Taxes, Taxes, Taxes
Like the saying goes, there are two things in life that are certain, death and taxes. I wonder if people really know how much they’re taxed. It’s probably higher than most realize. Majority of Americans fall within the 25% to 28% tax bracket with their Federal Tax returns. That’s a range between $7,150 to $146,750. For state tax, California has a maximum of 9.3%. Then, there’s sales tax. It’s 8.75% in Alameda County where I live. Everytime you pump gas at the station, you pay 22% in taxes. When you fly domestically, you pay 10% in taxes.
Don’t forget, you also pay toll for highways and bridges. Tolls are essentially a form of tax. How about retirement? A percentage of your social security benefit is taxed. The earnings on your 401K plan is taxed. Thanks to Roth IRA, earnings are tax free. I’m hoping our government don’t change their mind on this one. Eventually when we die, there’s an estate tax. For wealthy Americans with estates over $1.5 million, the effective rate tax is 44% in 2005. Most of us don’t have to worry about that, but if you live in the Bay Area, that figure is much closer than we think because of real estate values. I shouldn’t complain, because it’s a lot worse in other countries.
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