regular “income” but earn from investments and may only pay 15% tax rate as they’ve lobbied for this exception. Their rate of 15% is of course before all the loopholes and lack of IRS staffing to enforce tax law, which disproportionately benefits the very wealthy.
That’s your US tax primer 101.
Do you have any good resources where I can learn more about this with a visual element? Videos or charts or something.
Thanks for the writeup as well, your ability to explain something complex but concisely is rad. Keep being you
It was this
So if you look at it and say “I’m single and make 37,500 dollars a year”, you can break it down like so
$11,925 gets taxes at 10% (1,192.5) Leaving the last 25,525 you made taxed at 12%. (3,069). So you would pay a total of $4261.50 in taxes that year.
Then deductions come in. Those pertain to dependents, donations etc. for the most part, if you make that little of money, donations won’t matter, deductions pertaining to purchasing a house, or car might though. Kids (dependents) I believe are around $1700. So say you have 2 kids and only made the above. You would only pay $861 (4261-1700*2). Now everyone fills out an I9 when they take a standard job that pays on a W2 form at the end of the year. The I9 depicts how much money is taken out of every paycheck to mitigate costs at the end of the year. You can tell it to take more or less adjusting for how many dependents and so on. So say you didn’t put dependents on it, it may have taken all 4261.50 out over the course of the year, and you had 2 kids so at the end of the year you paid too much, so you would get a $3,400 return and be happy because the “government paid you money!”. It was your money, you still paid them $861, but they were holding your other 3,400 dollars because how you filled out your I9.
Now if you work as a contractor, you may get paid on not a W2 form but a 1099, which you will not fill out an I9 form at all for and at the end of the year when you filled out your taxes your be upset because you have to pay $861! The good news there though was that you had access to the 3,400 of your money and could invest it in stocks or pizza. Let’s be honest, no matter how much people complain about Arby’s, when your in a rush, a roast beef and cheddar sandwich and a fish and cheddar sandwich for 6.99 do be nice. Arby’s, they have the meats.
This advertisement was not a paid spokesperson, just someone who hasn’t eaten recently.
Thanks for the write up! I guess I took for granted what I knew and need to read further into this change. Appreciate you taking your time to educate us all.
You will see relative pittance for lower tax brackets, millions and billions for the wealthy. What’s worse, critical services that will be cut to find these tax cuts, and then what will come next. They will cut Medicare, raise the social security age which is a benefit cut all to give just that much more to the ultra wealthy.
The land of opportunity for those who steal it.
I really can’t fucking cope with the amount of greed. They already have so close to everything. When is it enough?
It’s easier to justify murder every single day.