Saturday, December 26, 2009

More and More Taxes

With Obama and the Democrats spending federal tax dollars like it's free, I wanted to see how much I was paying in taxes already. Just to simply the analysis and have it comparable year-over-year, I took the AGI (Adjusted Gross Income) from my tax returns and added all the taxes from my W2 (Federal Income Tax, Medicare Tax, CA State Income Tax, Social Security Tax, CA SUI/SDI Tax) plus any amounts I paid along with my tax returns. Since I have to pay sales tax as well, I applied 7.75%/8.25% to the "take home" amount and calculated the net dollars as % of AGI.

Here is what I got:
2006 = 61.3%
2007 = 58.5%
2008 = 56.9%

I sold my house in 2006 so there was 6 months of mortgage interest deductions. Also I paid alimony in 2006 and 2007 which gave me a tax break. 2008 is probably a more representative year since I had very few deductions. Using the ~57% number, it means that from January 1st until June 6th, I'm slaving for one of the many levels of government that taxes me. Only starting from June 7th onwards am I keeping the money I earn. Sounds pretty steep. I'm sure I'm a net payer of tax dollars.

Ironically, I just bought a house with my parents. They're paying for 50% of the total with money from the sale of their house in Canada. I'm paying a bit in cash and taking out a mortgage for the rest. Excluding sales taxes, the amount of taxes I paid in 2007 & 2008 is about the same as my new mortgage. Crazy... and to think it will go up even more once we start paying for all that "Hope and Change" wealth redistribution.

1 comment:

Anonymous said...

as a net payee of taxes; me and my family appreciate your hard word. keep it up. Obama/Pelosi/Reid have more programs they need to fund.