So today is tax day in the United States. I feel like celebrating. Man, taxes are low in this country.
My wife and I don't own a home (yet) or have children (yet) and pretty much don't qualify for any special tax deductions. No home office, no capital gains (who had any in 2008?), some moving expenses and plenty to charity but not enough to make itemizing worth our while. So we pretty much paid the statutory rate. And what did that come to? A whopping 32%, including what we paid the Commonwealth of Massachusetts. Our combined marginal rate was a little higher, a hair under 40%, all told.
We're pretty high up in the income distribution, according to this table.
What about indirect taxes? There are two ways to calculate that. If you assume that people pay indirect taxes in rough proportion to their income, they added (including corporate income taxes as "indirect") about 16 percent to our tax bill. But that's not right --- indirect taxes are fairly regressive. If you assume that indirect taxes are paid as lump sums, then they took about 4 percent of our income. But that's probably too low. Let's split the difference, call it 10 percent.
So the entities that provide us with old-age wage insurance, old-age health insurance, police, basic education, pirate-killing, roads, regulation, and whole lot of other things took only four-tenths of our income in 2008.
That seems cheap. We could pay quite a bit more. At least until we have children.
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