Okay I want to know what percentage of peoples income in the middle class (lets loosely define this as 2 standard deviations from the median income)

Can anyone find this? I certainly cant.

3/30/2010 3:58:21 PM

Quote :

"Okay I want to know what percentage of peoples income in the middle class (lets loosely define this as 2 standard deviations from the median income) "

What % of peoples income in the middle class...what?

3/30/2010 3:59:39 PM

What percentage of their income goes to taxes (not just income tax, taxation as a whole, social security medicare, other programs, average state taxes, taxes from product and services purchased, taxes from income from other sources investment retirement ectra)

3/30/2010 4:10:12 PM

define middle class.

[Edited on March 30, 2010 at 4:31 PM. Reason : .]

3/30/2010 4:31:14 PM

Quote :

"lets loosely define this as 2 standard deviations from the median income"

3/30/2010 4:32:29 PM

I do think that might be a bit wide.

Lets say 2 standard deviation from the median income, during the year in which the tax was collected.

That should include 75% of everyone in america



[Edited on March 30, 2010 at 4:39 PM. Reason : Well if we were going to use Mean but since its median i got no freaking clue]

3/30/2010 4:37:22 PM

You just don't know what to search for. You are attempting to find out the 'tax burden' of individuals based on income level. Tons of links out there. Here are a couple (outdated, but you do the work)

http://www.allegromedia.com/sugi/taxes/
http://www.washingtonpost.com/wp-dyn/articles/A61178-2004Aug12.html

Here is a calculator on actual tax rates:
http://www.moneychimp.com/features/tax_brackets.htm

Actual data on TAX spread:
http://www.irs.gov/pub/irs-soi/05in05tr.xls

3/30/2010 4:41:50 PM

I wish they would go back further, they are all within the last 20 years, im looking for more of a trend for at least the last 100.

3/30/2010 4:51:57 PM

Good luck. We didnt keep good data on stuff like that too far back.

3/30/2010 4:57:13 PM

how about total tax as a percentage of GDP

3/30/2010 5:08:25 PM

When I filed my taxes it stated I was in the top 5%. We make under 150k.

The breakdown of where the money goes is broken down:

National defense 20%
Veterans and foreign affairs 4%
Medicaid, food stamps, related programs 14%
Unemployment and Social Services 6%
SS, Medicare, and other retirement 37%
Interest on debt 8%
Law enforcement and general govt 2%
Physical, human, and community development 9%

I take home about 1/3 of what I earn. After my deductions I usually get a grand back, but that was with my wife in school. Next year I should be over/under 500 or so.. I hope.(rebate)

3/30/2010 5:15:17 PM

1/3 or 2/3?

3/30/2010 7:12:10 PM

We've done this before, but no harm in breaking it down again:

Median income:

Individual Earner: $32,000
Dual Income House: $67,000 (http://en.wikipedia.org/wiki/American_middle_class#Income)

Federal taxes (either single for individual or married filing joint for dual): 13.7% (http://www.moneychimp.com/features/tax_brackets.htm)

FICA Taxes: 7.65% (15.3 / 2 provided you aren't self employed, http://en.wikipedia.org/wiki/Federal_Insurance_Contributions_Act_tax)

State and local taxes (average, appears to include property/sales tax): 9.7% (http://www.retirementliving.com/RLtaxes.html, see tax burden by state section)

Total: 31.05%

3/30/2010 9:24:51 PM

Why did you divide FICA by two? While the employer writes the check, there is no logical mechanism for that to not be 100% offset by lower worker compensation.

3/30/2010 9:31:31 PM

I want to see that change over time.

3/30/2010 10:02:41 PM

^^ Eh, because it was easier to have someone like you point out that it should be technically included, than to have the importance of that end value (almost 1/3 of your pay) reduced by an argument that I should have divided it.

3/31/2010 7:49:13 AM

^ I am humbled.

3/31/2010 10:08:38 AM

Quote :

"Obama: "I can make a firm pledge, Under my plan, no family making less than $250,000 a year will see any form of tax increase. Not your income tax, not your payroll tax, not your capital gains taxes, not any of your taxes. You will not see any of your taxes increase one single dime." "

-Dover, 9/2008

[Edited on March 31, 2010 at 10:41 AM. Reason : .]

3/31/2010 10:40:42 AM

I thoroughly enjoy paying roughly 35% of my total income as taxes.

Has anybody else considered putting less in their standard 401(k) and more in either a Roth 401(k) or Roth IRA due to the likelihood of taxes increasing dramatically over the next 20-30 years? I've actually heard several people make good arguments for doing so based on our massive deficit spending over the last 2 years.

3/31/2010 2:50:15 PM

Quote :

"1/3 or 2/3? "

Sorry, I take home 2/3. I meant they take 1/3.

^I go up to my 401k match, then max out the Roths. The "free money" in the match is hard to pass up. If you dont have a match, you should def. max out your Roths first, then go to your 401k to lower your tax burden. imo

[Edited on March 31, 2010 at 3:11 PM. Reason : .]

3/31/2010 3:08:20 PM

Quote :

"I thoroughly enjoy paying roughly 35% of my total income as taxes."

Does that include all the embedded taxes you pay elsewhere, or sales tax? It really adds up. Plus, you have to factor in that your employer is matching on social security, etc. That could be money in your pocket.

On the subject of 401k, I'm wary of even putting money into one. It's all paper, and it's all in dollars. I don't trust it a bit. I could be wrong, and maybe I'll miss out on a few thousand in employer-matched 401k contributions over the next couple of years, but I kind of need the money now, and having worked with DC benefits, I know that many people have seen their 401k balances cut in half over the past few years. That could be just the beginning.

3/31/2010 3:15:40 PM

If you are going to go through the trouble of standard deviations and median, why not make "middle" class the middle 50% - 2nd and 3rd quartile?

3/31/2010 3:20:50 PM

There was a colossal argument over this a while back.


It consisted of 28 year-old single engineers making $75k/yr trying to convince me that individuals making $75k/yr are middle class, in spite of all this noise:

http://en.wikipedia.org/wiki/Household_income_in_the_United_States

3/31/2010 3:40:17 PM

d357r0y3r, playing the market is risky, but I dont believe there has ever been a 10 yr period that the market has lost money. So unless you feel we are really heading into uncharted waters (we might be) dont worry about it. There isnt too much you can put money into now and make a good return, but the returns will come. Most of those people who lost 50%, if they left it alone, have gotten a good chuck of it back.

I believe I read that after a recession ends most people earn back about 80% of thier losses in the first year. I wish I could remember where I read that. If I think of it ill post it.

3/31/2010 4:00:50 PM

Quote :

"Has anybody else considered putting less in their standard 401(k) and more in either a Roth 401(k) or Roth IRA due to the likelihood of taxes increasing dramatically over the next 20-30 years?"

You should diversify your tax exposure. You'll start losing money if you think you can always know what's going to happen.

Quote :

"I could be wrong, and maybe I'll miss out on a few thousand in employer-matched 401k contributions over the next couple of years, but I kind of need the money now"

You should definitely contribute to get full employer match, it is absolutely moronic not to. If you need the money that bad, keep contributing and just take a loan out of your 401k, you'll have to pay yourself interest or suffer tax penalties, but it's still worth it.

Quote :

"and having worked with DC benefits, I know that many people have seen their 401k balances cut in half over the past few years"

I've been seeing mine start to double. Hell my retirement plan has been getting 1k growth the past few months.

Quote :

"That could be just the beginning."

You'll never know for sure, you could contribute to a number of other investments. You could even invest in gold or whatever you think is a good investment.

3/31/2010 5:43:46 PM

Quote :

"It consisted of 28 year-old single engineers making $75k/yr trying to convince me that individuals making $75k/yr are middle class, in spite of all this noise:"

People making less than me are lazy and/or dumb. Why should I subsidize them, again? Hell, you can barely do better than a shitty ass apartment on 75k in most big cities.

4/2/2010 1:25:00 AM

"Americans pay far more in individual income taxes than residents of other wealthy nations. Nearly 37 percent of U.S. tax revenue came from personal income taxes in 2006, about 10 percentage points more, on average, than in other industrialized countries. But we pay much less in sales taxes; 17 percent of 2006 U.S. tax receipts were from taxes on goods and services, or about half the 32 percent average for rich countries."

http://www.washingtonpost.com/wp-dyn/content/article/2010/04/01/AR2010040102287_pf.html

4/4/2010 5:22:24 PM

^ When the hell did Union County become such an "affluent" place. Looking at the map they have a higher median income then Mecklenburg (aka Charlotte, Matthews, Lake Norman, Davidson, etc). I remember growing up 2 miles from Stallings (in Union County) crossing the county line was like driving into a 3rd world country with the trailer parks, trashy strip malls, and tractor stores.

Sure Union County has Weddington but I did not think this would be enough to cause such a major shift in median income.

4/4/2010 10:22:16 PM

Quote :

"When the hell did Union County become such an "affluent" place."

like, 10 years ago.

and it's not just weddington

Quote :

"I remember growing up 2 miles from Stallings (in Union County) crossing the county line was like driving into a 3rd world country with the trailer parks, trashy strip malls, and tractor stores."

that's because you were driving on 74 or monroe rd.

[Edited on April 4, 2010 at 10:48 PM. Reason : /]

4/4/2010 10:47:18 PM

this seemed like the best thread on the front page to put this:

4/10/2010 1:50:01 AM

The reason why more people don't pay taxes is because more people don't make enough money to.

Well, that is if you don't count witholdings, ss, etc as "paying taxes", then we all do.

4/10/2010 1:44:04 PM

^^ all those shows, obviously, is that people are getting lazier and are not working as hard, and it's their own faults if they are not rich.

4/10/2010 1:51:33 PM

I work hard and I'm not a loser. Why can't everyone be like me?

*is the majority of people in TSB*

[Edited on April 10, 2010 at 2:04 PM. Reason : .]

4/10/2010 2:04:38 PM

compare to:

and



It does seem that the unemployment rate is decoupled from what the wealthy pay in taxes, and that the poverty rate is mostly flat, but bounces between 10 and 15%.

Neither of these capture the status of the middle class though.

I guess we'd need to look at cost of living vs. middle class income over time.

4/10/2010 2:21:42 PM

Aggregate Income as a percentage of total national income, by quintiles



It looks like something happened in 1981 abouts that caused people to be REALLY lazy and stop working as hard unless they were rich...


[Edited on April 10, 2010 at 2:50 PM. Reason : ]

4/10/2010 2:26:02 PM

I, too, love graphs with no titles, legends, or labeled axes

4/10/2010 2:36:54 PM

^
"Aggregate Income as a percentage of total national income, by quintiles"

4/10/2010 2:50:32 PM

sarijoul's graph has lots of causes. Decreasing family size, growth of two-income households, failure to include all forms of compensation, failure to account for government benefits, failure to account for taxation, the decreased use of corporations to declare income, picking of dates (pre 1917 gap is far more, and post 2006 is far less) and numerous other statistical lies to exaggerate trends.

Many of the same complaints probably apply to moron's graph, but too little information is given to know which.

[Edited on April 10, 2010 at 3:08 PM. Reason : .,.]

4/10/2010 3:07:05 PM

^ it's pretty well known the methodologies behind the CBO data sources. They're very easy to look up, if you aren't already familiar with them.

But it seems like you're saying that the data points to Reaganomics being a failure, but you're uncomfortable with this conclusion, so you're going to presume faults are there, but won't take any steps to see if that's a valid presumption.

4/10/2010 3:17:25 PM

Reaganomics? I was referring to the assertion that we were "re-creating the gap that gave us the great depression".

Now, if by "failure" you mean an increasing gap between the richest and poorest, then there is no dispute from me that inequality has increased. There are lots of very real reasons for inequality to have increased. But there are also lots of reasons for measured inequality to have increased more than actual inequality has, the reasons I gave. So, my point was that it has not increased as much as your graphs claim it has. There are lots of academic papers trying to filter out these false statistical anomalies, and I find them convincing. But even after filtering out all the statistical lies (using per-capita instead of household, factoring for decreased tax avoidance, etc) there is still a very real increase in inequality left over. The causes of which seem to be: increased immigration from a poorer third world, increased market competition, increased "super-star labor economics", a shift in demand away from low skilled to high skilled labor, and a few others. The causes of most of these were technological, having nothing to do with Reagan. The rest were caused by market liberalization, which came from two primary sources, namely deregulation under Carter and falling import tariffs under Clinton. Neither of which had anything to do with Reagan. The only thing I can think of to blame Reagan for is increased immigration. But, if all we care about is inequality then we should applaud this increase, as it has decreased global inequality while it has increased American inequality.

4/10/2010 3:34:49 PM