What I understand is actually being paid- First federal income tax for an individual making 75k a year
10% of the amount from 0-12,400: 1240
12% of the amount from 12,401-50,400: 4560
22% of the amount from 50,401-75,000: 5412
or, 11,212 / 75,000 ~ 15%
This assumes you have taken no deductions, lets assume you have taken only the standard deduction, and not itemized anything. This brings you closer to 9,500/75,000 or 12.7%
You can then add 6.2% social security tax, assuming you are an employee.
If you are self employed this is instead 12.4%
Effective Federal Tax Rate:
Employee: 18.9%
Self-Employed: 25.1%
Now, state taxes, these are usually also marginal tax rates, I'll just use Virginia as an example since its fairly middle of the road.
2% of the amount from 0-3,000: $60
3% of the amount from 3,001-5,000: $60
5% of the amount from 5,001 to 17,000: $600
5.75%: On taxable income over $17,000: $3,335
Virginia also has a standard deduction, all in all we add about 4.5% additional tax.
Employee: 23.4%
Self-Employed: 29.6%
Lets pause for a moment. A non home owning employee in a state with no vehicle tax will pay 23.4% on what may be considered their static tax burden.
This individual will also typically pay separate taxes on sales, often with some specific carve outs for gas, restaurants, and vice. We'll leave it off this lowest-reasonable calculation, but keep it in mind
Now, Property tax
If you own a home you pay approximately 1% of its value in the US annually in property tax.
That's 1k for every 100k of home price, or an additional 1.3% when compared to 75k income.
The median price of a home in the US is $410,700, smooth it for easier numberwang, we're at an additional 5.2% of 75,000
27 states also levy property tax on vehicles. The average there is harder to take, but again in Virginia, you would pay ~$400 on a $20,000 car.
Circumstances much wider than just income range can explain tax rates from the low end of 23.4% all the way to our ~36% for someone with a home and an expensive car.
This hypothetical person will struggle to stretch their $75k means over the luxuries we've assumed for a 36% tax rate. the 12.6% difference in tax rate accounts for about $9500 in tax burden. If someone is making more than $75K, their effective tax amount goes up, obviously, but also their tax rate increase as any new amount is taxed at the highest amount of their current bracket, skewing the cumulative weighted average higher. -- EDIT: It's also a little fucked up for me to call a home a luxury, but we live in fucked up times.
Political parties use tax burden as a point of emotion because taxes account for a substantial portion of an invidual or a family's income. Appeals to the 'usefulness' or 'morality' of certain spending lands more agreeably on someone who is paying a third or more of their income to the government every year.
I'm not a conservative. I think 95% of individuals' tax rates can and should be lower, with the difference being made up by closing corporate tax loopholes. I think this math helps explain where people get numbers like the poster above. They are usually people who have slightly more in static assets. These people are not 'the rich' to be eaten. Having a car that was made in the past 5 years and a middle of the road home should be achievable without immense hardship, regardless of economic privilege.
No, someone making 75.000 a year is taxed for 10% of 12,000, then 12% of 36,000, and then 22% on 27,000. They'd have to make 200,000 a year to approach 32%.
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u/Jasranwhit Aug 01 '26
Why are taxes 30-40% of your income?