Saturday, March 13, 2010

Tales of My Tax Return

It's tax time. Last week I was preparing for the annual day of reckoning with my tax preparer. She is a charming Obama-volunteer who generally reckons the government owes us a sizable rebate check. So it's not such an unpleasant experience. But it got me thinking. For all my writing and arguing about taxes (it's slavery!) how much attention do I really pay to my own tax rates? Does anyone? Do you know how much of your income went to taxes last year? I had only a rough idea and I'm guessing I'm not alone.

We're a reasonable stand-in for the average, affluent American family. We've got two incomes (software architect and public school reading tutor), two kids, and own a house. We're doing well but aren't exactly independently wealthy.

Let's run the numbers:
% of our income paid in federal income tax: 12.7%
% of our income paid to social security and medicare taxes: 6.8%
% of our income paid to state and local taxes (mostly property because we live in NH): 3.6%
% of our income paid to medical costs (insurance premiums and expenses): 10%

% of our income paid to all taxes combined: 23%
% of our income paid to all taxes plus medical: 33%
There's some data. I won't try to draw any grand conclusions. Well, maybe one:

If this country got universal health care, and my family got a 75% income tax increase, we would still come out ahead.

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