My Interesting Thought of the Day on How Taxes Have Been Raised Stealthily
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I had an interesting thought this morning when I saw a stat about inflation. Since 2007, inflation has totaled 49.7%. That is to say the price of everything went up about 50% since before the Great Recession.
Now, that also means to keep your standard of living from 2007 without it dropping, you need to make 50% more.
Do you make 50% more than in 2007? How much more?
This was in an article about how $100k/yr doesn’t seem like the magic number so many of us millennials grew up aspiring to make. That’s because it isn’t anymore.
Meanwhile, from 2007 to 2022, median household income went from $50,000 to $74,000. Which is to say, on average, everyone is making the exact same amount when it comes to purchasing power parity.
But you know what didn’t change? Tax brackets.
For the same life you could afford on $50k in 2007 paying 8.24% federal income taxes, you need to now make $75,000 paying 11.68% taxes. The increase in effective tax rate for the same standard of living gets even higher when you make more because of progressive taxation.
That is to say, for the same standard of living in 2007, your taxes are now 41.7% higher! Without anyone ever passing a law and no political consequences.
We should be outraged.