[Echelon]

The NY Times is telling me what we've known for a long time: health insurance costs are breaking the backs of working-class Americans.

Rent, car payments and insurance, day care and utilities cost Ms. Pardo more than $1,200 a month, leaving less than $200 for food, gas and other expenses. So even though her employer, the Harris County government, provides her with low-cost insurance, she cannot afford the $275 a month she would have to pay to add her daughter to her plan.

What they're not telling you is that federal, state, and local taxes (income, payroll taxes for social security and medicare, property taxes, sales taxes, phone taxes, gas taxes, etc) are eating away at thousands per year for the working family. The government at all levels takes 25% of my paycheck before I even see it, and then I have property and sales taxes, fees, and a litany of other crap.

The horrors and abuse heaped on the working middle class are disgusting. Taxes are crushing them, and two parents have to work to make ends meet. It's even worse if children are in single-parent households.

I blame both parties and both administrations, Clinton and Bush, for what American lawmakers, partisans, weasels, and crooks are doing to the working class.

I'm lucky. Middle-class, solid job, 100% health coverage (I pay nothing), education benefits, free housing, and many other things that make my middle class, working class life a lot more manageable and, frankly, livable.

[BRussell]

You have completely free health insurance and housing? What are you bitching about?


I think there should be 0 taxes on all income below about $50,000. That would require higher tax rates, say 40%, on higher incomes, but they are doing fine and can afford it anyway. I also think it's time for a single-payer health insurance program that covers absolutely everyone, like every other frikkin civilized country in the world.

[Echelon]

Originally posted by BRussell:
You have completely free health insurance and housing? What are you bitching about?

Because the government still gets me in the butt with these damned taxes at all levels. At some point in the future it'll impact my ability to provide for a family (that I don't have, yet).

And the larger issue, one which I can only partially relate to, yet fully empathise with, is the crisis of the working class family. Truly a tragedy.

[b]I think there should be 0 taxes on all income below about $50,000. That would require higher tax rates, say 40%, on higher incomes, but they are doing fine and can afford it anyway.

[b]If you're talking about a 40% federal income tax for income above 50k, you're not taking into account the differences in living costs in the United States. For example, $30k a year might put you in the upper middle class in rural areas of the American South, but $60k for a family of four in NYC or other major metro/urban areas is just barely scraping by. And don't forget that ~11% is automatically taken out of the payroll, and then there's state income taxes, county property, city service fees, telecom taxes, sales taxes (sometimes upwards of 8%), and on and on. Taxing higher incomes at 40% (the highest bracket is like 37.5%) would further crush the working class, because in many urban areas, the formerly 'higher' incomes aren't so high, what with the high cost of living, health insurance, and taxes.

[BRussell]

Originally posted by Echelon:
If you're talking about a 40% federal income tax for income above 50k, you're not taking into account the differences in living costs in the United States.

True, but neither does the current system. I suppose you could do it - somehow proportion taxes based upon cost of living. But I'm not sure we'd want to. You'd be effectively subsidizing urban living. Cost of living is really just the market's way of keeping people out of overburdened areas. Then again, I live in Montana, so I don't have much sympathy for those high-renters in California and New York.

[mr. natural]

posted by BRussell:

Then again, I live in Montana, so I don't have much sympathy for those high-renters in California and New York.

Don't forget Chicago. That's where Scott_H lives.

[macvillage.net]

Originally posted by Echelon:
The NY Times is telling me what we've known for a long time: health insurance costs are breaking the backs of working-class Americans. What they're not telling you is that federal, state, and local taxes (income, payroll taxes for social security and medicare, property taxes, sales taxes, phone taxes, gas taxes, etc) are eating away at thousands per year for the working family. The government at all levels takes 25% of my paycheck before I even see it, and then I have property and sales taxes, fees, and a litany of other crap.

The horrors and abuse heaped on the working middle class are disgusting. Taxes are crushing them, and two parents have to work to make ends meet. It's even worse if children are in single-parent households.

I blame both parties and both administrations, Clinton and Bush, for what American lawmakers, partisans, weasels, and crooks are doing to the working class.

I'm lucky. Middle-class, solid job, 100% health coverage (I pay nothing), education benefits, free housing, and many other things that make my middle class, working class life a lot more manageable and, frankly, livable.

Kind of an old topic... But still very valid.

There so many factors:
Taxes (as you said)
Medical Care (astronomical costs)
-Medicine Costs (double other nations for exact same druges)
Wages (way to low to live on)

Note:
http://forums.macnn.com/showthread.p...light=medicare


Your a very rare example to have those benefits at "Middle-class". By most standards, 100% health coverage by definition means your "Upper-Middle-class" in today's standards.


There tons of solutions, personally, I'm for a gradual increase of minimum wage over the course of x years. It's the best *solution* (rather than "patch") to the problem. By increasing minimum wage, we allow people who otherwise use government aid (welfare... which is paid by taxes), to make money on their own. EARN. That's a huge benefit.

The key is a slow increase (not to destroy business plans of nations employers... which would be a bad thing).

Secondly, national health insurance. If the governemtn stepped in, stupid things like Drug XYZ being made in New Jersey wouldn't be sold for 1/2 price in Canada or Mexico... it would be the same price as in NJ.

Sidestory; My mother is a home health aid for several years. Some of her assignments have taken her into rather poor communities. How do these people get medication? They get together as a community and pool money together. They fly 1 person to mexico, to fill perscriptions for the community for a few months... Putting their pennies together to FLY someone to Mexico, is cheaper than to buy the drugs here. Even though many are manufactured right in the state. Europe, Canada, Mexico... all sell them half price.


If the government stepped in, that inflation would be cracked down to reasonable pricing. Same with most healthcare aspects.

Not to mention national healthcare is proven to be cheaper in the long run...

It's much cheaper for someone to go to a doctor when it's a minor illness, before is turns into a major health crisis. I'm sure everyone reading this, has (themselves or someone they know) witnessed what an early doctors visit... and a late doctors visit can mean. In terms of cost/time of care etc.


And while people are sick... they aren't working. Possibly even collecting disability.

That's more money lost.

Why people perfer an inefficient, system, which everyone (rich and poor), gets abused, and robbed of money... is just beyond me.

Even if you have the money, and insurance... your still paying 2X what the drug is actually worth. In the end, you are paying for your own health insurance... it comes out of what would have been in your paycheck (it's not a charity your boss runs).

You pay for every penny. Problem is, 1/2 of those pennies are going into Insurance companies pockets. Not to the provider of the services. Not staying in the patients hands.

Time to wakeup, and become a 1st world nation America.

[Face Ache]

It's not just America.

(Why am I always saying that on MacNN? )

As long as you are on an "average" wage the bills will always match your earnings. How else are they going to keep you working and striving for more?

How do they work out the value of electricity anyway, hmm? Or the phone? (our telcos make outrageous profits). It's not based on cost. It's based on what you can afford (based on the average wage).

So the electricity company gets 8% of your wage. The gas company might get 4%. Phone 10%... all adds up doesn't it? You get your cut (13% ) after they get theirs.

Of course basing it on the "average wage" means 50% (or more ) of people are going to have a hard time making ends meet if they want all the services they expect.


Now get back to work! You have bills to pay!

[Timo]

Originally posted by BRussell:
[Then again, I live in Montana, so I don't have much sympathy for those high-renters in California and New York.

Hey now, keep it civil mountain boy.

[macvillage.net]

Originally posted by Face Ache:
It's not just America.

(Why am I always saying that on MacNN? )

As long as you are on an "average" wage the bills will always match your earnings. How else are they going to keep you working and striving for more?

How do they work out the value of electricity anyway, hmm? Or the phone? (our telcos make outrageous profits). It's not based on cost. It's based on what you can afford (based on the average wage).

So the electricity company gets 8% of your wage. The gas company might get 4%. Phone 10%... all adds up doesn't it? You get your cut (13% ) after they get theirs.

Of course basing it on the "average wage" means 50% (or more ) of people are going to have a hard time making ends meet if they want all the services they expect.


Now get back to work! You have bills to pay!

That's actually a good point.

Same with Internet Access, Cable TV... the cost is primarally based on how much you can afford, not productcost+markup.

[Face Ache]

Originally posted by macvillage.net:
That's actually a good point.

Don't act so surprised.

[Shaddim]

Originally posted by BRussell:
You have completely free health insurance and housing? What are you bitching about?


I think there should be 0 taxes on all income below about $50,000. That would require higher tax rates, say 40%, on higher incomes, but they are doing fine and can afford it anyway. I also think it's time for a single-payer health insurance program that covers absolutely everyone, like every other frikkin civilized country in the world.

Ummm, hate to tell ya, but taxes on people making $100K+ /yr are already over 40% (Federal, State, City, County, Property, sales, etc.).

[BRussell]

Originally posted by Timo:
Hey now, keep it civil mountain boy.

Mr. and Mrs. BRussell:

[BRussell]

Originally posted by MacNStein:
Ummm, hate to tell ya, but taxes on people making $100K+ /yr are already over 40% (Federal, State, City, County, Property, sales, etc.).

You may have noted the word "income" in my post in reference to tax rates? Right now the marginal rate for that income is 25%. I'm suggesting it should be 40% of all income over $50,000. It would probably be a tax cut for someone making $100,000.

And I doubt the effective tax rate is over 40% even if you do include all imaginable taxes. The effective tax rate if you include all federal taxes (income + payroll) is around 25% for that income. Who knows what it is when you include everything, but I'd guess less than 40%. Maybe around there.

[finboy]

Originally posted by BRussell:

And I doubt the effective tax rate is over 40% even if you do include all imaginable taxes.

We've had this discussion before. I don't make nearly $100k per, nor does my wife, but we pay close to 40% in taxes combined. It was over 33% each prior to getting married. That money leaves us and doesn't come back -- that's what I call a "tax" on my existence. Likewise, none of that money is discretionary: I'll be locked up if I don't pay it. That too smacks of "tax."

I would gladly say "tax the rich" except that I know that according to many Democrat politicians, my income classifies me as "rich". Even if it didn't right now, one day it would.

[thunderous_funker]

Healthcare costs should be the #1 issue in 2004. Should be.

What's the number one reason American labor is considered "too expensive"? Healthcare costs

Why do we have tariffs on steel? Because the steel industry is saddled with massive debt for the healthcare costs of it's pensioners.

Why is minimum wage so low? Healthcare costs.

Why are unions being busted all over? They demand healthcare benefits that cost too much.

Our underemployment problem? Guess who. In fact, the number one problem with our labor market is because healthcare costs are too high. Employers are going to part-timers and temps to save on benefits instead of full-timers.

State and federal expenditures? Yep. Healthcare.


The list goes on and on. GM spends more on healthcare costs for its American employees than it does on materials to make cars.

Healthcare costs are strangling small business, which are the job creation engine of the economy.

Meanwhile, the insurance and Pharm industry are now the only Trillion dollar businesses on the planet. The Pharm industry operates on margins that are absolutely unheard of. Amoung Fortune 500 companies, average rate of return is around 3.5%. The Pharm industry has been at 18% for almost 20 years.

Yep. Healthcare should the #1 issue in 2004. But instead I bet we're all be talking about those Big Bad Arabs.

[boots]

Originally posted by finboy:
We've had this discussion before. I don't make nearly $100k per, nor does my wife, but we pay close to 40% in taxes combined. It was over 33% each prior to getting married. That money leaves us and doesn't come back -- that's what I call a "tax" on my existence. Likewise, none of that money is discretionary: I'll be locked up if I don't pay it. That too smacks of "tax."

I would gladly say "tax the rich" except that I know that according to many Democrat politicians, my income classifies me as "rich". Even if it didn't right now, one day it would.

You don't by chance fall into the dreaded AMT class do you? AMT is becoming the bane of the upper middle class. The recent tax cuts are predicted to send even more middle class workers into the AMT zone, negating any tax break and actually increasing tax liability.

[BRussell]

Originally posted by finboy:
We've had this discussion before. I don't make nearly $100k per, nor does my wife, but we pay close to 40% in taxes combined. It was over 33% each prior to getting married. That money leaves us and doesn't come back -- that's what I call a "tax" on my existence. Likewise, none of that money is discretionary: I'll be locked up if I don't pay it. That too smacks of "tax."

Yeah, I think it's probably around 40% for people in this income range when all is said and done, but 1. no one really knows what it is, and 2. it varies a lot based on how much you spend and where you live.

I would gladly say "tax the rich" except that I know that according to many Democrat politicians, my income classifies me as "rich". Even if it didn't right now, one day it would.

I just really agree with the first poster's point, because I think it's true that the middle class has gotten squeezed. The wealthy have done great over the past 25 years or so, with their buying power hugely increasing, but the middle class, say between $35,000 and $100,000 or so in current dollars, have remained stagnant.

A good book about this is "The two-income trap."

Warren says today’s two-income family makes 75 percent more than their one-income parents made a generation ago, but have less money to show for it. Why?
_ _ _ _“I thought it would be a story of over consumption,” said Warren. “Of too many trips to the mall, too many Gameboys, too many sneakers.”
But Warren found today’s two-income families are actually spending less on clothing, food, furniture, and appliances than their one-income parents. Instead, it’s fixed expenses that are pressing families against the wall.
_ _ _ _“They’re spending more than ever on a mortgage, on health insurance, a second car so that mom can get to work, and tuition, pre-school, private school and sometimes college for those at the other end of the spectrum,” said Warren.

Anyway, that's why I think significantly increasing the standard deduction, to maybe $50,000, would be a good idea. And the only way to keep things revenue-neutral would be to increase the marginal rates.

[chabig]

Anyway, that's why I think significantly increasing the standard deduction, to maybe $50,000, would be a good idea. And the only way to keep things revenue-neutral would be to increase the marginal rates.

I disagree. History shows us that revenue goes up when marginal rates go DOWN!

[BlackGriffen]

Originally posted by chabig:
I disagree. History shows us that revenue goes up when marginal rates go DOWN!

History means dick. Suffice it to say at 100% taxes, you'll get no revenue (why bother spending), and at 0% taxes you'll get no revenue. So, somewhere in between there is a point where revenue is maximized.

Finding that point is not a trivial task, though.

BlackGriffen

[Echelon]

Dunno if one of the posters is confused (or maybe just me), but the federal income tax alone for the highest income bracket (100k and up, I believe) is already nearly 40 percent (~37.5%).

And you all are smart enough to know that a dual-income family (husband and wife) in the northeast may very well make $100k and above, yet if they have children and other obligations, taxes simply crush them.

It's a sad state of affairs in America today for the working class.

[Shaddim]

Originally posted by BRussell:
You may have noted the word "income" in my post in reference to tax rates? Right now the marginal rate for that income is 25%. I'm suggesting it should be 40% of all income over $50,000. It would probably be a tax cut for someone making $100,000.

And I doubt the effective tax rate is over 40% even if you do include all imaginable taxes. The effective tax rate if you include all federal taxes (income + payroll) is around 25% for that income. Who knows what it is when you include everything, but I'd guess less than 40%. Maybe around there.

Incorrect. Last year I made almost $65K and was taxed about $25K (overall), for a true net of about $40K. That's roughly 38%... and I live in TN! If I lived in Mass, Ca, or NY it would be far worse.

[BRussell]

Originally posted by chabig:
I disagree. History shows us that revenue goes up when marginal rates go DOWN!

True, but what does that mean? Clinton raised the top marginal rate, and revenues went up much higher than when Reagan cut the marginals. I think the idea that revenues go up because you, well, cut revenues, is just absurd and voodoo economics and no serious person believes it. The Bush administration hasn't even tried to pull that one in pushing their tax cuts.

Originally posted by Echelon:
Dunno if one of the posters is confused (or maybe just me), but the federal income tax alone for the highest income bracket (100k and up, I believe) is already nearly 40 percent (~37.5%).

For $100,000 joint the current rate is 25% (or maybe 26 and 25 next year?). But even that's a marginal rate, which means only income above a certain amount is taxed at that rate. A big part of your income is still taxed at much lower rates. The effective tax rate is what I think you're talking about, i.e., the actual percentage of your income that you pay in taxes. It's about 15%, excluding payroll taxes (social security and medicare), for someone making $100,000.

Originally posted by MacNStein:
Incorrect. Last year I made almost $65K and was taxed about $25K (overall), for a true net of about $40K. That's roughly 38%... and I live in TN! If I lived in Mass, Ca, or NY it would be far worse.

How did you figure that out? Are you actually including sales taxes and gas taxes in addition to income and payroll taxes? I mean, people just don't usually have those numbers.

Anyway, what I said was "Who knows what it is when you include everything, but I'd guess less than 40%. Maybe around there." Your 38% seems to fit my statement pretty well.

As far as federal income taxes, I make about the same as you, and I just looked at my last pay stub, and my federal income tax withholding was almost exactly 10% of my gross. Social security/medicare was another about 8%. Of course, I had a zillion other deductions, including health insurance and union dues and retirement and parking fees and on and on. In the end, about 40% of my paycheck was deducted. But most of that wasn't from taxes.

[BlackGriffen]

Something to keep in mind for all those bitching about paying taxes - even if the government levied no taxes whatsoever, you wouldn't see all of that money. Your employer would be almost certain to cut your pay. You would be payed more, certainly, but not as much as you imagine.

In fact, as long as there's someone willing to work for the real income you are now, and can do your job, then your employer is almost certain to cut your pay to nearly that level.

Keep that in mind next time you bitch about how much "you" pay in taxes. You only pay it if you would really see that money in the event of the government eliminating said taxes (you'd get more money for a year at best before the company cut pay - to stay competitive).

BlackGriffen

[Krusty]

As BlackGriffin and BRussell mentioned .. marginal tax rates are not your effective tax rate.

Married filing jointly with an income of 100k means:
86k actually taxed -- deduction is 14k
Taxes on 86k = 15, 126 (check your IRS tax rate book to verify) .. for an effective rate of 15%. on the 100k actually earned.

**NOTE: I REALLY think we should start a "Sticky" thread where info like this can be kept ... not opinion articles, but actual, basic info on tax rates, inflation rates, etc. directly from basic government documents so both liberals and conservatives can agree on it. An example of what sort of stuff I would put in such a thread is below. Whatta ya'll think ?

**Image removed to to obvious lack of interest **

[Lerkfish]

Originally posted by MacNStein:
Incorrect. Last year I made almost $65K and was taxed about $25K (overall), for a true net of about $40K. That's roughly 38%... and I live in TN! If I lived in Mass, Ca, or NY it would be far worse.

I also paid about 38% tax in Ohio.

[Shaddim]

This year, however, most of my pay is in the form of being self-employed (one of my TWO full-time jobs). I'm making the neccessary donations to various non-profits, not to mention depreciations and work related expenses. Uncle Sam will be getting MUCH less from me this year. I've gotten tired of the big bite being taken out, so I'm biting back... legally, of course.

[Krusty]

Originally posted by MacNStein:
I'm making the neccessary donations to various non-profits,.... Uncle Sam will be getting MUCH less from me this year. I've gotten tired of the big bite being taken out, so I'm biting back... legally, of course.

THERE YA' GO, MAN !! For all the people complaining about their tax dollars going to pay for things they don't care about ... THIS IS YOUR SOLUTION ... give to non-profits of YOUR CHOICE and you will have much greater control over what your money supports.

[macvillage.net]

Originally posted by Echelon:
Dunno if one of the posters is confused (or maybe just me), but the federal income tax alone for the highest income bracket (100k and up, I believe) is already nearly 40 percent (~37.5%).

And you all are smart enough to know that a dual-income family (husband and wife) in the northeast may very well make $100k and above, yet if they have children and other obligations, taxes simply crush them.

It's a sad state of affairs in America today for the working class.

It's a sad state of affairs in general.

You would think with all that cash, the Federal government would be more than able to provide adequate services for all Americans...

Yet... it's still has a giant hole.

The Dollar in America, is rapidly disappearing. It's not going overseas. It's not staying in the US. It's disappearing from right before our eyes.

Some say it's a good thing... IMHO it's a sign of a serious issue.

Situations like this are what causes problems in society. Poverty is all to often accompanied by Crime, and lots of other problems.

The key to fighting Crime, as NYC learned, is to curb poverty.

There's research showing that simply graffiti proofing the public transportation cut crime in NYC by several percent (yes, they are actually grafitti proof... want more info on that, perhaps another thread... it's a bit off topic).

Good environments tend to harbor better lifestyles, and safer places. Lower crime means less cost fighting it, less money devoted to cleaning (vandalism expense by business), better education (better jobs in the neighborhood), and less tolerance towards criminal activity.

It's sad, that when Cities like NYC, and LA learned this 15-25 years ago... our Federal government is now going down that road. You would think that the Feds would be wise enough to not make giant mistakes.

Were already in debt... the last thing the nation needs to do is create more expenses.

Solve the problem, don't patch with "budget cuts"... they do nothing for anyone.

[BRussell]

Originally posted by Lerkfish:
I also paid about 38% tax in Ohio.

How did you figure it out?

[Lerkfish]

Originally posted by BRussell:
How did you figure it out?

I'll have to dig it up later...I just remember when the accountant handed me the forms the number 36% or 38% sticking in my head.