I just finished my tax return (though I'm waiting a couple weeks before filing to make sure nothing else turns up in the mail) and I thought it would be interesting to compare overall tax rates with other EREers, both in the U.S. and from other countries.
I'm using "total income" (box 22 of the W2) as my denominator. This excludes 401k contributions, which makes sense to me because they haven't been taxed yet (at least for federal income tax). For some people it might be appropriate to use "adjusted gross income" (box 37), or some number between the two (they were the same for me).
For 2011, my total federal tax burden was 16.7%. 10.8 percentage points from federal income tax, 5.9 from social security/medicare taxes. No state income tax as I live in WA (though I suppose I could estimate sales tax from my expense tracking).
Comparing tax rates
I know my actual taxes are well over twice the number that TurboTax spits out on the front of my return.
The entire tax system is a complex farce to hide how bad you're getting screwed... Kind of like the monetary/banking system.
Wow, I'm a cynical baby today!:D
Still, looking forward to the day when I can lower my tax burden to almost nothing as my own personal middle finger to the system.
The entire tax system is a complex farce to hide how bad you're getting screwed... Kind of like the monetary/banking system.
Wow, I'm a cynical baby today!:D
Still, looking forward to the day when I can lower my tax burden to almost nothing as my own personal middle finger to the system.