What Makes the U.S. Retirement System a Bad Example

[Chasineyes]

Originally Posted by kzoofisher

Exactly Chasin and don't forget to add 7.5%* for SS and medicare as well as local taxes where applicable. Calculating the net effect of taxes you pay with money you already paid taxes on e.g. property tax, but then get some deduction back is very difficult. $.24/gallon gas tax, %.5 city tax. It adds up in a hurry. And if you do save say 15% of your take-home, you are still paying sales tax on a huge percentage of the 85% you burn through.

I'm lucky in that I know exactly how much of my wage package goes to retirement and healthcare. For many people the portion your employer processes on your behalf is a little more mysterious. But don't be fooled, it's a significant percentage of the total cost of employing you and one that you might even think you could handle better if you did it yourself with a 20% pre tax raise.


*There's an argument to be made about who actually pays the 7.5% that is the employers *share*. Arguments on both sides have some validity and I recognize you may think the number above should be more like 15%

Yes, my point was that someone doesn't have to make 6+ figures to pay a high tax rate especially when including the cost of healthcare.

In regards to the FICA taxes, yes I am all too familiar with the added costs these add to employment. I think many people would be quite surprised when calculating the total money paid each year in taxes.

[Shellback]

Originally Posted by Chasineyes

Yes, my point was that someone doesn't have to make 6+ figures to pay a high tax rate especially when including the cost of healthcare.

In regards to the FICA taxes, yes I am all too familiar with the added costs these add to employment. I think many people would be quite surprised when calculating the total money paid each year in taxes.

I'm sure they would, and likewise in other countries. Do you think other countries don't tax gas, booze, cigs etc. But I'm betting your fed, state and local after deductions is probably about 25% on a single at $60,000 or a couple at $120,000. than