Friday, May 2, 2008

Shocking marginal tax rate

I just got a raise of $250/month at my job. My take home pay increased by $150.37. At first I thought that must be a mistake! I'm in the 25% tax bracket, but this represents almost a 40% tax rate! Sure enough, when I added up the various taxes that are taken out:

25% Federal
6% State
6% Social Security
1% Medicare
38% Total

Holy crap! What kind of country do we live in? This is a seriously socialist level marginal tax rate, and we're not even looking at consumption taxes yet. Of course, my overall tax rate is a bit lower, but it's crazy that of every new dollar I earn, I get to keep just a little over half of it.

When I think about stuff like this, I realize that economics is the most important issue that the government should be concerned with. Lower my taxes. Reduce the deficit. Cut educational spending in half to put us more in line with other developed countries. Get out of Iraq or charge them for our expenses. Phase out Social Security over a 20+ year period... and no I don't care that I won't get any benefits.

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