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Income Tax Fun!

Boston Tea Party

”...but in the world nothing can be said to be certain except death and taxes.”

—Benjamin Franklin

Income Tax Misery!

Every country has different tax laws. Here is a quick overview of what an average worker in the United States of America might have to pay in taxes. Of course, detailed information can be found at Tax rates, and actual taxes owed are based on the amount of income, marital status, number of children, property ownership, and other factors.

Some Common Taxes

  • Income Tax
    • Federal
    • State
  • Social Security Tax
  • Payroll Tax
  • Sales Tax
  • Property Tax

Eye-Opening Tax Analysis

Let’s go buy a new $100.00 item with the money I just earned.

$100 earned income
– 28% income tax, $28.00
$72.00 after tax income (actual amount received in paycheck
– 8% sales tax, $8.00 (varies by state)
$70.00 actual income (buying power)

That’s roughly:

  • 1/3 for the government
  • 2/3 for you.

So now I have to earn $150.00 in order to pay for a $100.00 item. But it gets worse!

Suppose you finally start making more money. You buy a house, and now you can save, and invest a little money in the stock market. The additional income moves you into a higher tax bracket. You may have to pay up to 50% of your earnings in taxes! Not to mention sales tax, and property tax.

Life is no joke!

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