Money Matters
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Our tech team has launched updates to The Nest today. As a result of these updates, members of the Nest Community will need to change their password in order to continue participating in the community. In addition, The Nest community member's avatars will be replaced with generic default avatars. If you wish to revert to your original avatar, you will need to re-upload it via The Nest.
If you have questions about this, please email help@theknot.com.
Thank you.
Note: This only affects The Nest's community members and will not affect members on The Bump or The Knot.
Re: Can we make it on one income?
Thanks, that is a good explanation and distinction. I did understand the 47% was referring only to federal income tax. I wasn't trying to say the parents who don't pay federal taxes don't contribute to public schools...I was more pointing out their children are already getting a free education paid for by everyone (which is a GREAT thing!), so why do they get tax breaks so large they end up paying no federal income tax also.
But I realize was a bit confusing because I was talking about federal taxes at the same time I was talking about a service funded by...I actually thought state taxes...but I see from your response and @hoffse that it is more from property taxes. That was interesting to learn. Now I at least feel slightly better for the property taxes I have to pay, lol.
In my state, the majority of school funding is done through property taxes, which is why our property taxes are so stupidly high. $9,700 per year on a house worth maybe $275,000. Other states structure it differently. My state is always 48, 49, or 50th in state funding for schools.
@smerka, I totally agree with you and that is where my anger is. I don't blame you or anyone else for taking whatever deductions they are entitled to. For example, I own a house and also think its dumb and unfair that interest is a deduction people can take on their taxes. But I take it also, because I can. My posts were not at all meant as an attack on you or the "general you" of families who fall in this category.
But it does make me angry that the system is set up this way. I wasn't even aware of it until today and found it quite shocking.
I would love to see a much simpler tax system...without all the deduction this and that B.S. Maybe a flat rate tax. Maybe do away with income taxes all together and impose a federal sales tax. One pro with that is you'd catch all the criminals who make money doing illegal things like selling drugs. Under our current system, obviously they don't pay taxes on their "profit" from selling coke. But under a sales tax system, they would...every time they used their ill gotten gains to buy something.
Not knowledgeable enough to say either one of those would be a good system...they all have their pros and cons. But when current IRS tax codes are hundreds of pages long...that's a broken system.
That is crazy high property tax. And then to have it coupled with what looks like poor funding for schools is extra frustrating. I'm sure my state, Louisiana, is battling you all for the bottom. Our sales tax is higher than the norm (9%), but our property taxes are at least okay. My two favorite snarky state mottos:
"Louisiana...leading from the bottom for 200 years."
"Thank god for Mississippi and West Virginia, so we don't come in last on everything." (No offense to anyone living in those states...I'm sure you have a similar snarky motto with Louisiana inserted in).
SS is not always taxable. It depends on the other income you have. Also 15% is never taxable.
As a point of relevant information to this MM conversation, one of the latest GOP candidates for President, Dr. Ben Carson, is FOR a flat tax. This would simplify the tax code for all people - reduce or eliminate loop holes - and make it so that IF you earn an income, you pay taxes. Everyone would pay takes at the same rate. Hypothetically, if the flat tax rate were at 5% then a person grossing $100,000 would pay $5,000. A person grossing $50,000 would pay $2,500. A person making $1,500,000 would pay $75,000. Everyone would have skin in the game.
I know there's the argument of, "Well, the person making $50,000 is hit a lot harder than the person making $1,500,000." While that is true, it does level the playing field though. It gives people a feeling of contribution to the greater pot. And, if everyone were contributing, I think you would see a decrease in the class warfare that has run rampant. For so many reasons, a reduction in this problem alone would do wonders for the social health of our Nation. Furthermore, I think there would probably be a threshold minimum, like if you made less than a certain amount annually, then you pay (hypothetically) 1% - something still so you are vested in the group's pot.
This is somewhat related. I have told this story before. When I worked for USBank during the Great Recession, so they did not have to lay anyone off, the Bank decided that across the board every employee from the CEO on down to the PT Tellers would take a 5% pay cut. We all did. It worked. No one was laid off due to the recession! And, it created an upbeat culture in the Bank as a whole. People felt more unified and working together.
I know the USA is quite a bit larger than a bank (duh), but the idea is the same with a flat tax.