Thursday, July 26, 2012
Wednesday, July 25, 2012
Monday, July 23, 2012
Saturday, July 21, 2012
Friday, July 20, 2012
Tuesday, July 17, 2012
Sunday, July 8, 2012
Saturday, July 7, 2012
US Energy Concentrations
Why are our leaders not talking about our own energy supplies? Tree huggers too much influence, wrong-headed at that!
Friday, July 6, 2012
Real World Tax Rate
From Of two minds.com,
Charles Hugh Smith
The Real-World Middle Class Tax Rate: 75% (July 5, 2012)
If we include all taxes, the real-world tax rate is much
higher than the "official" income tax rate.
For those Americans
earning between $34,500 and $106,000, the real-world middle class tax burden in
high-tax locales is 15% + 25% + 5% + 15% + 15% = 75%. Yes, 75%.
Before you start listing the innumerable caveats and
quibbles raised by any discussion of taxes, please hear me out first. Let's
start by defining "taxes" as any fee that is mandated by law or legal
necessity. In other words, taxes are what is not optional.
If we include all taxes, the real-world tax rate is much
higher than the "official" income tax rate. These "other
taxes" vary from nation to nation. France, for example, has a
"television tax." It is mandatory, and since virtually every
household has a TV this operates as a universal tax. The argument that this is "optional"
is specious.
In every other advanced democracy, basic universal
healthcare is paid by tax revenues. In the U.S., healthcare insurance is
"optional" but this too is specious: in the real world, private
healthcare insurance is mandatory because the alternative--having zero
insurance--places your entire net worth and income at risk of catastrophic
loss.
Having no healthcare insurance only makes sense if you have
no real assets and a low income. At that point, your care will be provided by
the taxpayer-funded Medicaid program, which is the default universal-care
program in the U.S.
For this reason I consider the cost of private healthcare
insurance in the U.S. the equivalent of a tax. We pay over $12,000 annually for
barebones healthcare insurance, which amounts to about 15% of our gross income.
Some countries pay for healthcare with a 15% tax, here we pay the 15% directly.
There is no difference except the process of collecting the 15%. (The only real
difference is that healthcare costs twice as much per person in the U.S.
because the system is operated by cartels whose business model is fraud, opaque
pricing and the elimination of competition via Central State regulation.)
Yes, the super-wealthy can absorb a $150,000 hospital bill,
but the 99.9% cannot. Thus any claim that healthcare insurance is
"optional" is specious.
Property tax is mandatory. Some countries have no property
tax, others do. Once again, only counting social-insurance and income taxes as
the "official tax rate" is horrendously misleading. For countries
without property taxes, the revenues are collected as value-added taxes (VAT)
or higher income taxes. One way or another, the services paid by property taxes
in the U.S. are paid by other tax schemes in countries without property taxes.
So property taxes must be included in any accounting of total taxes paid.
Many of us who reside in states such as Illinois, New York,
New Jersey and California pay $12,000 or more annually in property taxes. That
is about 15% of our household income.
Renters pay the property taxes indirectly, but to the degree
that rents would be lower if property taxes were eliminated and the tax burden
shifted to a VAT, then renters "pay" the tax just like property
owners.
Employees looking at the paycheck stubs do not see the entire
tax paid on their labor. Empoyees may wonder why their net pay has stagnated
for decades. One reason is that the total compensation costs of employees has
risen substantially.
To give but one example of many, Social Security taxes were
once modest, 3% paid by the employee and 3% paid by the employer for a total of
6% of the wage. Now the total for Social Security (12.4%) and Medicare (2.9%)
is 15.3%. Self-employed people pay the total 15.3% as "self-employment
tax." This is the real-world tax burden of Social Security and Medicare.
The 15.3% Social Security/Medicare tax starts with dollar
one of net income. The Social Security tax goes away above around $106,000 in
income, the Medicare tax does not.
Most employees do not know how much healthcare insurance
"tax" is paid by their employer. To the degree that wages would rise
if the healthcare "tax" was not paid by employers, then employees pay
for this "tax" indirectly. To act like it isn't a mandatory part of
compensation costs is both specious and misleading.
The only transparent way to calculate the total tax burden
is to count all taxes (or equivalent) paid by self-employed property owners.
Not counting the indirect taxes of healthcare and property taxes is misleading
to the point of blatant misrepresentation.
The basic Federal income tax gives each individual earner
$9,500 in standard deductions and exemptions. The tax rate for all income above
that is:
$1 to $8,500: 10%
$8,501 to $34,500: 15%
$34,501 to $83,600: 25%
$83,601 to $174,400: 28%
$174,401 to $379,150: 33%
Above $379,151: 35%
These rates are scheduled to rise at the end of 2012 unless
Congress acts to maintain rates at current levels.
Many households have gigantic interest deductions stemming
from gigantic mortgages, but let's set aside outsized debt-based tax deductions
as far from universal.
Above a rather modest $34,600 in taxable income and up to
around $106,000, the real-world middle class tax burden in high-tax American
locales is 75%:
Social Security and Medicare: 15.3%
Federal income tax: 25% (28% above $83,600)
State income tax: 5% (mid-range)
Healthcare insurance: 15%
Wednesday, July 4, 2012
Tuesday, July 3, 2012
Sunday, July 1, 2012
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