Mar

Tax Time

It’s getting close to tax time, again. I hate paying taxes. Who doesn’t? There’s a tax for everything: my earnings, interest, house, or car – even the State tax overpayment (refund) is taxable again! It’s the peril of living in a develop and advance society. There’s a saying: There are 2 things certain in this world – death and taxes. I’m definitely not looking forward to neither of them.

Living in America for over 10 years, I’m wondering how much of my earnings go to taxes. Here’s the breakdown for the year 2009:

Income with Taxes in California Graph

Federal Tax: 25%¹

Social Security Tax: 6.2%²

Medicare Tax: 1.4%³

California State Tax: 9.3%⁴

Sales Tax: 8.75%⁵

Overall Tax: 50.65%

Now, one can argue Social Security and Medicare I’ll get back when I retire at 67. But the sad thing is, I will not get everything back right away. If I keep working, or die, I probably won’t see the money I gave away to the government!

In comparison, I would be paying 52.5% in taxes if I stayed in Toronto, Canada. I get taxed slightly less in California. Still not much better off.

Of course, my taxes are going up with the new Health Care bill. I won’t know for sure how much, but by 2018, the chart above may change dramatically.

It’s tough living as middle-class income earner, who plays by the rules. I can feel the tax burdens. Yet, there are high-income politicians not playing by the rules and avoided paying taxes. It’s just not fair.

I also noticed, while reviewing my taxes on Turbotax software:

2009 Deductions Comparison Nationwide

The national average for medical and dental spending was around $10,000 per person. Perhaps the reason why people demanded the government entitlement program was so they could get rid of this spending. Even worse, charitable donations was below $4000 per person. The conclusion: People want more and give less. They expect the government to be more charitable. I doubt it will, unless there are more taxes!