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HD contains numerous articles and comments about taxes, many of which talk about avoiding or minimizing those taxes. There are some like FICA that are certain. But income taxes are far more complicated and I guess you could say flexible.
I have the impression that Americans are unique in complaining about taxes, in part because they don’t see the connection between taxes and what they provide, at least not as much as many Europeans do.
The United States is not a high tax country, in the lower one third in taxation as a matter of fact.
Many people I talk with confuse the tax brackets with the taxes they actually pay. I had one friend complain about the withholding taken from a bonus, assuming the withholding percentage of 20% was the taxes he would pay.
What really matters is a person’s effective tax rate. Have you ever calculated your federal effective tax rate?
In 2024 mine was 18% which actually surprised me because it felt much higher.
Should we be complaining?
Even the IRS knows it😎
“IRMAA is not considered a tax by the IRS.
IRMAA (Income-Related Monthly Adjustment Amount) is a Medicare premium surcharge, not a federal tax. It’s treated as part of your Medicare Part B and Part D premiums.”
It’s one thing to consider federal and state income taxes, it’s quite another when you add in city taxes, property tax (on homes and vehicles), sales tax, gasoline tax, tax on phone bills, internet bills, IRMMA, and on and on.
My Federal effective tax rate is 16%, plus plus 4% state. This is not bad for a single retiree with a very large income. Of course, I’m paying IRMAA too.
IRMAA is not a tax, it’s an income based deductible health insurance premium. I think I mentioned that before so it’s no different than standard Part B premium except the 💲💲💲😎
IRMAA is a tax. The IRS doesn’t call it that, but it is a means-tested levy on income used to fund a public program, which is the functional definition of a tax. While it is labeled a “premium adjustment,” it behaves exactly like a progressive income tax.