Yeah, I looked into it a bit and it does take exemptions into account. What you have to remember is that person making 45k pays 7.65% FICA taxes on 100% of their income; 4-8% in state taxes; and 0-2% local taxes; That brings them up to 22 - 27% right there; add a 6% sales tax to that if they are spending 50% of the money make and you are at 30%.
Play around with this calculator for your local area:
https://smartasset.com/taxes/income-taxes#VW0hm6Av0V
Good point, I always forget about FICA.
What you really need to pay attention too though and what actually affects the people who consider themselves middle class (most of them are not) on this forum is this:
Focusing on the bottom 20% or even the bottom 40% is probably the wrong place to look anyway for this exercise and is really a strawman as what can we really tax from this group making less than 30k?
Let's look at the data that hits a little closer to home for the posters here. The 80th percentile (75k) and 90th percentile (115k), why are those two groups paying approximately the same tax rate as the top 1% making 1.5M?
The 90th percentile is paying a 7% payroll tax on 100% of their income while the top 1% have payroll tax on 9% of their income. Sprinkle in local tax exemption of on dividends, 20% tax rates on capital gains and dividends and that unfair high federal income tax rate on the wealthy moves to parity with those making 15x to 20x less.
Like I said before. It is really W2 wage earners who are getting the short end of the stick with the current tax code. At any rate, the current push to provide tax "relief" for those making over 250K is a bit disingenuous. The people in this country who are really taxed the hardest are those W2 wage earners making 250k - 500k range. They make just enough money that 401k deductions don't help much on an absolute basis, AMT reduces deductions, and they are well in the top tax brackets with no relief of taking income from tax advantaged sources. The top 1% like to nestle in with this group when commiserating over their tax burden but in reality, the tax code is far different for the two groups.
I get it, if reducing inequality through taxation is the goal, that makes a lot of sense. That's not everyone's idea of what taxes should be used for.
As for capital gains vs W2, yeah our tax system is set up for capital gains to be taxed differently, because they are different. The corporations are already paying taxes, now you want to tax them again when they give out their profits. It's like if you got taxed for going to work, then got taxed again for cashing your paycheck. It doesn't make much sense unless you want to discourage people from investing. The fact that capital gains can be structured so flexibly makes it even more difficult to tax without just harming poor investors. Rich people can move their money to other countries, set it aside for 20 years without realizing any capital gains, and all sorts of strategies poorer investors can't do.
Where I live, Walmart workers are paid higher wages and don't rely on food stamps. Even Walmart, your shining example, has alternate business practices that are successful. So Walmart has tried exactly what you suggested I try and succeeded; in other countries.
Even within the USA there are different wages depending on the state. How is it that Walmart can be successful, paying higher wages in some places than others? California pays $10.50, Washington pays $11.00 and on the other end Alabama is at $7.25, 30% less. How is it Walmart, with a 30% difference on minimum wage depending on the state, is also found everywhere? If minimum wage was the sole difference, wouldn't the 30% difference in minimum wages offset their razor thin margins of 5-10%?
Please note, I recognize their business success, they make a lot of money, no arguments.
Yeah and in those places are all of the prices the same? I very much doubt it. Even if the prices are the same, those places may have demographics that buy more of the higher margin items, making up the difference. I'm not sure, maybe those locations are just less profitable, or maybe they hire 30% less workers to do the same jobs. I do know that my girlfriend lived in LA for two months this year, and she was shocked at the grocery prices. I'm not sure if she shopped at Walmart, but in general everything was more expensive than it is here in Texas.
Sure they could pay $10.50 in Alabama, but then another grocery store nearby will open up who pays $7.25 and undercuts all of their prices, eventually running them out of business because people want to shop at the place that charges less. There are all sorts of other factors like their negotiating power and quantity discounts, but all things being equal a store that pays more for employees has to charge more.
For what it's worth, Walmart does provide a pretty solid career path for people who take it seriously and want to be promoted up the ranks. You can get all sorts of jobs above minimum wage with a little initiative working there. Even the low on the totem pole jobs get raises over time. Half of their workers are full time.
I think it's very odd that we've come to expect a cashier job that can be learned in a week to pay for someone's entire budget and their healthcare. It's a starter job for someone with no skills.