Tax Rates

Tax Rate:

Tax rates are deliberately complicated. Legislators typically take the Pelosian approach. Just pass the thing so we can study it.

So I’ll try to simplify:

What you really care about is the effective tax rate. This is what you pay at the bottom line after all tricks and deductions.

In my case the effective Federal effective tax rate is 19.3%

But that is just the start.

Next is State effective income tax, which for my case is another 7.75%, or a subtotal of 27.05%

Next is local property tax. This for my house is another 5.5% plus the car another 1% of income, now a total of 33%.

Then sales tax. You’ll have to figure out how much of your income you spend on taxable things (food and TBTG boats are not taxable in RI), but a round figure for me is another 5%, so we’re up to 38%.

Then there are payroll taxes: things they take out of your pay other than income tax.

More on this later, but the bottom line is that about half of every paycheck I get is taken away.

Where does it go?

And that of course is the next question: what do I get in return?

OK, defense. OK, government, although we can do with a lot less of that.

But then there is welfare, by whatever name you call it, which is paying other people to spend their tawdry lives without demanding any return to society at large.