I Make $6.50 per hour......Am I poor?.......

[Sanslines]

http://articles.moneycentral.msn.com/SavingandDebt/Lear...50AnHourAmIPoor.aspx (http://articles.moneycentral.msn.com/SavingandDebt/LearnToBudget/IMake650AnHourAmIPoor.aspx)

[Sanslines]

http://articles.moneycentral.msn.com/SavingandDebt/Lear...50AnHourAmIPoor.aspx (http://articles.moneycentral.msn.com/SavingandDebt/LearnToBudget/IMake650AnHourAmIPoor.aspx)

[alfredr]

It could happen to anyone.

[johny]

It could happen even to whole nations. I with my 2 and half highest educations am earning this only `on paper` but after exxtracting taxes only 2/3. Yet it is salary at 2,2 staffs - from 6 at morning to 9 at evening. And whole nation is working like this yet poorness is still growing and richess going farer and farer. I read few days ago, the 2% of humans on Planet takes ownership on 50% of all World money. I am sure that Ginee index will grow more in a future, and its not for our benefit.

[Sanslines]

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by johny:
It could happen even to whole nations. I with my 2 and half highest educations am earning this only `on paper` but after exxtracting taxes only 2/3. Yet it is salary at 2,2 staffs - from 6 at morning to 9 at evening. And whole nation is working like this yet poorness is still growing and richess going farer and farer. I read few days ago, the 2% of humans on Planet takes ownership on 50% of all World money. I am sure that Ginee index will grow more in a future, and its not for our benefit. </div></BLOCKQUOTE>

Johny,

Are many people from your country going to the United Kingdom for work? Many from Poland are working in the UK as wages and conditions are much higher and better then in Poland. Once Romania and Bulgaria join the EC, England will once again find itself having to accept huge numbers of newcomers who arrive in search of work.

[alfredr]

Johny has a very important point; when the difference between rich and poor becomes great enough and the rich (individuals or nations) flaunt their wealth in the faces of the poor and the poor lose hope of bettering their situation through hard work and saving and educating their children to get better jobs is when we will see more revolutions and the rise of something that makes the same (false) promise of communism: "We'll take their wealth and give it to all of you and we'll all be equal and everyone will share everything and all will be well."

Capitalism, on the other hand, if limits are not placed on it, offers to exploit natural resources, whereever they might be, or human resources, whereever they might be, in order to make a few people rich.

With limits such as protection of workers rights, free public education, labor unions, environmental protections and some sort of redistribution of wealth (Am I talking graduated income taxes, estate taxes and social welfare programs here? Not popular ideas here in the US right now as middle class wealth and incomes have gotten into territory that used to be, would have been, upper class.) a bit of capitalism is what gives hope of bettering your situation. Creating jobs instead of exploiting workers. No wholesale rape of the environment to extract resources so people can still live in a place. Things like that.

[Sanslines]

From the 2006 Federal Income Tax Form 1040: Let us assume three single people with all three having one exemption and no itemized deductions. Accordingly, all individuals would be able to exempt $5150 for the standard deduction and $3300 for one exemption. Let us assume the first person has a total income of $13,520 ( calculated as $6.50 per hour times 40 hours per week times 52 weeks ), the second person has a total income of $52,000 and the third person has a total income of $104,000.
According to the tax tables, the first person would owe $508 in income tax ( resulting in $13,012 left ), the second person would owe $7,451 in income tax ( resulting in $44,549 left ), and the third person would owe $21,093 in income tax ( resulting in $82,093 left ). The first person pays 3.76 % of their income, the second person pays 14.33 % of their income, and the third person pays 20.28 % of their income. Are these tax rates fair?

[usmc1]

Been there! Done that!

Fortunately, I was blessed with high intelligence, tenacity, self-confidence, height and decent looks and was able to take advantage of opportunities to get an education while being pushed by a labor family that venerated books and education.

So, on those occasions when life has slapped my arrogant butt around, I have managed to reinvent myself and move on through another of life's doors.

But, not everyone has those traits and characteristics and are locked into low paying jobs and need our help extracting themselves.

Poverty is a by-product of capitalism and our challenge is to find a way stymie this inevitable effect of the system by developing programs and policies which will eliminate poverty and allow all our people to share in the weealth and abudance of our economy.

[Naturist Mark]

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by Sanslines:
From the 2006 Federal Income Tax Form 1040: Let us assume three single people with all three having one exemption and no itemized deductions. Accordingly, all individuals would be able to exempt $5150 for the standard deduction and $3300 for one exemption. Let us assume the first person has a total income of $13,520 ( calculated as $6.50 per hour times 40 hours per week times 52 weeks ), the second person has a total income of $52,000 and the third person has a total income of $104,000.
According to the tax tables, the first person would owe $508 in income tax ( resulting in $13,012 left ), the second person would owe $7,451 in income tax ( resulting in $44,549 left ), and the third person would owe $21,093 in income tax ( resulting in $82,093 left ). The first person pays 3.76 % of their income, the second person pays 14.33 % of their income, and the third person pays 20.28 % of their income. Are these tax rates fair? </div></BLOCKQUOTE>

You have left out payroll, property, sales and consumption taxes.

Payroll taxes on both sides of the employee/employer ledger run at about 26% of wages - varies by state (employer side taxes are still part of the cost of labor and represent wages earned by the employee, even though they are not counted as income taxable wages). At least up to around $90k/yr income level where FICA taxes are stopped.

Your low wage earner with gross income of $13.52K would really be earning $16.13k of which $4.2k are paid in payroll taxes, $508 in federal income taxes, perhaps $300 in state and local income taxes, and around $300 in sales and consumption (excise) taxes. That's $5308 in taxes, not counting property taxes - which they WILL be paying, even if only indirectly if renting. This low wage earner is really paying at least 32.9% of what they earn in taxes.

Is that fair?