How Much Money Do You Really Make?

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How often have you head someone say: I make 100k a year. It sounds good doesn't it, but it is not true, regardless of of what your w2 states at the top line. That is so because it is not the top line that matters. What matters is what is left for you to spend after all the taxes which are taken out. Often even that number is too high because after you file your income taxes both state and federal, you find you owe ever more money. In most countries when people speak of their income, they almost always refer to their NET income.

The government loves to mention the gross amount because it allows them to create animus toward those who sound like they are earning so much more. Actually a couple earning $250k per year pays approximately 55% of it in taxes which include state, social security, medicare, federal, and others. This reduces their take home pay down to $150k which to some may sound great, except that it means that each member of the couple only earned $75k. Another way to look at your income is to figure how many months you worked for the governments. If you have to pay 55% percent of your income you have worked for over 6 months for the privilege of living here. In the real world we should start talking about our net income and not the inflated figure of our gross take. It is time to stop kidding ourselves and others.

If effect we are all government employees most of the year. Have you asked yourself what you get in return? Do you think you will be able to survive on the social security you might recieve? We are getting all the downsides of socialism with none of the upsides. If we are going to work for the government we should at least get the government health plan.

The next time you apply for a job you should ask your employer for a net salary. Ask "home much am I going to take home?" Actually this might get both of you thinking more creatively. How can you both keep more money and limit your tax liabilities? Recently Obama has been saying that couples who make $250k per year are wealthy. Well after taxes that couple probably keeps about half. Remember, if you live in a state like California is at 9%. So the couple keeps about 75k each. Not too bad but is that "wealthy" if they have a family? If they live in an expensive part of the country?

Also, Obama does not consider these people to be "working" people. Most likely these people work very hard long hours without much vacation in managerial type positions with considerable responsibility. They definitely work for their money.