A close look at federal income tax rates.

While filling out some financial paperwork today, I was asked to state my federal tax bracket.  I found a handy dandy little tool from Bankrate.com (though there are many others available as well, so no specific endorsement here).

I did a little work with this calculator to find out how much, on average, people at different income levels are (in theory) paying in taxes.  I know that there are differences based on itemized deductions, dependents, etc.  For arguments sake and keeping it “apples to apples” we’ll ignore that for now.

If you are a single person with no dependents making $50,000 (a decent salary in many areas of our country), your tax rate  is 12.5%, and with the standard deduction you will pay $6,250 in federal taxes.
At this income level, if you are married and file jointly, your tax rate drops 4.9 points to 7.6%, making your taxes $3,800.  By the way, I think it’s inappropriate for the government to financially incentivize marriage and procreation, but that’s another topic.
To give more comparisons:

Annual Income

Tax Rate

Tax Rate

Income Taxes Paid

single

MFJ

single

MFJ

30,000

8.83%

3.67%

$2,650

$1,100

100,000

18.96

12.5%

$18,975

$12,500

500,000

29.8%

27.64%

$148,989

$138,222

1,000,000

32.4%

31.32%

$323,989

$313,222

10,000,000

34.74%

34.63%

$3,473,989

$3,463,222

If you’ll notice, the income tax rates begin rather high and ratchet up quickly until you get to the seven-figure mark where they level off.  Now, I know that for many Americans, $30,000 is not a particularly low or uncommon a salary, but it also is pretty hard to live on that amount of money in many of the most desirable cities.  I don’t live in a big city and I sure as shit couldn’t pay rent, utilities, and still afford to eat on that salary.  Where I am, $1,400 a month isn’t a crazy amount for rent.  Assuming I would pay $2,650 in income taxes, that would leave me with a little less than $900 a month for everything else (state income taxes, healthcare, bills, food, auto, savings, etc.).

Now, when you look at how much people making over a million pay in taxes, it’s not a small amount of money by any stretch.  I know that many wealthy Americans view a high income tax rate as incredibly unfair; as if they were being punished for being financially successful.

I would argue that while it may feel like an unfair burden to the top 5% earners of the nation to have to pay more in taxes, they are the only ones who can afford to keep this country running, and because of their abilities and good fortune,  it’s their civic duty to do so.  When America is operating with enough money to fund free, high-quality preK through college education, free or low-cost high-quality healthcare, and enough money to maintain, improve and build new infrastructure, they, their employees, their customers and ultimately their businesses will benefit as the entire nation is healthier, better educated, and has more disposable income to spend.  It will give America back its competitive edge in the world market, bring back jobs and manufacturing to American soil, and put our country back on top.

The fact is, even when someone making $10 million “loses” $3.5 million to federal taxes, they’re still taking home $6,536,778.  That’s more than enough to cover the bills and live like a king.  The sad truth is that when you make that much, you can afford to pay a team of lawyers and accountants to help find ways to create deductions and losses to lower your effective tax rate and pay less than your share.  Aside from that, most of the ultra-rich make a good portion of their income from capital gains which isn’t taxed the way that wages/salaries are (there are also online calculators to show tax rates for capital gains).  At that level, you also have the political power to change tax laws in your favor to keep more money in your pockets.

But the wealthy aren’t the only ones with political power.  When people get together in large numbers with a common goal, it becomes a movement that is very hard for government to ignore.  America needs to take a good mathematical look at our current tax rates and work to make them more equitable.  Check out Berkeley’s Robert Reich in his video about the topic of wealth inequality, made back in 2005:

How Unequal Can America Get?

http://www.senate.gov/reference/common/faq/How_to_contact_senators.htm

http://www.house.gov/representatives/find/

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A glutton for punishment.

I must be one because I still want to fix up my old, rundown house.  Structurally, it’s sound, but there are oh-so-many problems that will equal a lifetime of repairing and maintaining.  And no, my home is not as bad as this one pictured, but sometimes I feel as if it were.

 

I was convinced that the red squirrels were back in my ceiling as I could hear a constant chewing sound all through the day.  The pest control people said no, no squirrels are inside.  The chewing got worse as the week wore on.  Yesterday, I pressed my ear to the wall near the ceiling to see if I could ascertain where exactly the sound was located.  I tapped and knocked on the wall and ceiling.  Then, the ceiling opened up with a small flap and a swarm of close to 100 yellow jackets flew out and flooded my living room.

Apparently, whoever built this house used some sort of paper-based pressboard which is a wonderful material for chewing up and turning into a yellow jacket nest.  After a thundershower of Raid (which said on the package that it was fine for indoor use but I still think I’m getting cancer) and taping up the hole, the room was wasp-free, and I managed to escape un-stung.  I spent today washing curtains and cleaning every surface and item in here for fear of poisoning my cat, my family and any guests who deign to enter.  Tonight I will put more chemicals up in my attic to ensure that the hive is destroyed.

If you are in the market for an older house (circa 1940 or earlier) be prepared for all sorts of shenanigans and fix-ups for things that weren’t done right.  Then again, I don’t trust modern contractors either.  While codes are better, I think a lot of new construction is just shiny stuff that looks nice but will crack and crumble piece by piece in 20 years or less.  The glazing on those double and triple-paned windows will not last more than 20 years and will require an entirely new window.  I have to reglaze many of my old wood windows, but with that maintenance, their expected lifespan is 200 years.   That laminate flooring won’t hold up like true wood or natural linoleum flooring.  And if you think you can breathe new life into your vinyl siding with a coat of paint, think again.  It doesn’t like to hold paint at all and you will be replacing that as well in 20 years.  Spend more money on long-living natural or better engineered materials.  It’s healthier for you, more economical in the long-run, and environmentally sound.

I know someone who bought in to a brand new, gorgeous and expensive condo development.  The place is gracious, spacious and clean but before even moving in, the contractors were called back to fix the crooked sheetrock in the living room and repair the shoddy flooring work they did on the stairs.  Just recently there was a problem with the dishwasher leaking into the ceiling and causing damage in the finished basement. I don’t think the place is even 5 years old.

I would be super-angry if I bought new and had to deal with that nonsense.   Maybe I’ve got a lot of work ahead of me, but at least I know what I’m getting and I know to expect certain problems.  In a world where everything is made to be disposal and single-use, it does give me some gratification to know that when I’m done with it, this house will be better than even its former glory.

Spotlight on Joint Health: Trochanteric Bursitis

Image

Some of you may never have heard of bursitis. may you never experience it first hand.  A bursa is a small fluid filled sac that acts as a cushion where bones, muscles and tendons rub against each other around a joint.
The bursa located in the hip by your trochanter can become inflamed for many reasons such as:

  • injury to the hip
  • overuse or injury to the joint
  • poor posture
  • stress on the soft tissues
  • hip bone spurs or calcium deposits

If you have loose joints, your pelvis can become misaligned, setting you up for bursitis.  If this happens, the iliotibial band will tighten up and exacerbate the rubbing and increase inflammation.  If you sit a good part of the day, if you frequently drive for long periods of time, if you don’t exercise and your core muscles are weak, you are more likely to develop this condition.  The pain can become so intense you might not be able to walk.  After sitting for long periods, you can have great pain upon rising.  This will also set you up for a vicious cycle because when you have pain and stiffness, you may not want or be able to exercise and stretch.
If it gets to that point, you likely will have to take an intensive short course of a steroid to quickly reduce inflammation and then begin your recovery process.  This involves intensive physical therapy with a practitioner who is well versed in anatomy and physiology and can determine if skeletal misalignment is part of the problem.  Do NOT seek help from chiropractors.  Their practice is NOT based on sound scientific studies and there are many cases of people being gravely injured by chiropractors.  A good PT is always the way to go.  They do what chiropractors do but with a background in evidence-based medical knowledge and none of the spiritual mumbo jumbo.
Therapy will likely involve the following elements:

 

  • electro-stim machines
  • hot compresses
  • cold compresses
  • skeletal adjustments
  • a series of stretches and exercises to strengthen the muscles of your: stomach, thighs, low back, and butt

The very best thing you can do to ensure your complete recovery and to prevent a relapse is to stick with your rehab exercise program.  Even after you feel better, keep it up.  Sit on a Swiss ball for a few minutes several times a day.   Make sure to engage your abdominal muscles often, especially when carrying heavy objects. Take Pilates classes.  Avoid bizarre body postures and extreme twisting positions if your joints are loose (especially women and especially just before your period–your joints are even looser then and you’re more prone to sports injuries).

If you frequently feel soreness or stiffness in your hip or in your pelvis where your thigh joins your trunk, if you have pain after long periods of sitting, get checked by an orthopedic specialist and rule out trochanteric bursitis.

Be well friends!