With the wild spending spree the new administration and Congress have been on, and with the statements about paying a fair share in taxes, I decided to try to figure out what percentage of my salary I actually pay in taxes. It's appalling.
When we think about our tax rate we generally think about payroll taxes only. But there are so many more. In looking at my W-2 I calculated that between federal and state taxes I pay 29% of my salary just in payroll deduction taxes. If that weren't bad enough, once I started adding the other taxes it got really frightening. The corporate tax rate is 25%, so for the bills I pay I have to figure that at least 25% is the passing on of their taxes to me. So if half of my take home pay goes to my bills, then I'm paying 25% of half of my remaining 60% in additional taxes. So now my tax rate is up to 44%.
If I spend the remaining half of my take home pay (30% of my salary) then I'm paying corporate taxes again, but I'm also paying sales taxes. So for that last 30% of my salary that I actually get to enjoy, I'm getting taxed even higher. These 2 taxes together equal an additional 17% of my total salary. So now I'm up to a combined tax rate of 61%.
So now what about all of those hidden taxes on individual items. Plus the tariffs and import taxes. It's totally conceivable that with these additional taxes my total tax rate could easily equal a full 2/3 of my salary. Between the federal and state governments they're taking 2/3 of my salary and then have the temerity to tell me they don't have enough money to keep police on the streets. If they're taking 2/3 of everybody's salaries what, pray tell, are they doing with that money that it is still not enough.
With the additional spending and quadrupling of the deficit, we all know they're going to ask us to pay more in taxes. My question is not whether it will eventually get to the point where my WHOLE salary is paid in taxes, but how soon that will happen.
2 hours ago