[SK in CV]

[quote=ucodegen]

Joe Legal wouldn’t pay the employers share of SS (which is actually 7.65% not 6.2%).

Where do you get your numbers? I got mine from social security admin. 6.2% is the employee’s haircut, 6.2% is the employers haircut. If you look on your W-2, it is box #4. See also linky, notice it says employee and employees each. OASDI is social security and medicare. The self employed show what the total rate is, which is 12.4%. Your employer takes half and the employee takes half. HI is medicare hospital insurance which brings it to 7.65% each to the employer and employee.

You didn’t take into consideration the standard deduction or personal exemptions or child tax credit on the federal, which would have greatly reduced their taxes to just over 2%.

It doesn’t reduce it that much. How many child credits were you taking for Joe Legal? Standard deductions apply to income not the tax, so they reduce the AGI.

Sales taxes would have been paid equally both both Joes.

You mean Joe and Jose. True, though Jose would probably be spending more in Mexico by sending money home.[/quote]

One at at time.

In the old days it was commonly known as FICA. That’s social security. Currently 7.65% for both employee and employer. 6.2% for OASDI and 1.45 for Medicare.

Standard deduction is $11,400. Exemption for joe, mrs. joe, and the two little joes total $14,600. bringing taxable income down to $26,000. 2 child care credits of 41,000 each brings fed tax down to $1,069.

If Jose is sending money home, that means that Joe could be saving too, and not paying sales tax.

[SK in CV]

[quote=ucodegen]

Joe Legal wouldn’t pay the employers share of SS (which is actually 7.65% not 6.2%).

Where do you get your numbers? I got mine from social security admin. 6.2% is the employee’s haircut, 6.2% is the employers haircut. If you look on your W-2, it is box #4. See also linky, notice it says employee and employees each. OASDI is social security and medicare. The self employed show what the total rate is, which is 12.4%. Your employer takes half and the employee takes half. HI is medicare hospital insurance which brings it to 7.65% each to the employer and employee.

You didn’t take into consideration the standard deduction or personal exemptions or child tax credit on the federal, which would have greatly reduced their taxes to just over 2%.

It doesn’t reduce it that much. How many child credits were you taking for Joe Legal? Standard deductions apply to income not the tax, so they reduce the AGI.

Sales taxes would have been paid equally both both Joes.

You mean Joe and Jose. True, though Jose would probably be spending more in Mexico by sending money home.[/quote]

One at at time.

In the old days it was commonly known as FICA. That’s social security. Currently 7.65% for both employee and employer. 6.2% for OASDI and 1.45 for Medicare.

Standard deduction is $11,400. Exemption for joe, mrs. joe, and the two little joes total $14,600. bringing taxable income down to $26,000. 2 child care credits of 41,000 each brings fed tax down to $1,069.

If Jose is sending money home, that means that Joe could be saving too, and not paying sales tax.

[SK in CV]

[quote=ucodegen]

Joe Legal wouldn’t pay the employers share of SS (which is actually 7.65% not 6.2%).

Where do you get your numbers? I got mine from social security admin. 6.2% is the employee’s haircut, 6.2% is the employers haircut. If you look on your W-2, it is box #4. See also linky, notice it says employee and employees each. OASDI is social security and medicare. The self employed show what the total rate is, which is 12.4%. Your employer takes half and the employee takes half. HI is medicare hospital insurance which brings it to 7.65% each to the employer and employee.

You didn’t take into consideration the standard deduction or personal exemptions or child tax credit on the federal, which would have greatly reduced their taxes to just over 2%.

It doesn’t reduce it that much. How many child credits were you taking for Joe Legal? Standard deductions apply to income not the tax, so they reduce the AGI.

Sales taxes would have been paid equally both both Joes.

You mean Joe and Jose. True, though Jose would probably be spending more in Mexico by sending money home.[/quote]

One at at time.

In the old days it was commonly known as FICA. That’s social security. Currently 7.65% for both employee and employer. 6.2% for OASDI and 1.45 for Medicare.

Standard deduction is $11,400. Exemption for joe, mrs. joe, and the two little joes total $14,600. bringing taxable income down to $26,000. 2 child care credits of 41,000 each brings fed tax down to $1,069.

If Jose is sending money home, that means that Joe could be saving too, and not paying sales tax.

[SK in CV]

[quote=ucodegen]

Joe Legal wouldn’t pay the employers share of SS (which is actually 7.65% not 6.2%).

Where do you get your numbers? I got mine from social security admin. 6.2% is the employee’s haircut, 6.2% is the employers haircut. If you look on your W-2, it is box #4. See also linky, notice it says employee and employees each. OASDI is social security and medicare. The self employed show what the total rate is, which is 12.4%. Your employer takes half and the employee takes half. HI is medicare hospital insurance which brings it to 7.65% each to the employer and employee.

You didn’t take into consideration the standard deduction or personal exemptions or child tax credit on the federal, which would have greatly reduced their taxes to just over 2%.

It doesn’t reduce it that much. How many child credits were you taking for Joe Legal? Standard deductions apply to income not the tax, so they reduce the AGI.

Sales taxes would have been paid equally both both Joes.

You mean Joe and Jose. True, though Jose would probably be spending more in Mexico by sending money home.[/quote]

One at at time.

In the old days it was commonly known as FICA. That’s social security. Currently 7.65% for both employee and employer. 6.2% for OASDI and 1.45 for Medicare.

Standard deduction is $11,400. Exemption for joe, mrs. joe, and the two little joes total $14,600. bringing taxable income down to $26,000. 2 child care credits of 41,000 each brings fed tax down to $1,069.

If Jose is sending money home, that means that Joe could be saving too, and not paying sales tax.

[SK in CV]

[quote=ucodegen]

There’s absolutely no way a family with a $52,000 income would pay 30% in taxes. They’d pay $2000, tops (4%), in federal and state taxes combined.

Wrong:
Social Security = 6.2% for both employer and employee (total 12.4%)
http://www.socialsecurity.gov/OACT/ProgData/taxRates.html
Fed Income tax rate @ 52k = 15%(on amount above 16,700) + $802.5 = 13.39% – I used married filing jointly @ 2009, but did not place deductions.
http://www.moneychimp.com/features/tax_brackets.htm
California state marginal tax rate for $52K is 9.3%. Total tax is $2531.35 = 4.9%
http://swz.salary.com/salarywizard/layouthtmls/swzl_statetaxrate_ca.html

Total tax rate is 6.2% + 13.39% + 4.9% = 24.49% (not including San Diego local tax (about 1%), not including property tax (about 1%) and health insurance. It also does not account for AGI adjustment for deductions – largest is mortgage interest deduction (which may drop him a state bracket but not a fed tax bracket, you can only deduct the interest not the principal) Nor does this take into account sales tax on virtually everything that Joe Legal buys (varying from location to location, but generally around 8%).

In reality, Jose Illegal will get $6/hour under the table working full time (if he does not want to work for that kind of money – there are lots out there who do).

During the real estate bubble – the illegals were getting more than $15/hour. In 1976, apprentice carpenters were making $15/hour, and journeymen were making a lot more.[/quote]

See my numbers above. I computed the tax based on the 2009 rates.

Joe Legal wouldn’t pay the employers share of SS (which is actually 7.65% not 6.2%).

There is no local San Diego income tax. (You may be confused by SDI, which is state disability insurance. Currently 1.1%)

You didn’t take into consideration the standard deduction or personal exemptions or child tax credit on the federal, which would have greatly reduced their taxes to just over 2%. And the standard deduction and expemption credits on the state which would have eliminated any state income tax.

Sales taxes would have been paid equally both both Joes.

If they were renters or homeowners, they would have effectivly paid similar property taxes either through their landlord or directly.

[SK in CV]

[quote=ucodegen]

There’s absolutely no way a family with a $52,000 income would pay 30% in taxes. They’d pay $2000, tops (4%), in federal and state taxes combined.

Wrong:
Social Security = 6.2% for both employer and employee (total 12.4%)
http://www.socialsecurity.gov/OACT/ProgData/taxRates.html
Fed Income tax rate @ 52k = 15%(on amount above 16,700) + $802.5 = 13.39% – I used married filing jointly @ 2009, but did not place deductions.
http://www.moneychimp.com/features/tax_brackets.htm
California state marginal tax rate for $52K is 9.3%. Total tax is $2531.35 = 4.9%
http://swz.salary.com/salarywizard/layouthtmls/swzl_statetaxrate_ca.html

Total tax rate is 6.2% + 13.39% + 4.9% = 24.49% (not including San Diego local tax (about 1%), not including property tax (about 1%) and health insurance. It also does not account for AGI adjustment for deductions – largest is mortgage interest deduction (which may drop him a state bracket but not a fed tax bracket, you can only deduct the interest not the principal) Nor does this take into account sales tax on virtually everything that Joe Legal buys (varying from location to location, but generally around 8%).

In reality, Jose Illegal will get $6/hour under the table working full time (if he does not want to work for that kind of money – there are lots out there who do).

During the real estate bubble – the illegals were getting more than $15/hour. In 1976, apprentice carpenters were making $15/hour, and journeymen were making a lot more.[/quote]

See my numbers above. I computed the tax based on the 2009 rates.

Joe Legal wouldn’t pay the employers share of SS (which is actually 7.65% not 6.2%).

There is no local San Diego income tax. (You may be confused by SDI, which is state disability insurance. Currently 1.1%)

You didn’t take into consideration the standard deduction or personal exemptions or child tax credit on the federal, which would have greatly reduced their taxes to just over 2%. And the standard deduction and expemption credits on the state which would have eliminated any state income tax.

Sales taxes would have been paid equally both both Joes.

If they were renters or homeowners, they would have effectivly paid similar property taxes either through their landlord or directly.

[SK in CV]

[quote=ucodegen]

There’s absolutely no way a family with a $52,000 income would pay 30% in taxes. They’d pay $2000, tops (4%), in federal and state taxes combined.

Wrong:
Social Security = 6.2% for both employer and employee (total 12.4%)
http://www.socialsecurity.gov/OACT/ProgData/taxRates.html
Fed Income tax rate @ 52k = 15%(on amount above 16,700) + $802.5 = 13.39% – I used married filing jointly @ 2009, but did not place deductions.
http://www.moneychimp.com/features/tax_brackets.htm
California state marginal tax rate for $52K is 9.3%. Total tax is $2531.35 = 4.9%
http://swz.salary.com/salarywizard/layouthtmls/swzl_statetaxrate_ca.html

Total tax rate is 6.2% + 13.39% + 4.9% = 24.49% (not including San Diego local tax (about 1%), not including property tax (about 1%) and health insurance. It also does not account for AGI adjustment for deductions – largest is mortgage interest deduction (which may drop him a state bracket but not a fed tax bracket, you can only deduct the interest not the principal) Nor does this take into account sales tax on virtually everything that Joe Legal buys (varying from location to location, but generally around 8%).

In reality, Jose Illegal will get $6/hour under the table working full time (if he does not want to work for that kind of money – there are lots out there who do).

During the real estate bubble – the illegals were getting more than $15/hour. In 1976, apprentice carpenters were making $15/hour, and journeymen were making a lot more.[/quote]

See my numbers above. I computed the tax based on the 2009 rates.

Joe Legal wouldn’t pay the employers share of SS (which is actually 7.65% not 6.2%).

There is no local San Diego income tax. (You may be confused by SDI, which is state disability insurance. Currently 1.1%)

You didn’t take into consideration the standard deduction or personal exemptions or child tax credit on the federal, which would have greatly reduced their taxes to just over 2%. And the standard deduction and expemption credits on the state which would have eliminated any state income tax.

Sales taxes would have been paid equally both both Joes.

If they were renters or homeowners, they would have effectivly paid similar property taxes either through their landlord or directly.

[SK in CV]

[quote=ucodegen]

There’s absolutely no way a family with a $52,000 income would pay 30% in taxes. They’d pay $2000, tops (4%), in federal and state taxes combined.

Wrong:
Social Security = 6.2% for both employer and employee (total 12.4%)
http://www.socialsecurity.gov/OACT/ProgData/taxRates.html
Fed Income tax rate @ 52k = 15%(on amount above 16,700) + $802.5 = 13.39% – I used married filing jointly @ 2009, but did not place deductions.
http://www.moneychimp.com/features/tax_brackets.htm
California state marginal tax rate for $52K is 9.3%. Total tax is $2531.35 = 4.9%
http://swz.salary.com/salarywizard/layouthtmls/swzl_statetaxrate_ca.html

Total tax rate is 6.2% + 13.39% + 4.9% = 24.49% (not including San Diego local tax (about 1%), not including property tax (about 1%) and health insurance. It also does not account for AGI adjustment for deductions – largest is mortgage interest deduction (which may drop him a state bracket but not a fed tax bracket, you can only deduct the interest not the principal) Nor does this take into account sales tax on virtually everything that Joe Legal buys (varying from location to location, but generally around 8%).

In reality, Jose Illegal will get $6/hour under the table working full time (if he does not want to work for that kind of money – there are lots out there who do).

During the real estate bubble – the illegals were getting more than $15/hour. In 1976, apprentice carpenters were making $15/hour, and journeymen were making a lot more.[/quote]

See my numbers above. I computed the tax based on the 2009 rates.

Joe Legal wouldn’t pay the employers share of SS (which is actually 7.65% not 6.2%).

There is no local San Diego income tax. (You may be confused by SDI, which is state disability insurance. Currently 1.1%)

You didn’t take into consideration the standard deduction or personal exemptions or child tax credit on the federal, which would have greatly reduced their taxes to just over 2%. And the standard deduction and expemption credits on the state which would have eliminated any state income tax.

Sales taxes would have been paid equally both both Joes.

If they were renters or homeowners, they would have effectivly paid similar property taxes either through their landlord or directly.

[SK in CV]

[quote=ucodegen]

There’s absolutely no way a family with a $52,000 income would pay 30% in taxes. They’d pay $2000, tops (4%), in federal and state taxes combined.

Wrong:
Social Security = 6.2% for both employer and employee (total 12.4%)
http://www.socialsecurity.gov/OACT/ProgData/taxRates.html
Fed Income tax rate @ 52k = 15%(on amount above 16,700) + $802.5 = 13.39% – I used married filing jointly @ 2009, but did not place deductions.
http://www.moneychimp.com/features/tax_brackets.htm
California state marginal tax rate for $52K is 9.3%. Total tax is $2531.35 = 4.9%
http://swz.salary.com/salarywizard/layouthtmls/swzl_statetaxrate_ca.html

Total tax rate is 6.2% + 13.39% + 4.9% = 24.49% (not including San Diego local tax (about 1%), not including property tax (about 1%) and health insurance. It also does not account for AGI adjustment for deductions – largest is mortgage interest deduction (which may drop him a state bracket but not a fed tax bracket, you can only deduct the interest not the principal) Nor does this take into account sales tax on virtually everything that Joe Legal buys (varying from location to location, but generally around 8%).

In reality, Jose Illegal will get $6/hour under the table working full time (if he does not want to work for that kind of money – there are lots out there who do).

During the real estate bubble – the illegals were getting more than $15/hour. In 1976, apprentice carpenters were making $15/hour, and journeymen were making a lot more.[/quote]

See my numbers above. I computed the tax based on the 2009 rates.

Joe Legal wouldn’t pay the employers share of SS (which is actually 7.65% not 6.2%).

There is no local San Diego income tax. (You may be confused by SDI, which is state disability insurance. Currently 1.1%)

You didn’t take into consideration the standard deduction or personal exemptions or child tax credit on the federal, which would have greatly reduced their taxes to just over 2%. And the standard deduction and expemption credits on the state which would have eliminated any state income tax.

Sales taxes would have been paid equally both both Joes.

If they were renters or homeowners, they would have effectivly paid similar property taxes either through their landlord or directly.

[SK in CV]

Very good point Eugene

[quote=Eugene]There’s absolutely no way a family with a $52,000 income would pay 30% in taxes. They’d pay $2000, tops (4%), in federal and state taxes combined.
[/quote]

Exact numbers for 2009 would be:

Federal Income Tax: $1,069
California Income Tax: 0
Social Security: $3,069
SDI: $572

Total Tax: $5,619

Just under 11% total taxes.

[SK in CV]

Very good point Eugene

[quote=Eugene]There’s absolutely no way a family with a $52,000 income would pay 30% in taxes. They’d pay $2000, tops (4%), in federal and state taxes combined.
[/quote]

Exact numbers for 2009 would be:

Federal Income Tax: $1,069
California Income Tax: 0
Social Security: $3,069
SDI: $572

Total Tax: $5,619

Just under 11% total taxes.

[SK in CV]

Very good point Eugene

[quote=Eugene]There’s absolutely no way a family with a $52,000 income would pay 30% in taxes. They’d pay $2000, tops (4%), in federal and state taxes combined.
[/quote]

Exact numbers for 2009 would be:

Federal Income Tax: $1,069
California Income Tax: 0
Social Security: $3,069
SDI: $572

Total Tax: $5,619

Just under 11% total taxes.

[SK in CV]

Very good point Eugene

[quote=Eugene]There’s absolutely no way a family with a $52,000 income would pay 30% in taxes. They’d pay $2000, tops (4%), in federal and state taxes combined.
[/quote]

Exact numbers for 2009 would be:

Federal Income Tax: $1,069
California Income Tax: 0
Social Security: $3,069
SDI: $572

Total Tax: $5,619

Just under 11% total taxes.

[SK in CV]

Very good point Eugene

[quote=Eugene]There’s absolutely no way a family with a $52,000 income would pay 30% in taxes. They’d pay $2000, tops (4%), in federal and state taxes combined.
[/quote]

Exact numbers for 2009 would be:

Federal Income Tax: $1,069
California Income Tax: 0
Social Security: $3,069
SDI: $572

Total Tax: $5,619

Just under 11% total taxes.

[SK in CV]

[quote=patientrenter][quote=SK in CV]….
You think it’s all about the borrowers. It isn’t. It’s about the lenders.[/quote]

I like your reasoning: Repaying loans is not the borrowers’ responsibility, but doubtless you think lenders should keep lending.

So then you won’t mind sending me a cashier’s check for your net worth, as a loan that won’t be repaid. I am waiting.[/quote]

You’re misunderstanding what I’m saying. The problems in real estate began with the lenders, not with the borrowers. The borrowers were the last piece of the puzzle, not the first. They weren’t blameless, but nobody was. From the loan originators and every broker, lender, underwriter, packager and investor. For the most part, the lenders still hold the cards. I’m sure most borrowers fully intend to repay loans when they’re made and only stop paying when they simply can’t afford the payments. But I would make no judgement with regards to an underwater borrower who chooses to exercise their contractual option and stops paying. The loan contract has quite specific language on the recourse the lender has in that circumstance.

And yes, I think the lenders should keep lending. But only to qualified borrowers and carefully underwritten loans. If I sent you a check for my net worth, I’d be as dumb as many of the lenders that made bad loans over the last 5 years, except there would be little chance of me be being bailed out by the government when you failed to repay.

[Author]

Posts