Household income

[presonorek]

First, many if not most states pay above $7.50 - many twice that. If you are in a poor, rural area where the minimum wage is $7.50, then a household income of $60,000 for four unskilled, uneducated people isn’t that bad. If you want more, you need to develop a career or trade.

Second, the AVERAGE household income is still close to $80,000 in the poorest states in the union - MS and WV. And in half the states, the average income is in the six figures!!

Third, take your example of two unskilled adults earning $35,000 combined. They are paying next to nothing for federal income taxes. With a standard deduction of $29,000, they owe on $6,000 - less than $1,000. (Just how little do you think they should pay?) And on top of that, they are eligible for Pell Grants to enroll in a career-building program, courtesy of the American taxpayer.

Sorry, but if there is a family of four adults living together - Mom, Dad, adult son, and adult daughter - who are all earning minimum wage or close to it, then they have made poor decisions in life.

Average Family Income by State 2024

You are working with averages not medians. Ultra-high income earners inflate the average. There are millions of people in the United States earning less than $20,000 per year.

 

[presonorek]

First, many if not most states pay above $7.50 - many twice that. If you are in a poor, rural area where the minimum wage is $7.50, then a household income of $60,000 for four unskilled, uneducated people isn’t that bad. If you want more, you need to develop a career or trade.

Second, the AVERAGE household income is still close to $80,000 in the poorest states in the union - MS and WV. And in half the states, the average income is in the six figures!!

Third, take your example of two unskilled adults earning $35,000 combined. They are paying next to nothing for federal income taxes. With a standard deduction of $29,000, they owe on $6,000 - less than $1,000. (Just how little do you think they should pay?) And on top of that, they are eligible for Pell Grants to enroll in a career-building program, courtesy of the American taxpayer.

Sorry, but if there is a family of four adults living together - Mom, Dad, adult son, and adult daughter - who are all earning minimum wage or close to it, then they have made poor decisions in life.

Average Family Income by State 2024

"The average personal income in the United States is $63,214, with the median income across the country being $44,225. Real wages averaged $67,521 in 2022, and average household incomes averaged to $87,864." ~worldpopulationreview.com February 29, 2024

Average Family Income by State 2024

That means it is very common for households to have 1 or more income earners making $22,112.50 or less per year. There is an uncomfortable reality out there.

for that ScorpioRising007's scenario. His household probably brings in $88,450 instead of the $252,856 that you speculate is reasonable. That equates to $10.63 per hour assuming they work 40 hour work weeks.

 

[presonorek]

Here is something else to consider.

Inflation Calculator | Find US Dollar's Value From 1913-2024

Easily calculate how the buying power of the U.S. dollar has changed from 1913 to 2024. Get inflation rates and U.S. inflation news.

www.usinflationcalculator.com

In 2005 I was living large making $12.52 an hour. That would equate to $19.77 an hour today.

I'm not sure I can develop the mentality that everything is going good.

 

[Lisa558]

131,662,800 taxpayers made less than $75,000 per year. Let's say the average pay out of all of these taxpayers is half of that. That is $37,500. If we taxed all 131,662,800 people at 10% that would generate $493,735,500,000.00 (four hundred ninety three billion five hundred million dollars). That would be roughly equivalent to 19% of all income taxes collected in 2022.

That might not be such a bad idea.

That would be a good idea. Having the bottom 50% pitch in 20% of revenues, when you consider that the top 1% pitch in 46% and the top 5% pitch in 65%, seems fair to me.

 

[presonorek]

That would be a good idea. Having the bottom 50% pitch in 20% of revenues, when you consider that the top 1% pitch in 46% and the top 5% pitch in 65%, seems fair to me.

I can't find all the data to math it out.

 

[Lisa558]

"The average personal income in the United States is $63,214, with the median income across the country being $44,225. Real wages averaged $67,521 in 2022, and average household incomes averaged to $87,864." ~worldpopulationreview.com February 29, 2024

Average Family Income by State 2024

That means it is very common for households to have 1 or more income earners making $22,112.50 or less per year. There is an uncomfortable reality out there.

for that ScorpioRising007's scenario. His household probably brings in $88,450 instead of the $252,856 that you speculate is reasonable. That equates to $10.63 per hour assuming they work 40 hour work weeks.

I suspect that they are not all working 40 hours a week - which accounts for the low combined income of all four. (And I’m not sure where you get the $252,000 from. I never mentioned that.)

 

[Lisa558]

I can't find all the data to math it out.

How’s this?

Who Pays Income Taxes?

(pdf) It is a common refrain from some politicians that the rich are not paying their fair share of income taxes. This sentiment is echoed by findings from a Pew Research poll conducted last April, which indicated that a significant portion of respondents feel that wealthy individuals do not...

www.ntu.org

 

[presonorek]

I suspect that they are not all working 40 hours a week - which accounts for the low combined income of all four. (And I’m not sure where you get the $252,000 from. I never mentioned that.)

I multiplied the average income by 4.

 

[presonorek]

How’s this?

Who Pays Income Taxes?

(pdf) It is a common refrain from some politicians that the rich are not paying their fair share of income taxes. This sentiment is echoed by findings from a Pew Research poll conducted last April, which indicated that a significant portion of respondents feel that wealthy individuals do not...

www.ntu.org

That might work the top 50% paid 97.66% of all income tax revenue in 2021.
The bottom 50% paid 2.34% of all income tax revenue in 2021.

Let me see I can work with that.

 

[Orangecat]

My advice to anyone, if they have the wit and ability to do so, is avoid paying income tax altogether. Is it easy? No. Is it possible? Yes. If you do not consent to how the government spends your money, cut them off.

 

[presonorek]

$4,050,000,000,000 collected
$94,770,000,000 collected from the bottom 50%
$3,955,230,000,000 collected from the top 50%

I still can't figure out what the income for each group is on average.

 

[presonorek]

My advice to anyone, if they have the wit and ability to do so, is avoid paying income tax altogether. Is it easy? No. Is it possible? Yes. If you do not consent to how the government spends your money, cut them off.

It is very easy. If your income is $0.00 and you multiply it by any tax rate imaginable then you will be $0.00 every time.

 

[Lisa558]

That might work the top 50% paid 89.6% of all income tax revenue in 2021.
The bottom 50% paid 10.4% of all income tax revenue in 2021.

Let me see I can work with that.

No…..look again. The top 25% paid 89.6% of the taxes. The top 50% paid 97%.

The bottom 50% paid less than 3%.

 

[presonorek]

No…..look again. The top 25% paid 89.6% of the taxes. The top 50% paid 97%.

The bottom 50% paid less than 3%.

You are right. I was looking at the wrong column.

 

[Concerned American]

Distribution of household income U.S. 2022 | Statista

In 2022, just over 50 percent of Americans had an annual household income that was less than 75,000 U.S.

www.statista.com

According to this data 8.3% of the population make less than $15,000. 11.8% of the population make more than $200,000. There are 7 other categories in between. I think that the data from this chart can be used to make a workable tax policy.

This is what I have come up with.

The lower 33.9% of the population made less than $50,000 in 2022.

The middle 44.9% of the population made between $50,000 and $149,999 in 2022.

The higher 21.1% of the population made $150,000 or more.

This is out of 148,300,000 households. The Federal budget for 2023 was $6.1 trillion. Let's unpack this mess and create a simplistic tax code that generates $6.1 trillion.

Gee, why would I want to earn $150K to 200K and take home $84K to $88K when I could make $149K and take home about $128K using your formula? Silly me.

 

[presonorek]

4,050,000,000,000 dollars in revenue collected / 179,440,000 tax returns filed

That is an average of $96,955.00 was the average income in 2021. $22,570 was collected on average per person.

This would require a flat tax of 23.3% to make it fair across the board.

 

[presonorek]

Gee, why would I want to earn $150K to 200K and take home $84K to $88K when I could make $149K and take home about $128K using your formula? Silly me.

They usually have a phase out process for what you are describing. I assume you knew that.

Besides what was my silly plan? I don't think I have figured it out yet. It wasn't in the post you quoted.

 

[presonorek]

Gee, why would I want to earn $150K to 200K and take home $84K to $88K when I could make $149K and take home about $128K using your formula? Silly me.

So far the only plan I have been able to come up with was a flat tax of 23.3%. I don't have the sufficient data to create a progressive tax plan like you are discussing. However, as your tax planner I'd recommend you make $149,000 so that your take home pay would be larger.

Your employer should accommodate you by paying you less. If you own your own business you should be able to distribute the difference in profits to your employees to save you tax dollars. If you come out better making less then make less. That doesn't require a babysitter.

 

[presonorek]

Gee, why would I want to earn $150K to 200K and take home $84K to $88K when I could make $149K and take home about $128K using your formula? Silly me.

Every time the tax code changes even something minor, someone will get screwed. Life is too complex to find all the details.

 

[presonorek]

Gee, why would I want to earn $150K to 200K and take home $84K to $88K when I could make $149K and take home about $128K using your formula? Silly me.

Oh. This must be what you were talking about.

The tax rate for people earning less than $50,000 should be 1%.

That might generate $12,568,425,000.00.

The tax rate for people earning $50,000 - $149,999.99 should be 14%.

That might generate $699,160,350,000.00.

The tax rate for people earning $150,000 or more should be 44%.

That might generate $4,130,451,600,000.00.

That is a grand total of $4,829,624,518,425.00 in revenue.

I guess just borrow the remaining $1,270,375,481,575.00 to pay the remaining part of the budget. I think I see why over half of the lowest income tax payers do not pay taxes. It is a drop in the bucket. This business is crazy. Our budget is too big or something another.