[quote=no_such_reality][quote]John Legal: $25.00 per hour x 40 hours = $1000.00 per week, or $52,000.00 per year. Now take 30% away for state and federal tax; John Legal now has $31,231.00.[/quote]
This is a prime example of how broken our thinking is of our taxes. Unless John’s spouse is a high earner and he’d be better off staying home with the kids, John didn’t pay for sh*t.
John “middle class” Legal thinks he pays taxes. It’s right there, 30% off the top. He doesn’t.
If John has a W2 income of $52,000, is married and two kids, without another single thing, John and family will pay $588 in Federal income tax and $0 in California income tax. The child tax credit and California exemption wipes out his income taxes. Go do the ____ing math, the tax form takes all of 3 minutes at this level.
That leaves social security, which is 7.65% if W2 and 15.3% if self employed. Medicare is 1.45% of that, or 2.9% if self employed.
Since John’s family only makes $52K, they qualify for a $304/month assistance on for medical insurance. Broken, pain in the butt, sure, but roughly half of their premium.
They’re damn close to qualifying for SNAP too depending on their rent and housing expenses.
So John thinks he’s paying for the roads, police, firefighters and everything else with his $588 per year in taxes while sending two kids to school at $9000+ per year each.[/quote]I agree with most of this. John should probably claim at least 6 dependents on his W-4 at work so he can keep more of his paycheck and not get such a large tax refund.
Covered CA isn’t going to use $52K for John’s income. They’re going to use his MAGI. I maintain that John and Ms. Legal can get an HMO “marketplace” plan for $1 to $11 month each and a PPO plan for $27 to $70 mo each depending on their ages. They at least qualify for a Silver 73 plan and possibly even a Silver 87 plan with the two kids (which have copay assistance built into them). Their two kids will be placed into expanded Medi-Cal under the new March 2015 guidelines for “moderate income” families.
