originally posted by: SgtHamsandwich
originally posted by: MOMof3
a reply to: SgtHamsandwich
I’m very happy for you.
I worked 40 yrs. The only thing i know for sure, my fed tax will increase about 1000 in house version. I assume that means I will go from 15 to 25.
If you are working class then you deserve the break.
That makes no sense. if you are making over $75k a year (assuming you are married and file jointly) then you were already at 25% with the current
plan. There are only 2 small income brackets that are going up. The majority is median or going down.
Um,
literally everyone pays within that 10% bracket. A significant number of people don't even earn enough to make it into the next bracket,
or very little more than that.
Here's how progressive taxation (what we have) works - taxable (post-deduction) income earned is taxed in segments, where each segment is taxed at
that rate.
So, for that 10% bracket - someone earning $9275 would see their effective rate increase:
[before] $0-$9275: 10% * $9275 = $926
[after] $0-$9275: 12% * $9275 = $1113
For someone earning $37500, their effective rate decreases:
[before]: ($0-$9275: 10% * $9275 = $926) + ($9275-$37500: 15% * $28225 = $4234) = $5160
[after]: ($0-$9275: 12% * $9275 = $1113) + ($9275-$37500: 12% * $28225 = $3387) = $4500
We can calculate from that where the breakeven point is:
($1113 + n * 12% = $926 + n * 15%) + $9275 = $15525, which has an effective rate of $1864
For someone earning $112500, their effective rate decreases:
[before]: ($0-$9275: 10% * $9275 = $926) + ($9275-$37500: 15% * $28225 = $4234) + ($37500-$37650: 15% * $150 = $23) + ($37605 - $91150: 25% * $53500
= $13375) + ($91150 - $112500: 28% * $21350 = $5978) = $24836
[after]: ($0-$9275: 12% * $9275 = $1113) + ($9275-$37500: 12% * $28225 = $3387) + ($37500-$37650: 25% * $150 = $38) + ($37605 - $91150: 25% * $53500
= $13375) + ($91150 - $112500: 25% * $21350 = $5978) = $23251
For someone earning $190150, their effective rate increases:
[before]: ($0-$9275: 10% * $9275 = $926) + ($9275-$37500: 15% * $28225 = $4234) + ($37500-$37650: 15% * $150 = $23) + ($37605 - $91150: 25% * $53500
= $13375) + ($91150 - $112500: 28% * $21350 = $5978) + ($112500 - $190150: 28% * $77650 = $21742) = $46278
[after]: ($0-$9275: 12% * $9275 = $1113) + ($9275-$37500: 12% * $28225 = $3387) + ($37500-$37650: 25% * $150 = $38) + ($37605 - $91150: 25% * $53500
= $13375) + ($91150 - $112500: 24% * $21350 = $5978) + ($112500 - $190150: 33% * $77650 = $25625) = $49516
For someone earning $413350, their effective rate increases:
[before]: ($0-$9275: 10% * $9275 = $926) + ($9275-$37500: 15% * $28225 = $4234) + ($37500-$37650: 15% * $150 = $23) + ($37605 - $91150: 25% * $53500
= $13375) + ($91150 - $112500: 28% * $21350 = $5978) + ($112500 - $190150: 28% * $77650 = $21742) + ($190150 - $413350: 33% * $223200 = $73656) =
$119934
[after]: ($0-$9275: 12% * $9275 = $1113) + ($9275-$37500: 12% * $28225 = $3387) + ($37500-$37650: 25% * $150 = $38) + ($37605 - $91150: 25% * $53500
= $13375) + ($91150 - $112500: 24% * $21350 = $5978) + ($112500 - $190150: 33% * $77650 = $25625) + ($190150 - $413350: 33% * $223200 = $73656) =
$123172
For someone earning $415050, their effective rate increases:
[before]: ($0-$9275: 10% * $9275 = $926) + ($9275-$37500: 15% * $28225 = $4234) + ($37500-$37650: 15% * $150 = $23) + ($37605 - $91150: 25% * $53500
= $13375) + ($91150 - $112500: 28% * $21350 = $5978) + ($112500 - $190150: 28% * $77650 = $21742) + ($190150 - $413350: 33% * $223200 = $73656) +
($413350 - $415050: 35% * $1700 = $595) = $120529
[after]: ($0-$9275: 12% * $9275 = $1113) + ($9275-$37500: 12% * $28225 = $3387) + ($37500-$37650: 25% * $150 = $38) + ($37605 - $91150: 25% * $53500
= $13375) + ($91150 - $112500: 24% * $21350 = $5978) + ($112500 - $190150: 33% * $77650 = $25625) + ($190150 - $413350: 33% * $223200 = $73656) +
($413350 - $415050: 33% * $1700 = $561) = $123733
For someone earning say... $500000, their effective rate decreases:
[before]: ($0-$9275: 10% * $9275 = $926) + ($9275-$37500: 15% * $28225 = $4234) + ($37500-$37650: 15% * $150 = $23) + ($37605 - $91150: 25% * $53500
= $13375) + ($91150 - $112500: 28% * $21350 = $5978) + ($112500 - $190150: 28% * $77650 = $21742) + ($190150 - $413350: 33% * $223200 = $73656) +
($413350 - $415050: 35% * $1700 = $595) ) + ($415050+: 40% * $84950 = $33980) = $154509
[after]: ($0-$9275: 12% * $9275 = $1113) + ($9275-$37500: 12% * $28225 = $3387) + ($37500-$37650: 25% * $150 = $38) + ($37605 - $91150: 25% * $53500
= $13375) + ($91150 - $112500: 24% * $21350 = $5978) + ($112500 - $190150: 33% * $77650 = $25625) + ($190150 - $413350: 33% * $223200 = $73656) +
($413350 - $415050: 33% * $1700 = $561) + ($415050+: 33% * $84950 = $28034) = $151767
For someone earning say... $1000000, their effective rate decreases:
[before]: ($0-$9275: 10% * $9275 = $926) + ($9275-$37500: 15% * $28225 = $4234) + ($37500-$37650: 15% * $150 = $23) + ($37605 - $91150: 25% * $53500
= $13375) + ($91150 - $112500: 28% * $21350 = $5978) + ($112500 - $190150: 28% * $77650 = $21742) + ($190150 - $413350: 33% * $223200 = $73656) +
($413350 - $415050: 35% * $1700 = $595) ) + ($415050+: 40% * $584950 = $233980) = $354509
[after]: ($0-$9275: 12% * $9275 = $1113) + ($9275-$37500: 12% * $28225 = $3387) + ($37500-$37650: 25% * $150 = $38) + ($37605 - $91150: 25% * $53500
= $13375) + ($91150 - $112500: 24% * $21350 = $5978) + ($112500 - $190150: 33% * $77650 = $25625) + ($190150 - $413350: 33% * $223200 = $73656) +
($413350 - $415050: 33% * $1700 = $561) + ($415050+: 33% * $584950 = $193034) = $316767
The 40% down to 33% cut is pretty big; everyone else is going to see a small change up or down aside from the breakeven points.
Of course, this is all calculated from that graphic which may not be accurate given the weirdness in the bill.
Also, this leaves out things like payroll taxes like the fixed 6.2% from $0 to $127200. This caps out, which means someone earning $500000 pays 6.2%
of $127200 ($7886), just as someone earning $127200 pays that same tax amount - the effective rate is 6.2% for the $127200 and below 1.6% for the
person earning $500000.
edit on 11Sun, 10 Dec 2017 11:16:24 -0600America/ChicagovAmerica/Chicago12 by Greven because: (no reason
given)