View Full Version : How much buying power do you have for every dollar earned?
theGinsue
02-22-2019, 11:04
I'm sure that I could make a semi-accurate calculation on this for myself if I put the time into it, but I've often wondered how much true buying power I have for every dollar that I earn.
Sure, it's easy to see the loss of income from income and Social Security taxes as those come off of the top, but what of the other taxes? When you consider Federal and State income taxes, sales taxes, personal property taxes (the tax to keep what you already own), and the myriad of government fees charged on top of taxes, how much money do you actually have left of each dollar you earn? Is it 50% (doubtful)? 40%? Is is even 20%?
Every time an election cycle comes by we see more and more requests for tax increases. It seems like the various governmental bodies are doing less and less with each dollar they acquire causing them to demand more and more - and this leaves us with less and less to spend on things we want and need.
So, has anyone ever done the math to determine how much of their income actually remains after paying all of the taxes?
Would you include sales tax in this? "fees"? things you are legally forced to own but would not otherwise do so if you had a choice?
theGinsue
02-22-2019, 11:07
Yes, I would include any of your income that is paid out to any level of government, until any title (tax, fee, etc.).
theGinsue
02-22-2019, 11:19
Here's something else I wonder about which can be answered by those receiving Social Security benefits:
I know you have to pay income tax on Social Security benefits received, but does the .fed also charge Social Security/Medicare tax to those benefits? Wouldn't that be a bit like a snake eating its own tail?
Here's something else I wonder about which can be answered by those receiving Social Security benefits:
I know you have to pay income tax on Social Security benefits received, but does the .fed also charge Social Security/Medicare tax to those benefits? Wouldn't that be a bit like a snake eating its own tail?
You don't pay taxes on all of your SS, if you're under a certain amount it's tax free.
As to your initial question I would say for the average working person 40% of what they earn isn't taken in one way or another.
2 other points along this line that have always driven me crazy.
As an employer, we pretty much match income SS taxes etc. for our employee's. So a step farther would be for every dollar earned from the economy what part does the gov take?
And AOC and all the socialist folks keep talking about 70-90% tax rate for the rich. These are the folks with enough money to stay one step ahead of tax regulations. So it's kinda like 70-90% of nothing, or very little. The ones that really push my buttons are the folks who take pay "under the table" and then complain about how the rich aren't paying their fair share.
Great-Kazoo
02-22-2019, 11:45
You don't pay taxes on all of your SS, if you're under a certain amount it's tax free.
As to your initial question I would say for the average working person 40% of what they earn isn't taken in one way or another.
Not really. They tax you, but you get it back depending on total household income. However you see less of it up front, as some goes to medicare.
Either way everyone is screwed.
StagLefty
02-22-2019, 12:30
I don't file or pay taxes on my SS retirement income but if I work a part time job for awhile I file to get the taxes back (if I fall under the income level required). I've never quite comprehended why I pay SS or Medicare taxes when I work part time when I'm on both. You don't get those back just Fed and State.
asystejs
02-22-2019, 13:20
Are you looking for something like ....
FICA Medicare State FedTax 401k
100% - ( 12.4% + 1.45% + 4.5% + 17% + 16% ) = 48.65
In the real world I would guess I get to spend about 60% of what I earn. Maybe.
In the real world I would guess I get to spend about 60% of what I earn. Maybe.
I highly doubt it's that high:
gas tax,
vehicle registration use tax,
various fees and taxes on phone, internet, cable, utilities, sales tax, airfare, booze/smokes, lots of excise taxes most aren't aware of, there isn't much you spend money on that isn't taxed one way or another
I highly doubt it's that high:
gas tax,
vehicle registration use tax,
various fees and taxes on phone, internet, cable, utilities, sales tax, airfare, booze/smokes, lots of excise taxes most aren't aware of, there isn't much you spend money on that isn't taxed one way or another
Don?t harsh my mellow dude.
hollohas
02-22-2019, 17:15
I once started a list to see what that might be. I got down to 60cents on the dollar before even getting to sales tax or other harder to determine amounts. That's just including the easy to quantify taxes like income (including SS, Med, etc), property, auto, fuel.
Not to mention the added cost to things that are taxed before they get to us (like booze) that increase the cost of products we buy, that are almost impossible to determine what it costs us.
My guess is our actual buying power is easily less than 50% of every dollar we earn.
Are we talking about gross pay, or take home pay?
Are we accounting for pre-tax deductions?
And if so, are we weighing future value of applicable deductions?
What about after tax deductions that have future value?
How do we determine fixed expenses versus discretionary expenses on a person by person basis?
What about goods where the manufacturer is taxed by the .gov, and if they are, or are not, subject to sales tax (fuel, spirits, tobacco, etc.)?
Do we get to double dip those taxes for our calculation?
Bottom line: exercise in futility.
We all know we are inundated with myriad taxes, fees, surcharges, etc., and it is on each of us to make the choices that we are the most comfortable with concerning how, where and with whom we spend our hard earned money and/or behave as consumers.
Just my opinion.
Sent from somewhere...
Don't harsh my mellow dude.
There's a tax for that, too.
Don?t harsh my mellow dude.
There's a tax for that, too.
[ROFL1][ROFL2][ROFL3]
Render unto Caesar.
Quo vadis?
Render unto Caesar.
Quo vadis?
One of the most misapplied verses ever, aside from "turn the other cheek".
BushMasterBoy
02-23-2019, 11:06
I am taxed 100% and as such have nothing. I was born with nothing and still have most of it left.
And some localities tax groceries (Parker)...some don't (Aurora)
And some localities tax groceries (Parker)...some don't (Aurora)Are you sure about that? I was under the impression there was a whole category of non-taxable food items that was state, if not national. Meat, produce, etc.
Seems like it is mostly stuff that is not ready-to-eat as purchased.
Sent from somewhere...
Are you sure about that? I was under the impression there was a whole category of non-taxable food items that was state, if not national. Meat, produce, etc.
Seems like it is mostly stuff that is not ready-to-eat as purchased.
Sent from somewhere...
Yep...wife used to work for Sunflower/Sprouts...she refuses to buy groceries in Parker...Co may not tax them, but City does.
Yep Lakewood taxes food too. Sheridan doesn't tax food but if you buy anything in Riverpoint you get to pay PIF. The PIF improvement fees drive me sooo crazy. Lots of these redevelopment deals get you into 10% range. I hear thats the amount of the excessive tea tax in Boston.
Also included the excise taxes on tires, embedded taxes on fuel (well over 20 cents per gallon in CO ), etc. We are taxed when we earn, when we save, when we invest, when we spend, and when we own.
I highly doubt it's that high:
gas tax,
vehicle registration use tax,
various fees and taxes on phone, internet, cable, utilities, sales tax, airfare, booze/smokes, lots of excise taxes most aren't aware of, there isn't much you spend money on that isn't taxed one way or another
Keep going. If you buy something from say Walmart (or pick a store). You are paying a portion of their property tax. You are paying their corporate income tax. You are paying the tax they use on fuel to ship items. You are paying the tax on the vehicle.
All of those taxes are hidden from you, but you still pay them in the price of goods.
My guess would be realistically, 80% of what you pay is taxes if you add it up all the way along.
FireMoth
02-26-2019, 08:48
What if we veiwed compulsory insurance as a form of tax?
Unregulated, but required to be able to do business on state and federal levels. And many that arent required, but exist as a buffer against law suits by other entities or peoples insurers.
How much insurance does the fuel truck carry, the fuel itself, the trucks that use the fuel, the driver of the truck, the handlers who u load the truck, the people stocking the shelves, cleaning the floors, etc...
This seems like a fruitless exercise.
This seems like a fruitless exercise.
That is the entire intent of having such a convoluted tax system. You never know exactly how much you are paying in taxes and the govt can hide it.
But lets look at it in a different way.
Some estimates of what can be found on line.
https://www.thebalance.com/u-s-federal-budget-breakdown-3305789
https://www.usgovernmentspending.com/total
Federal Spending 2019: $4.04T
State and local government spending: $3.25T
That is $7.25T.
Some estimates has it around $7.6T.
The US GSP is around $19T
So simple math tell you that 7.6/19 = 40%
So 40% of all money made in in the USA is consumed every year by "the government".
Now consider how many people do not add to the GDP...
But in the simplest breakdown, there is a 40% tax on the entire GDP of the USA...
In that context it seems more important than the idea of spending power.
Render unto Caesar.
Quo vadis?
One of the most misapplied verses ever, aside from "turn the other cheek".
I initially wanted to rant on fiscal/monetary plus the excess increase change in Money Supply. Slack reserve requirement. QE10^7 (Obama trump Mnuchin ruben all same),crappy bond activities, inflations.
[Off topic]
However..... speaking of LATIN
I learned from Jeopardy that fear of 13 was literally a translation. Tridecaphobia.
So. I try to be smart and thought fear of 4 was quadrophobia, but it was tetraphobia.
https://en.m.wikipedia.org/wiki/Tetraphobia
I remember some 4th floor was using "F" instead of 4th.
四 and 死
4 and death sounds same in sound.
[/off topic]
The short version is that every dollar that passes through government hands loses a portion of its value, simply because the government doesn't produce anything (or very little, anyway). Any money the government spends is debased by their overhead. They're like a sports agent, that parasitically feeds off of the talents and labor of others.
The short version is that every dollar that passes through government hands loses a portion of its value, simply because the government doesn't produce anything (or very little, anyway). Any money the government spends is debased by their overhead. They're like a sports agent, that parasitically feeds off of the talents and labor of others.
Exactly, which brings up the question as to how not paying taxes is actually immoral since the money most likely DOES NOT EXIST since it is, in fact, fictitious.
Not fictitious, it is abstract.
Money is worth what we agree it is worth. The agreed value is significantly greater than the actual value of the physical item. Paper money is made from cotton underwear scraps with a bit of plastic and tiny silk strips embedded. The paper, produced by the Crane Paper Company of Dalton, MA, then has ink images laid on the sheets utilizing intaglio plates. The ink is a very precise ration of dye and magnetic particles. The whole process is very interesting and designed to discourage counterfeiting and produce confidence in the users. Actual physical money is a very small percentage of the actual amount of money utilized around the world. Most of the money used today is digital and kept in mainframe computers around the world. Just a simpler way of keeping track of trades in goods and services.
But if you think your money is fictitious, I will be happy to take it off of your hands. I wouldn't want you to be burdened with the delusion. [Coffee]
In the U.S. it is Federal Reserve Notes. Legal tender, good for settling all debts public and private.
In God We Trust.
Along with Universal basic income, there is increasing talk about a social credit system to replace our current money system.
The dollar menu cheeseburger last year ain't a dollar anymore. It cost about 1.49. :(
asystejs
02-28-2019, 15:57
It does not sound like a money replacement
https://en.wikipedia.org/wiki/Social_Credit_System
In the U.S. it is Federal Reserve Notes. Legal tender, good for settling all debts public and private.
In God We Trust.
Money is a proxy for a man's capacity for time and labor.
But if that proxy is effectively destroyed in the process of circulation (in an abstract manner), then it becomes, in fact, fictitious because it has been reduced to not only nothing, but actually something negative in value.
In the U.S. it is Federal Reserve Notes. Legal tender, good for settling all debts public and private.
In God We Trust.
Basically, it's an agreed convention, based upon faith in the US government. Currency is in effect coupons representing that belief. Value by fiat.
Basically, it's an agreed convention, based upon faith in the US government. Currency is in effect coupons representing that belief. Value by fiat.
Agreed!
My offer stands. I have a pickup truck and anyone who would like to unburden themselves of their fictitious, proxy paper before it becomes too negatively valued can PM me. I will be happy to relieve you of your stress laden cash hoard.
Operators are standing by. [Coffee]
It does not sound like a money replacement
https://en.wikipedia.org/wiki/Social_Credit_System
I was worried I'd used the wrong phrase. I'm aware of China's social credit system, and might have used the name incorrectly. Andrew Yang has been on Rogan a few times and he keeps talking about something along the lines of, "you help your neighbor build a shelf, then you earn some "social credit" that you can use to pay someone else to do something for you!" I think I've heard others talk about it. They get all excited like it isn't exactly the same thing as being paid in Federal Reserve notes.
Sounds like a barter economy. As if that was some new type of system.
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