How much do you pay in taxes?

[reckoner04]

After reading the off-topic section of this forum with its countless debates about the taxes and government services in the US for a while, I started wondering how much the people of MMO-Champ actually pay to their government.

How much do you pay in taxes, how much do you earn (before taxes) and where do you live/pay taxes? English is not my native language, so I hope I don't confuse the word 'taxes': With that I mean the money you pay to your government on a yearly basis - not what you pay, for example, each time you buy a beer.

If you feel uncomfortable with posting absolute numbers on a public forum, feel free to simply post the ratio. For me it's been less than 3% taxes to total income (gross) for 2011 and I live in Switzerland. Still a student.

[Deleted]

i make around 25$ pr h working and pay around 40% in taxes.
I live in Denmark

[dockers]

I make about $21,000 a year, and my government takes about 25% of that for them self's. I live in NH.

[Ethas]

In my country most of the taxes included in income already and it is something like 30-40%. This is very good system for government since majority of our population don't even know that we pay 40% of our profits to gov so they think that our gov is very nice and does everything for us for free. Obviously there is a lack of reading economics.

[Deleted]

Plenty. 'Nuff said.

[Porcell]

Hypothetically:

Gross of $83,500.
AGI of $67,500. (That's Gross minus pretax deductions to 401k)
Deductions + Exemptions of about $11,000 (mortgage interest, charitable donations, etc etc etc)
Taxable Income of $56,386
Federal Income Tax of $10,219 (18.1% on the $56k Taxable amount)
4.2% tax for OASDI is $3507. (4.2% on total $83k gross amount) (This is Social Security Tax)
1.45% tax for HI is $1210. (1.45% on total $83k gross amount) (This is Medicare Tax)

Total Tax Paid is $14936.

So you compare the Total Tax Paid number ($14,936) against the Adjusted Gross Income (AGI, $67,500) to find the total effective tax rate is 22.1%

(You compare against the AGI because the $16000 put into the retirement account will be taxed when it is withdrawn during retirement. The Social Security and Medicare tax is paid up front when it is earned (i.e. now, the current gross), but it won't be taxed again when I withdraw from the 401k. The 401k withdrawal will be taxed as simple income.)

My state tax rate is 4.35% of AGI-$3700 exemption.

So 22.1% federal tax rate and 4.35% state tax rate. 26.45% total taxes paid. Michigan.

[Mondroc]

None! (Being a student ftw!)

[archelios]

Well my parents are divorced, but I guess they make a combined salary of $450,000 or so. They each pay about $30,000 in property taxes, and around 35%-50% in income tax, give or take. They give a bunch to charity and save the rest to help me and my siblings with college. I live in New Jersey, right by New York.

I'm a student right now and making about $10/hr

[koodledrum]

last year i didn't pay any taxes, infact the taxprick gave me a refund to the tune of £550 which he'd taken off me at source.

[Deleted]

Where I am...we pay the most tax in europe.

gonna relocate to germany or netherlands whenever i can.

[Deleted]

15% income tax and when you add in everything else (health insurance, social security...) then it's close to 30% but in exchange you get everything health related for free, free education all the way etc. I kinda prefer the EU system over US.

[Raunchy]

too much!!!!!!!!

[Reeve]

I pay about $12k/year in taxes.

[Xodan]

How much I pay for taxes really doesn't bother me in the least. I forgot where it was but their was an interview about people paying close to 50% in taxes and one of the gentlemen stated, "I gladly pay taxes for whats the point of being a rich man in a poor country."

[ceelion]

15% Sales Tax here in Nova Scotia, I don't recall how much comes out of my pay. I think its around 20%. I make $10.15/hr.

[Bearshield]

I have a question, for those of you in countries where your taxes go to fund things like healthcare and education for everyone, do you file a return every year or is the money pretty much gone for good after it comes out of your paycheck?

[Porcell]

Well my parents are divorced, but I guess they make a combined salary of $450,000 or so. They each pay about $30,000 in property taxes, and around 35%-50% in income tax, give or take. They give a bunch to charity and save the rest to help me and my siblings with college.

See, this doesn't make sense, every time I see someone in the US claiming that they pay that much income tax.

Lets say that you are married, filing jointly. You are both doctors and make around $200,000 each, gross, before taxes/deductions. So that's $400,000. You have no other income (i.e. from Capital gains or home sales).

Off the top, that's 1.45% paid to Medicare and 4.2% paid to Social Security. That's $5800 to Medicare and $16800 to SS.

Now you both contribute the max to 401k, $16500 each or $33000 total. They decide to contribute the maximum of $5000 each to a traditional IRA for another $10000. This bring their total pre-tax reduction to $43000.

This puts their Adjusted Gross Income at $357,000. Now comes all of their mortgage deductions, standard deductions, charitable deductions, la de da de do. Lets just throw a small number in here so that it is worst case. $11,600 is the standard deduction for married filing jointly. Lets take off just that number. (i.e. no charitable, they already own the home, and no other deductions; worst case). This makes their Taxable Income $345,400.

Now the tax tables. The tax bracket for $345,400 is 33%, but that doesn't mean you just pay 33% on that number; you pay progressively up the brackets just like everyone else. So the the first $17000 is taxed at 10% ($1700 in tax), then $17000-$69000 (i.e. $52000) is taxed at 15%. So going through all those brackets, they pay a total of $91,436 in federal tax (26.48%, not the 33% the tax bracket would make you think.

So adding it up, you have $91436 in federal income tax, $16800 to Social Security, and $5800 to Medicare. Again, this is worst case for a couple making $400,000, contributing the max to pre-tax retirement funds, and having NO deductions other than the standard one. They paid $114036 tax on an AGI of $357000, for a total effective tax rate of 31.94%.

WORST CASE.

I don't know how anyone can claim to pay 50% in tax. Unless they are talking about a corporation, I don't know about corporate taxes. For a person though, you will be terribly hard pressed to pay more than 30% effective tax rate.

[reckoner04]

I have a question, for those of you in countries where your taxes go to fund things like healthcare and education for everyone, do you file a return every year or is the money pretty much gone for good after it comes out of your paycheck?

What do you mean with "file a return"? Why? I'm not sure I'm understanding you correctly...

I prefer the European system as well, but that might just be because I'm still young and don't earn enough yet to pay lots of taxes

[Deleted]

I was on $41/hour and was taxed 40%, about $3800 after tax.

[Reeve]

What do you mean with "file a return"? Why? I'm not sure I'm understanding you correctly...

Every year by April 15th, Americans settle their accounts with the government by filing a "tax return". They itemize their deductions and whatnot, and if they overpaid throughout the year, the government sends them a tax return, or money back. If you didn't pay enough in taxes (like me), you have to send the government a check for the difference.