04-16-2003, 11:11 AM
|
|
|
Too lazy to set a custom title
Industry Role:
Join Date: Jan 2001
Location: God's right hand
Posts: 19,800
|
Quote:
Originally posted by Lenny2
Also, the biggest drain on the paychecks of the bottom 3 tax brackets isn't income tax, its social security tax. (Which was raised by the Reagan administration in 1982 BTW)
There's a cap on social security tax. I don't know the exact number, but its between 80-90K this year.
So while the lower 3 brackets pay in thier 7.65% on everything they make, the guy who makes 400K a year only pays 7.65% on the first 80K or so, on the other 320K he pays no social security tax at all.
So once you hit that threshhold, your income tax rate goes from 27 to 30%, but you pay no social security tax, so in effect your rate dropped to 22.5%
And on the highest bracket, 38.6%, it drops to about 31.1%, when you're comparing the actual % of income you have to pay to the feds compared to the lower three brackets.
|
so in other words, there actually *is* one place where the rich aren't being soaked to prop up the less productive.
__________________
I'm not a dinosaur, I'm a crocodile. I've seen dinosaurs come and go and I'm left unimpressed.
|
|
|