I've hear a lot about how 40% of people don't pay taxes. I'm not sure what there point is. But, they forget to say "income" when they talk about taxes. I had wondered about how much the poor pay in tax. So, let's say someone with two children is paid $10/hour and works 40 hours a week. Her income tax to Arizona would be zero. (Ditto to US I'm sure)
Let's assume she spends her $20,000 as follows: $9000 in rent; 20 mpg / 20 mpday = 1 gpd * 250 dpy = 250 gpy * 3 $pg = $750 in gas; $1250 in food; 365 packs of smokes or $1825; lets say $2500 for utilities; that leaves $4675 for stuff like close and toys and other sales-taxable stuff.
So, in AZ she pays: $47.50 gas tax; $730 cigarette tax; $261.80 in sales tax; plus whatever portion of rent is property tax. Ignoring the property tax, the individual pays $1039.30 in tax, or 5.2% of her income.
Interesting, yes? no?
Raw data here.
2 comments:
Seems like a pretty low amount spent on food. I dunno anyone who can spend just 100 bucks and change per month even if they never eat out. And driving 20 miles/day sounds reasonable until I think about how often I used to need to refill my tank, and it's way more than once every ten days. Doesn't really affect much except that I think someone on 20K a year doesn't have 4 grand to spend on discretionary (even if necessary) purchases.
Anyway, all that aside did you leave SS and Medicare taxes off the list?
James, you're absolutely right, no payroll taxes here. Also, yes my back of the envelope budget is probably short on something, although frankly, I have NO Idea how people live on 20K, but they do.
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