Americans Practically Taxed 100% of Incomes
April 01, 2009
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SACRAMENTO (AP) -- California residents will pay one of the highest sales taxes in the nation after a 1-percent tax hike goes into effect to help the state bridge a record $41.6 billion budget deficit.
Taxed 100%??? Well not exactly....but let's see how much taxes, interest and insurance consume of the average families income. Let's apply this to a self employed family of four earning $100K per year living in a half a million dollar home with a $300K 1st mortgage and $50K HELOC
TAXES
FICA and medicare takes about $7,500 per year or 7.5%.
Federal and State Income Tax @ 35% or $35,000.00
Property Tax $6,000 per year
Sales Tax, Gas Tax, and Misc.....$1,500 per year
Total Taxes approximately $50K per year or 50% of gross income(the number grows for high income earners)
INTEREST
$300K mortgage @6% = $18,000 per year
$50K HELOC @ 6% = $3,000 per year
2 cars w/ $40K financed @ 7.5% = $3,000 per year(depreciation would make this number explode)
Credit Cards w/$10K balance @ 10% =$1,000 per year
Total Interest payments approximately $25K per year.
INSURANCE
Homeowners $1,500 per year
Auto $2,000 per year
Life Insurance.....$500 per year
Health Insurance $12,000 per year (assuming family health and no preexiting conditions)
Total Insurance Costs $16,000 per year
This family, which earns twice the income of the average family, with not so out of this world leverage, and average health insurance spends 91% of its income on taxes, interest, and insurance. This family doesn't have a boat, second home, or pre existing health condition which could easily double the health insurance costs.
After paying taxes, interest, and insurance......the above family has about $750 per month for food, clothing, utilities, home and auto maintenance, gasoline, travel, cable TV and internet, and entertainment.
After gasoline and utilities, there ain't much left to live on...........now you know why America has a negative savings rate......or must borrow money to make ends meet. Over the past eight years, expenses have exploded and incomes have remained stagnant or even decreased.
Debt, Taxes, and Insurance is suffocating America and its citizens......after paying utilities and gasoline, there is barely anything left for food without being forced to borrow.......now that jobs are being cut and incomes slashed......how many BIG screen TVs do you think people will be buying in 2009????????????????????????????
In my neighborhood, property taxes just went UP 10-15% even though home values declined due to special assesments. Friends tell me their health insurance premiums increased 15%. Now states are increasing sales and income tax......all this over an economy where wages are declining and jobs cut.
For those of you that have been wondering why so few can save in America these days.....now you know why.....as a society, the vast majority of our incomes goes to pay the government and financial institutions of one sort or another.......BEFORE we can spend a dime on ourselves.
Now you know why people are saying FU....because they are FED UP!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
Whoops....I made a mistake...for a self employed family....FICA should be doubled......now where does that leave us???????????????????????????????????????????????????????????????
Get ready for 70-90% of America(including state and local governments and business) going bankrupt.....only after we bring debt and insurance into balance....can we start growing our economy again.
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