Author Topic: Effective federal income tax rate?  (Read 22631 times)

infogoon

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Effective federal income tax rate?
« on: April 07, 2015, 08:32:42 AM »
This being tax season, I always like to take a look at what my effective tax rate is, as measured by my total federal income tax paid vs. my gross income. This year? 1.4%.

How about you?

Gone Fishing

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Re: Effective federal income tax rate?
« Reply #1 on: April 07, 2015, 08:56:02 AM »
8.3%   

Melf

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Re: Effective federal income tax rate?
« Reply #2 on: April 07, 2015, 09:02:53 AM »
Apparently way too much at 16.3%

Runge

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Re: Effective federal income tax rate?
« Reply #3 on: April 07, 2015, 09:54:12 AM »
Mine was 12.5% for 2014, down from 15.6% for 2013. Both years I've been in the 25% tax bracket.

Middlesbrough

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Re: Effective federal income tax rate?
« Reply #4 on: April 07, 2015, 10:05:30 AM »
11.3% because I fudged up some deferrals.

NotJen

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Re: Effective federal income tax rate?
« Reply #5 on: April 07, 2015, 10:07:25 AM »
17% for 2014. (Fed income only, not including FICA and state tax, 28% with all that included ~ gosh, it's expensive to work!)

Single, no kids, standard deduction, solidly in 25% bracket. :( {Actually, I'm pretty happy about all of that.}

DoubleDown

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Re: Effective federal income tax rate?
« Reply #6 on: April 07, 2015, 10:55:48 AM »
Something like -2% on a combined income of around $90k! That's not a typo.

For the first time ever, I got back MORE from the government than I paid in (and the state paid us even more). So, federal tax rate was 0% but they gave us an additional $2000 in credits. Wife earned close to $60k, I earned $5k (and ER'ed), and I took about $25k in long term capital gains. With kids, 401k contributions, mortgage interest, etc., the federal government gave us back $2000 more than we paid in.

We have one f'ed up tax system when a family of 4 can earn $90k and be given $2000 by the government! I knew we'd pay close to zero in taxes once I ER'ed, but I never dreamed the government would be a source of additional income. Did I feel bad cashing the check? No. (Especially since I've easily paid in hundreds of thousands or even a million dollars in taxes over my lifetime).

zolotiyeruki

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Re: Effective federal income tax rate?
« Reply #7 on: April 07, 2015, 11:23:39 AM »
For federal, about -4.4%, if you only count income tax.

If you add back in FICA (plus employer's part) and Illinois state income tax, it's about 15%.
If you add in property taxes, it's about 27%.

RelaxedGal

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Re: Effective federal income tax rate?
« Reply #8 on: April 07, 2015, 11:36:25 AM »
19%.

Married, 2 incomes, 1 kid, Roth 401Ks, high income, lots of taxable investments, USA.

Drifterrider

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Re: Effective federal income tax rate?
« Reply #9 on: April 07, 2015, 01:19:15 PM »
8.7%

teen persuasion

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Re: Effective federal income tax rate?
« Reply #10 on: April 07, 2015, 01:37:40 PM »
Federal only, -19.64%

Next year's refund will be smaller - another kid over 16, and likely won't claim college kid #3 any longer, so drop to lower category for EITC as well as losing college tax credits.

Gin1984

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Re: Effective federal income tax rate?
« Reply #11 on: April 07, 2015, 01:44:33 PM »
-2%.  We have a rental plus w-2 income.  Two low income wage earners with a kid in a LOCA so we were able to put enough in my husband's 401k to stay within the 10% bracket.

Apples

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Re: Effective federal income tax rate?
« Reply #12 on: April 07, 2015, 01:47:14 PM »
9.8% for MFJ, no kids, 15% tax bracket, Roth IRAs, some taxable investments, standard deduction, and student loan interest deduction.

Kriegsspiel

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Re: Effective federal income tax rate?
« Reply #13 on: April 07, 2015, 01:48:34 PM »
10.3%.

sol

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Re: Effective federal income tax rate?
« Reply #14 on: April 07, 2015, 01:51:23 PM »
3.9 percent if you just divide line 63 federal taxes paid by total W2 income.  And that's on an income well into the 28% tax bracket.

edit: would be 3.0 percent if I included all sources of income.  It's artificially low this year, though, due to solar panel rebate.
« Last Edit: April 07, 2015, 03:32:59 PM by sol »

Roland of Gilead

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Re: Effective federal income tax rate?
« Reply #15 on: April 07, 2015, 02:35:27 PM »
22% effective federal rate (includes a tad of the 3.8% ACA tax but not SS or medicare)

Retired this year though.   Next year baby!  Effective federal rate is gonna be negative with ACA subsidy!

dividendman

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Re: Effective federal income tax rate?
« Reply #16 on: April 07, 2015, 03:02:37 PM »
TurboTax says mine is 24.29% :(

Hey It's Me

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Re: Effective federal income tax rate?
« Reply #17 on: April 07, 2015, 05:10:18 PM »
-11.9%

I made ~$23k last year, and paid for books/fees for college.

ColaMan

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Re: Effective federal income tax rate?
« Reply #18 on: April 07, 2015, 05:49:03 PM »
18.8%, MFJ, 33% bracket.

kpd905

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Re: Effective federal income tax rate?
« Reply #19 on: April 07, 2015, 05:59:08 PM »
8.5% for my income.  This year we'll be married, and I think we might get down to around 7%.

RexualChocolate

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Re: Effective federal income tax rate?
« Reply #20 on: April 07, 2015, 05:59:54 PM »
I'm sure theres some noise with how everyone is calculating their numerator and denominator. The negative effective rates are typically massed depreciation and EITC.

For me, 21%, completely salaried employee without enough politically favored behaviors to warrant itemization. Did not include 401k match or pension in the numerator or denominator nor did I subtract out state tax.

Its expensive to be a single guy with no dependents and no house 8)

sol

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Re: Effective federal income tax rate?
« Reply #21 on: April 07, 2015, 06:20:01 PM »
Its expensive to be a single guy with no dependents and no house 8)

It's expensive to be a RICH single guy with no dependents and no house.

Roland of Gilead

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Re: Effective federal income tax rate?
« Reply #22 on: April 07, 2015, 08:01:36 PM »
Its expensive to be a single guy with no dependents and no house 8)

It's expensive to be a RICH single guy with no dependents and no house.

$120,000 or so is not rich.   It is not even known if he makes that consistently.

Compare this with a lower paid government worker who pays little federal tax yet can retire at age 50 something with a $50k+ pension.  Now that is rich.

Gin1984

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Re: Effective federal income tax rate?
« Reply #23 on: April 07, 2015, 08:42:33 PM »
Its expensive to be a single guy with no dependents and no house 8)

It's expensive to be a RICH single guy with no dependents and no house.

$120,000 or so is not rich.   It is not even known if he makes that consistently.

Compare this with a lower paid government worker who pays little federal tax yet can retire at age 50 something with a $50k+ pension.  Now that is rich.
Lol, or a non-governmental employee who makes $120,000 and retires with a $42,000 pension plus half a mill in a 401k, like my mom.  I think I'd rather have the high pay and the pension than be a governmental worker.

sol

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Re: Effective federal income tax rate?
« Reply #24 on: April 07, 2015, 08:47:50 PM »
Compare this with a lower paid government worker who pays little federal tax yet can retire at age 50 something with a $50k+ pension.  Now that is rich.

Why, exactly, do you think that government workers pay "little federal tax"?  Government workers pay the exact same tax rate as every other working stiff, and have since 1987.

And speaking as one of those lower paid government workers with a pension, I should point out that I can retire at age 57 and get $23,100 per year.  It's not chump change, but it's hardly a sweetheart deal either.

beltim

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Re: Effective federal income tax rate?
« Reply #25 on: April 07, 2015, 09:10:05 PM »
Its expensive to be a single guy with no dependents and no house 8)

It's expensive to be a RICH single guy with no dependents and no house.

$120,000 or so is not rich.   It is not even known if he makes that consistently.

Compare this with a lower paid government worker who pays little federal tax yet can retire at age 50 something with a $50k+ pension.  Now that is rich.

I'll give you one guess how many federal employees can retire at age 50 with a pension in excess of $50k.

Drifterrider

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Re: Effective federal income tax rate?
« Reply #26 on: April 08, 2015, 06:27:13 AM »
Its expensive to be a single guy with no dependents and no house 8)

It's expensive to be a RICH single guy with no dependents and no house.

$120,000 or so is not rich.   It is not even known if he makes that consistently.

Compare this with a lower paid government worker who pays little federal tax yet can retire at age 50 something with a $50k+ pension.  Now that is rich.

I'm a higher paid government worker who can retire at 56.  I pay lots of federal taxes and I also pay into my retirement.  I'm still not rich.

BUT, I save a lot and spend much less.

thd7t

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Re: Effective federal income tax rate?
« Reply #27 on: April 08, 2015, 07:19:43 AM »
Its expensive to be a single guy with no dependents and no house 8)

It's expensive to be a RICH single guy with no dependents and no house.

$120,000 or so is not rich.   It is not even known if he makes that consistently.

Compare this with a lower paid government worker who pays little federal tax yet can retire at age 50 something with a $50k+ pension.  Now that is rich.
$120,000 is in the top quintile of households in the US.  We don't have a definition of Rich, but he is a high income earner, by US standards.  There are only five cities in the US where that doesn't get you into the top 25% of incomes.  For a single person, that's pretty great.

Roland of Gilead

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Re: Effective federal income tax rate?
« Reply #28 on: April 08, 2015, 07:33:21 AM »
After this year I don't really care about the fairness of the tax code since we will be pulling up to the trough.

But anyway, here is a possible example:

State/Federal civil engineer, making $70,000 a year, pays 5% of their salary into a pension fund, employer pays 15% (the figures are all over the place, some pay only a couple percent).   After 30 years they are eligible for a COLA'd pension of $45,000 per year, which is worth near $1,000,000 if purchased as an annuity from a private insurance company.

Private sector engineer, makes $90,000 a year doing the same work, no pension.  Pays 40% tax (SS + federal + medicare + state) on that extra $20,000, taking home only $12,000 of it.

For 30 years he puts that $12,000 in a conservative investment so he can be guaranteed to be able to buy an annuity.   He will have nowhere near enough to buy a COLA'd $45,000 annuity.   Part of this is because he was heavily taxed and the other person was not, even though they essentially had the same spending money after setting aside retirement.


beltim

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Re: Effective federal income tax rate?
« Reply #29 on: April 08, 2015, 07:54:06 AM »
After this year I don't really care about the fairness of the tax code since we will be pulling up to the trough.

But anyway, here is a possible example:

State/Federal civil engineer, making $70,000 a year, pays 5% of their salary into a pension fund, employer pays 15% (the figures are all over the place, some pay only a couple percent).   After 30 years they are eligible for a COLA'd pension of $45,000 per year, which is worth near $1,000,000 if purchased as an annuity from a private insurance company.

Private sector engineer, makes $90,000 a year doing the same work, no pension.  Pays 40% tax (SS + federal + medicare + state) on that extra $20,000, taking home only $12,000 of it.

For 30 years he puts that $12,000 in a conservative investment so he can be guaranteed to be able to buy an annuity.   He will have nowhere near enough to buy a COLA'd $45,000 annuity.   Part of this is because he was heavily taxed and the other person was not, even though they essentially had the same spending money after setting aside retirement.

If the engineer worked for the Federal government the pension would be $21,000 a year.  So you're only off by 114%.

Stop making up numbers that have no basis in reality.

sol

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Re: Effective federal income tax rate?
« Reply #30 on: April 08, 2015, 07:54:57 AM »
I'll give you one guess how many federal employees can retire at age 50 with a pension in excess of $50k.

The GS pay scale currently maxes out at ~$150,000/year including locality-specific bonuses, and to get that high you basically need to run a federal facility of some sort, like a supermax prison or the regional office for a cabinet level agency.  50k divided by 150k is 33.3 and federal pensions pay 1% per year of service, so you'd only need to work 33.3 years to get a $50k pension at the highest possible GS pay grade and step.  I guess maybe you could start at age 16 and then work your 33.3 years, and then retire at age 50 with $50k in pension.  See?  Totally possible.  Sort of.

Also, former Presidents of the United States receive a lifetime pension greater than $50k/year, and they are technically federal employees too.  Of course, none of them has ever been retired at age 50.  Kennedy would have been the first, had he survived a single 4 year term and not been re-elected.

But anyway, here is a possible example:

State/Federal civil engineer, making $70,000 a year, pays 5% of their salary into a pension fund, employer pays 15% (the figures are all over the place, some pay only a couple percent).   After 30 years they are eligible for a COLA'd pension of $45,000 per year, which is worth near $1,000,000 if purchased as an annuity from a private insurance company.

What are you basing those numbers on?  Why do you think a government employee who makes $70k/year gets a $45k/year pension?  That would require 45/70 times 1% per year would mean that person had to work 64 years to get that pension.  Even if they started at 18, that person's life expectancy at age 64+18=82 is short enough that even a pension of $100k/year wouldn't get back out everything they had paid in.

I think you have some serious misconceptions about how the federal pension system works. 

beltim

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Re: Effective federal income tax rate?
« Reply #31 on: April 08, 2015, 08:06:14 AM »
I'll give you one guess how many federal employees can retire at age 50 with a pension in excess of $50k.

The GS pay scale currently maxes out at ~$150,000/year including locality-specific bonuses, and to get that high you basically need to run a federal facility of some sort, like a supermax prison or the regional office for a cabinet level agency.  50k divided by 150k is 33.3 and federal pensions pay 1% per year of service, so you'd only need to work 33.3 years to get a $50k pension at the highest possible GS pay grade and step.  I guess maybe you could start at age 16 and then work your 33.3 years, and then retire at age 50 with $50k in pension.  See?  Totally possible.  Sort of.

Also, former Presidents of the United States receive a lifetime pension greater than $50k/year, and they are technically federal employees too.  Of course, none of them has ever been retired at age 50.  Kennedy would have been the first, had he survived a single 4 year term and not been re-elected.

But anyway, here is a possible example:

State/Federal civil engineer, making $70,000 a year, pays 5% of their salary into a pension fund, employer pays 15% (the figures are all over the place, some pay only a couple percent).   After 30 years they are eligible for a COLA'd pension of $45,000 per year, which is worth near $1,000,000 if purchased as an annuity from a private insurance company.

What are you basing those numbers on?  Why do you think a government employee who makes $70k/year gets a $45k/year pension?  That would require 45/70 times 1% per year would mean that person had to work 64 years to get that pension.  Even if they started at 18, that person's life expectancy at age 64+18=82 is short enough that even a pension of $100k/year wouldn't get back out everything they had paid in.

I think you have some serious misconceptions about how the federal pension system works.

Interesting case study.  I wonder if anyone hit GS15-10 at age 50 with 33.3 years of service.  I'm thinking no, if only because I doubt anyone who reaches that level doesn't have a college education.

Actually, I was thinking along the same lines as your second paragraph - members of Congress who serve 20 years get a pension in excess of 50k too - because they get 1.7% per year for their first 20 years of service.  So a Representative has to be elected by age 30, and a senator would have to be elected exactly at age 30 I'm order to get 20 years of service before they turn 51.  Of course, there's only 1 Representative in Congress who was elected at age 30, and the youngest Senator was 36 when he was elected, so in practice this doesn't happen very often. But it's totally technically possible.

Roland of Gilead

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Re: Effective federal income tax rate?
« Reply #32 on: April 08, 2015, 08:20:24 AM »
Perhaps I should have said state, not federal.  It seems federal pension benefits are some of the lower ones.

It is very hard to find exact sources online for various salaries and pensions.

I did read awhile back that the average state pension is $25,000, which seems higher than almost all federal pensions except the highest earners.

My point was that these pensions allow for tax avoidance, or at least tax deferral.   This masks the income of the pensioner making them look poor compared to the "rich" guy who must save for all of his retirement.

Gin1984

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Re: Effective federal income tax rate?
« Reply #33 on: April 08, 2015, 08:23:29 AM »
Perhaps I should have said state, not federal.  It seems federal pension benefits are some of the lower ones.

It is very hard to find exact sources online for various salaries and pensions.

I did read awhile back that the average state pension is $25,000, which seems higher than almost all federal pensions except the highest earners.

My point was that these pensions allow for tax avoidance, or at least tax deferral.   This masks the income of the pensioner making them look poor compared to the "rich" guy who must save for all of his retirement.
As a grad student I worked for the state of NY.  We had a pension system, we paid in 3%.  The techs paid in 5%.  Neither of us got a match from the state.  And on top of that, they are not pre-tax on the state level.

Roland of Gilead

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Re: Effective federal income tax rate?
« Reply #34 on: April 08, 2015, 08:32:34 AM »
As a grad student I worked for the state of NY.  We had a pension system, we paid in 3%.  The techs paid in 5%.  Neither of us got a match from the state.  And on top of that, they are not pre-tax on the state level.

That isn't enough information to work with.  3% of what, your gross salary?   So say you were making $40k, you were paying in $1200 a year?   No state match...your 3% was just going into a saving account and would be used by the state to buy you an annuity with whatever was there?   It must have been a tiny tiny pension...after 25 years of a $1200 a year contribution, your pension would have been tiny tiny (less than $10,000 a year for sure).   Was it that low?

BlueHouse

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Re: Effective federal income tax rate?
« Reply #35 on: April 08, 2015, 08:35:32 AM »
On topic:  23.5%  Line 63 divided by Line 22. 

Roland of Gilead

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Re: Effective federal income tax rate?
« Reply #36 on: April 08, 2015, 08:38:17 AM »
Here is some info I found on the state of NY pension payouts (from 2011)

http://www.empirecenter.org/publications/measuring-average-public-pensions/

If you throw out the average, which including payments to people who did not put in a full term of service, the average pension benefit is over $55,000 a year!

That is a lot of tax deferral!

Gin1984

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Re: Effective federal income tax rate?
« Reply #37 on: April 08, 2015, 08:38:38 AM »
As a grad student I worked for the state of NY.  We had a pension system, we paid in 3%.  The techs paid in 5%.  Neither of us got a match from the state.  And on top of that, they are not pre-tax on the state level.

That isn't enough information to work with.  3% of what, your gross salary?   So say you were making $40k, you were paying in $1200 a year?   No state match...your 3% was just going into a saving account and would be used by the state to buy you an annuity with whatever was there?   It must have been a tiny tiny pension...after 25 years of a $1200 a year contribution, your pension would have been tiny tiny (less than $10,000 a year for sure).   Was it that low?
I paid in 3% of my gross salary which was $25,520 when I left, the techs ranged from 30K to 50K and you are right, it was tiny.  I can't remember exactly how much you could get but I think it was $300 and something per month if you had it the full five years.  Obviously the techs got more because they were in it for longer and paid more in.  The state invested it, just like they would any of the other pension money.  That is the point, many pensions are not that much unless you stay for a very long time.  Oh and it was not indexed to inflation.

beltim

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Re: Effective federal income tax rate?
« Reply #38 on: April 08, 2015, 08:39:16 AM »
Perhaps I should have said state, not federal.  It seems federal pension benefits are some of the lower ones.

It is very hard to find exact sources online for various salaries and pensions.

I did read awhile back that the average state pension is $25,000, which seems higher than almost all federal pensions except the highest earners.

My point was that these pensions allow for tax avoidance, or at least tax deferral.   This masks the income of the pensioner making them look poor compared to the "rich" guy who must save for all of his retirement.

The average cost to the state of offering pensions is 5% of salary: http://assets.aarp.org/www.aarp.org_/articles/work/contribution-requirements.pdf

This varies significantly by state: table 4 from http://www.massbudget.org/report_window.php?loc=Pension_3_11.html

Gin1984

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Re: Effective federal income tax rate?
« Reply #39 on: April 08, 2015, 08:39:49 AM »
Here is some info I found on the state of NY pension payouts (from 2011)

http://www.empirecenter.org/publications/measuring-average-public-pensions/

If you throw out the average, which including payments to people who did not put in a full term of service, the average pension benefit is over $55,000 a year!

That is a lot of tax deferral!
Except that it is not deferred at the state level, as I said.  Also NYC costs pull it up.

mrshudson

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Re: Effective federal income tax rate?
« Reply #40 on: April 08, 2015, 08:46:27 AM »
10.6% - defined by total tax divided by gross income and 14% if you include only the W2 wage box - tax sheltered retirement contributions brought down our percentage.

Roland of Gilead

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Re: Effective federal income tax rate?
« Reply #41 on: April 08, 2015, 08:46:47 AM »
Except that it is not deferred at the state level, as I said.  Also NYC costs pull it up.

It is deferred.   You don't pay fed, state, SS, medicare tax on the portion of the pension that is funded by the state at the time they make the contribution and you don't pay any tax during the years that the money is growing.

If I save in a private fund, I immediately pay tax on my contribution and I pay any interest and dividend taxes every year.

Emilyngh

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Re: Effective federal income tax rate?
« Reply #42 on: April 08, 2015, 08:47:16 AM »
-1.4%


beltim

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Re: Effective federal income tax rate?
« Reply #43 on: April 08, 2015, 08:50:54 AM »
Except that it is not deferred at the state level, as I said.  Also NYC costs pull it up.

It is deferred.   You don't pay fed, state, SS, medicare tax on the portion of the pension that is funded by the state at the time they make the contribution and you don't pay any tax during the years that the money is growing.

If I save in a private fund, I immediately pay tax on my contribution and I pay any interest and dividend taxes every year.

Then you're doing it wrong.  401ks allow for much higher self-created pensions than any government one.  And though that is subject to Social Security, you're also actually getting Social Security - which many state employees do not.

Roland of Gilead

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Re: Effective federal income tax rate?
« Reply #44 on: April 08, 2015, 08:53:32 AM »
Except that it is not deferred at the state level, as I said.  Also NYC costs pull it up.

It is deferred.   You don't pay fed, state, SS, medicare tax on the portion of the pension that is funded by the state at the time they make the contribution and you don't pay any tax during the years that the money is growing.

If I save in a private fund, I immediately pay tax on my contribution and I pay any interest and dividend taxes every year.

Then you're doing it wrong.  401ks allow for much higher self-created pensions than any government one.  And though that is subject to Social Security, you're also actually getting Social Security - which many state employees do not.

Most government workers are eligible for 401K or some similar plan.  Feds get TSP with salary match for some small %.   Most are eligible for SS.  The number is something like 80% of state workers are eligible for SS.

beltim

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Re: Effective federal income tax rate?
« Reply #45 on: April 08, 2015, 08:57:19 AM »
Except that it is not deferred at the state level, as I said.  Also NYC costs pull it up.

It is deferred.   You don't pay fed, state, SS, medicare tax on the portion of the pension that is funded by the state at the time they make the contribution and you don't pay any tax during the years that the money is growing.

If I save in a private fund, I immediately pay tax on my contribution and I pay any interest and dividend taxes every year.

Then you're doing it wrong.  401ks allow for much higher self-created pensions than any government one.  And though that is subject to Social Security, you're also actually getting Social Security - which many state employees do not.

Most government workers are eligible for 401K or some similar plan.  Feds get TSP with salary match for some small %.   Most are eligible for SS.  The number is something like 80% of state workers are eligible for SS.

That's true.  But most government workers are also contributing to their pension.  For current federal workers, that's 4.4% of their paycheck.  In many cases employees would be better off self-funding and investing in the market.

Roland of Gilead

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Re: Effective federal income tax rate?
« Reply #46 on: April 08, 2015, 09:03:21 AM »
Can we just say the tax system is unfair and leave it at that?   There are millionaires who pay very little tax, corporations who offshore money, pensioners who paid little into a system, upper middle class who arrange enough deductions to pay near zero.

The only way to beat it is not to play at all.   That is my choice.

Drifterrider

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Re: Effective federal income tax rate?
« Reply #47 on: April 08, 2015, 12:56:03 PM »
I'll give you one guess how many federal employees can retire at age 50 with a pension in excess of $50k.

The GS pay scale currently maxes out at ~$150,000/year including locality-specific bonuses, and to get that high you basically need to run a federal facility of some sort, like a supermax prison or the regional office for a cabinet level agency.  50k divided by 150k is 33.3 and federal pensions pay 1% per year of service, so you'd only need to work 33.3 years to get a $50k pension at the highest possible GS pay grade and step.  I guess maybe you could start at age 16 and then work your 33.3 years, and then retire at age 50 with $50k in pension.  See?  Totally possible.  Sort of.

Also, former Presidents of the United States receive a lifetime pension greater than $50k/year, and they are technically federal employees too.  Of course, none of them has ever been retired at age 50.  Kennedy would have been the first, had he survived a single 4 year term and not been re-elected.

But anyway, here is a possible example:

State/Federal civil engineer, making $70,000 a year, pays 5% of their salary into a pension fund, employer pays 15% (the figures are all over the place, some pay only a couple percent).   After 30 years they are eligible for a COLA'd pension of $45,000 per year, which is worth near $1,000,000 if purchased as an annuity from a private insurance company.

What are you basing those numbers on?  Why do you think a government employee who makes $70k/year gets a $45k/year pension?  That would require 45/70 times 1% per year would mean that person had to work 64 years to get that pension.  Even if they started at 18, that person's life expectancy at age 64+18=82 is short enough that even a pension of $100k/year wouldn't get back out everything they had paid in.

I think you have some serious misconceptions about how the federal pension system works.

Interesting case study.  I wonder if anyone hit GS15-10 at age 50 with 33.3 years of service.  I'm thinking no, if only because I doubt anyone who reaches that level doesn't have a college education.

Actually, I was thinking along the same lines as your second paragraph - members of Congress who serve 20 years get a pension in excess of 50k too - because they get 1.7% per year for their first 20 years of service.  So a Representative has to be elected by age 30, and a senator would have to be elected exactly at age 30 I'm order to get 20 years of service before they turn 51.  Of course, there's only 1 Representative in Congress who was elected at age 30, and the youngest Senator was 36 when he was elected, so in practice this doesn't happen very often. But it's totally technically possible.

Don't forget the MRA (Minimum retirement age).  For those who have less than 30 years, they can only start drawing their pension at age 60 with 20 years and at age 62 with 5 years.  Also, anyone in office before 1986 is under CSRS and those afterwards are under FERS.  I've earned my pension, paid into my pension and will take it when I can but I'm far from rich.

Drifterrider

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Re: Effective federal income tax rate?
« Reply #48 on: April 08, 2015, 01:00:07 PM »
On topic:  23.5%  Line 63 divided by Line 22.

BUT.....what were your earnings (Box 3 of your W-2) divided by line 63?

beltim

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Re: Effective federal income tax rate?
« Reply #49 on: April 08, 2015, 01:01:17 PM »
Don't forget the MRA (Minimum retirement age).  For those who have less than 30 years, they can only start drawing their pension at age 60 with 20 years and at age 62 with 5 years.  Also, anyone in office before 1986 is under CSRS and those afterwards are under FERS.  I've earned my pension, paid into my pension and will take it when I can but I'm far from rich.

Yeah, it turns out MRA for members of Congress is 50, if they have 20 years of Federal service, with at least 10 of those in Congress.  Interesting, no?