Board 8 > Do you pay federal income tax?

(+) Yeah! (+)

Nationally, 47% of people are in the no category, as of the 2012 election. If you have tax withheld but all of it is refunded to you when you file your return, that counts as no.
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My effective tax rate last year was literally 47%

red sox 777 posted...

If you have tax withheld but all of it is refunded to you when you file your return, that counts as no.

Why? You're still paying a shit ton of taxes
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Last year, I did not. This year I will
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foolm0r0n posted...

My effective tax rate last year was literally 47%

Why
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red sox 777 posted...

If you have tax withheld but all of it is refunded to you when you file your return, that counts as no.

False. Tax returns are nothing more than a 0% interest loan that we amortize to the government.
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Menji posted...

foolm0r0n posted...

My effective tax rate last year was literally 47%

Why

FICA is pre-deductible
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Of course it's a 0% loan. That's not the point of this poll. The guidance is strictly about how to answer the question.
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Peace___Frog posted...

red sox 777 posted...

If you have tax withheld but all of it is refunded to you when you file your return, that counts as no.

False. Tax returns are nothing more than a 0% interest loan that we amortize to the government.

Then don't withhold your taxes
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If the federal government has earned dollars straight from your paycheck, then you have paid federal income tax. Your restriction on the definition is improper.
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red sox 777 posted...

Nationally, 47% of people are in the no category, as of the 2012 election.

I keep seeing this number but I don't know who it includes. Because if that includes people like kids, seniors, people unable to work (such as the disabled), then the outrage I've seen about that number doesn't seem appropriate at all.

Yes, I pay federal income tax.
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Zachnorn posted...

red sox 777 posted...

Nationally, 47% of people are in the no category, as of the 2012 election.

I keep seeing this number but I don't know who it includes. Because if that includes people like kids, seniors, people unable to work (such as the disabled), then the outrage I've seen about that number doesn't seem appropriate at all.

Yes, I pay federal income tax.

Kinda wonder that myself, though this is the first I've heard this 47% figure.

For what it's worth, "Persons under 18 years, percent, July 1, 2016, (V2016) 22.8%"
-- https://www.census.gov/quickfacts/
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I once got all my money refunded to me on my tax returns.

I only worked for the last 3 months of the year and I only made $8/hour though.
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foolm0r0n posted...

My effective tax rate last year was literally 47%

um, maybe hire an accountant bro
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ChaosTonyV4 posted...

um, maybe hire an accountant bro

I did?

Do you mean I should cheat on my taxes? I'm not opposed but tbh I don't really care that much, I would much rather avoid all risk of being audited.
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47% doesn't seem physically possible, but i'd like to learn how i'm wrong

are you counting state taxes or something?

i'm pretty sure you stop paying social security taxes after something like 120k, and if you're making 120k or less you're in the 28% tax bracket (effective tax rate is lower, since you only pay 28% on the money above 91)

i may just be failing at math here, but how did you get to 47?
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yeah, I'm self-employed
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that makes more sense. my brain was really churning its gears

i read some crappy self-help book a long time ago that recommended some things to get around those sort of situations, but i'm sure you've looked into it (forming an LLC or something to write off literally everything as an expense i think)
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banananor posted...

47% doesn't seem physically possible, but i'd like to learn how i'm wrong

are you counting state taxes or something?

i'm pretty sure you stop paying social security taxes after something like 120k, and if you're making 120k or less you're in the 28% tax bracket (effective tax rate is lower, since you only pay 28% on the money above 91)

i may just be failing at math here, but how did you get to 47?

He's counting FICA
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banananor posted...

are you counting state taxes or something?

Yes, but that was only... 5% or something? Federal was 42%~

But yeah self employed, so FICA is 15% pre-deductible up to $118k, which is just around what I make, so I suffer its full wrath (i.e. I pay as much as a billionaire). Next, I have a ton of deductibles due to "losses" in a side company. That's the accounting bit that saved me a lot of tax money, but it also means my effective FICA rate went up to like 25% or higher. Combine that with a high tax bracket for regular taxes and it's easy to reach 42%.
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foolm0r0n posted...

$118k, which is just around what I make

Xfd, pauper
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What do you mean?
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I'm guessing Nelson Mandela made more money than that...after he got out of prison, but before he died.
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The more money you spend in life, the more organs you're allowed to bring to the afterlife

118k only gets you two lungs and a gall bladder

This is what makes taxes so insidious- paying taxes doesn't count as spending, so they are directly stealing your organs forever
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You make a $118k working for an indie game dev? Tf
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ChaosTonyV4 posted...

You make a $118k working for an indie game dev? Tf

There's a lot of assumption in here and I kinda wanna just let them stick
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Federal + State + FICA consumes about 20-22% of my paychecks.

47% seems like a lot. Both in reference to foolmo's effective taxes and in reference to being a number of people who don't pay any tax.



But regarding "Romney's 47%" factcheck.org says this:

Romney is a bit out of date with his claim that 47 percent of Americans pay no federal income tax. That was true in 2009, but the number is lower now, and falling as the economy improves and more people are working and getting paychecks.

Figures come from the nonpartisan Tax Policy Center, and its most recent analysis in July 2011 put the figure for that year at 46.4 percent. That comes to about 76 million individuals or families who paid no federal income taxes in 2011. TPC projected that the percentage would fall to 46 percent this year, and to 44 percent in 2013, under current tax policies.
Let’s take a closer look at the 46.4 percenters.

According to the Tax Policy Center, about half of those who owe no federal income tax are people whose incomes are so low that when standard income tax provisions — personal exemptions for taxpayers and dependents and the standard deduction — are factored in, that simply leaves no income to be taxed. Those are people who earned less than about $27,000.
But that doesn’t mean those folks paid no taxes at all. Many of them paid payroll taxes, those taxes taken out of a paycheck by an employer to fund programs such as Social Security and Medicare. They also pay federal excise taxes, such as those on gasoline, and they may also pay state and local income taxes or property taxes.

So that’s half of Romney’s 46.4 percenters. The rest pay no federal income tax due to tax benefits and credits. Here’s the rest of the breakdown:

-22 percent receive senior tax benefits — the extra standard deduction for seniors, the exclusion of a portion of Social Security benefits, and the credit for seniors. Most of them are older people on Social Security whose adjusted gross income is less than $25,000.

-15.2 percent receive tax credits for children and the working poor. That includes the child tax credit and the earned income tax credit. The child tax credit was enacted under Democratic President Bill Clinton, but it doubled under Republican President George W. Bush. The earned income tax credit was enacted under Republican President Gerald Ford, and was expanded under presidents of both parties. Republican President Ronald Reagan once praised it as “one of the best antipoverty programs this country’s ever seen.” As a result of various tax expenditures, about two thirds of households with children making between $40,000 and $50,000 owed no federal income taxes.

-The rest ended up owing no federal income tax due to various tax expenditures such as education credits, itemized deductions or reduced rates on capital gains and dividends. Most of this group are in the middle to upper income brackets. In fact, the TPC estimates there are about 7,000 families and individuals who earn $1 million a year or more and still pay no federal income tax.


So when Romney says all of those in the 46 percent are “dependent on government,” that’s not accurate. Of the estimated 76 million who paid no federal income tax in 2011, 61 percent earned anywhere between $10,000 and $50,000.

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But that doesn’t mean those folks paid no taxes at all. Many of them paid payroll taxes, those taxes taken out of a paycheck by an employer to fund programs such as Social Security and Medicare.

So...they're literally still paying money to the federal government taken out of their paycheck?

Regardless, if you're upset about the number of people who make salaries so far below the poverty line that they don't owe certain kinds of taxes, maybe campaign for a higher minimum wage?

(Easy yes on the poll, btw, I make somewhere from 130k-150k depending on various factors).
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Yeah for the 47% to exclude people who pay FICA is stupid. It's a massive amount of tax money, and you can't escape it, except by being rich. It is probably the worst domestic policy we have right now.
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It was really dumb of Mitt Romney to say that, for that reason. The truth value is highly questionable unless you specifically put in a caveat for FICA taxes.
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Yes, but mostly due to capital gains from day trading
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