Oh the Taxes You’ll Pay

Here in the US tax season has begun and my inbox is getting cluttered with offers from tax software companies. This got me thinking a depressing thought: What are all the taxes we pay, and how much do they take?

Federal income tax is the big one. Depending on your earnings you will pay between 10% and 39.6%.

FICA is a federally mandated wage tax comprised of Social Security tax (6.2% on first $127,200) + Medicaid tax (1.45% on the first $200,000). If you are employed as a W-2 employee your employer will deduct these taxes out of every check you earn. In addition the employer pays the same amount (6.2% + 1.45%) as their share of FICA to the IRS.

Then there are state income taxes which range from none in several states including Texas, Nevada and Washington to 13.3% in California. Full list here.

Localities such as cities and some counties have income taxes. For example, if you live inside the city limits of New York City you pay between 2.9–3.4% income tax. Source.

If you own a home you will pay property taxes based on the value of your home. Hawaii charges the lowest rate, 0.28% and homeowners in New Jersey pay the highest, 2.29%,

Then there is personal property tax which is levied by states and counties on property such as vehicles. These taxes are usually collected when vehicles are registered.

We also have sales taxes. Delaware and New Hampshire don’t have them but most states tax sales of goods and services and sometimes food. In my state the tax rate on food is 2%, on everything else 7.7%.

“Sin taxes” are extra taxes placed on the sale of alcohol and tobacco products to make them less appealing to buyers and to help recoup some of the costs these items place on society. In many places the taxes are the biggest component of the cost of cigarettes and hard liquor.

And if you drive you’ll pay gasoline tax which has both a federal and state component. These range from $.30 to $.70 a gallon depending on where you live. Think you can get around these taxes if you drive an electric car? Think again. Several states have implemented taxes on electric cars.

Here’s a summary:

Zerohedge has a list of 97 taxes Americans pay. For conservatives it makes for depressing reading but I bet it makes liberals positively giddy.

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2 Comments

  1. Pj:

    You just need to move up here to New Hampshire, Scott. No state or sales tax!

  2. Scott Kirwin:

    PJ
    I used to live in Delaware and the best/only reason to live in Delaware is no sales tax.
    I even tried buying a tractor there and trucking it down here to NC to save on the 7.75% sales tax on the $20k purchase.
    But the dealer refused citing legal reasons. Not sure what those were considering the state was full of shoppers from NJ, MD and PA every weekend…

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