And NOW the Other HALF of – The Tale of 2 Income Brackets
Let’s circle back to the tax burden of the 3,054 professionals @$100,000/year that is equal to the combined salaries of these three.
And again, for simplicity sake we aren’t taking into account the deductions. But we very well know, that even if we were, none of these middle-class professionals would qualify for the same business write-offs, or multi-estate property write-offs that these three CEO’s above would.
In Federal taxes alone – the tax burden on each professional (sole earner – head of household) is $19,413 at a % 25 tax rate on $100,000.
Now let’s do some figuring on circulation of this income throughout the American economy –
Each of these men had to pay $19,413 in Fed taxes and just for conjecture, lets imagine that all of these men live in a state without income tax, like all the Billionaires would, if they have listened to their accountant’s advice.
After FED taxes each of these men is left with $80,587.
But let’s not forget the social security tax which is 6.2% on all salaried income up to $117,000. So at $100,000, they would contribute $6,200.00 in 2014.
(* Refer to Part One’s discussion of amount they are compensated to wipe their asses on company time.)
THAT MEANS, our 3 CEO’s pay the same amount of taxes toward social security as our hard-working professionals do!!!
So mysterious that the Social Security is fund is shrinking … Could it be that as fewer workers pay into the system due to decades of corporate layoffs, the Social Security fund becomes increasingly stressed with the baby boomers, who happened to be the best paid generation in American history, are cashing in – in droves? Hmm… could that be why the government is forever increasing the benefits age requirements so that the middle-class, working class and working poor, who put a greater percentage of their income into Social Security will die before they get to reap the benefits?
Well, I digress – that is another story, it couldn’t possibly be related to this one.
So how would the FED TAX & Social Security payments at the present rate affect the yearly income of our “well-compensated” professionals?
After FED and Social Security these Middle-income men supporting a wife and children are left with – $74,387.
Okay, let’s look at how much money they circulate through the economy every month – and then yearly.
Let’s imagine they pay for Shelter – $2500/month (for mortgage on a 4 bedroom house in a neighborhood with good public schools, tax and insurance utilities and maintenance/repairs.) That is $30,000/year.
AFTER Shelter – they have – $44,387
For their transportation costs – for 2 cars (1 car payment $400 and 1 paid, $300 insurance for both, gas – $300; $100 tolls) etc. $1100/month and $13,200/year.
AFTER Transportation – $31,187
Food and Necessities for Mom, Dad and 2 kids – 600/month and $7200/year
After Food and Necessities – $23,987
College Fund – $ 500/child is $1000/month – $12,000/year. (After 18 years – conservatively invested – on a 529 plan earning 2 per cent should yield upwards of $5000) If they start saving at birth of each child, each child will have approx. $110,000 toward college expenses. Considering the present average tuition is $22,826 (See ** & *BELOW), 18 years into the future, the parents will still have to take loans out to put their kids through college and feed and shelter them while they are studying.
AFTER College Fund – $11,987.
This leaves less than $1000 per month to cover the following for 2 adults and 2 children –
Emergency Expenses; Health Insurance Deductibles; Clothing; Retirement; Toys; Entertainment; Vacations, and Monthly credit card payments to cover what isn’t covered by $998/month.
Is it any wonder that middle-income families with children are in debt?
Except for the $12,000/year toward a college fund for the kids, all of this income is widely circulating throughout the economy from micro levels of neighborhood/town to macro levels of state/nation. And 18 years later, even the college fund will be divided between the tuition (paying for salaries of hundreds of people) and living expenses (which is spread throughout the college community for 4 years).
So you have $74,387 (after Fed taxes and Social Security) minus the $12,000 per year college fund – You have $62,387 per professional circulating throughout the WHOLE AMERICAN economy.
Now multiply that by the 3,054 professionals that those 3 CEO salaries could employ – $190,529,898
Hmmm let’s look at the three CEO’s salaries again –
Highest Salary – Charif Souki of Cherniere Energy Inc. – $141,949,280 with $85,785,092 after taxes. ($42,892,546 is 50% of salary after tax)
2nd Highest – Mark J. Gabelli – Gamco Investors – $85,049,800 with $51,417,806 after taxes. ($25,708,903 is 50% of salary after tax)
3rd Highest Lawrence J. Ellison, CEO of Oracle Corp – $78,440,657 with $47,425,884 after taxes. ($23,712,942 is 50% of salary after tax)
Let’s say each of these men spent 50% of their yearly salary on a regular basis – which is BLOODY unlikely, (I mean even luxurious things don’t cost THAT much to warrant that sort of crazy-banana-pants spending.)
But let’s just say, for the sake of conjecture, they did regularly spend 50% of their yearly income – $92,314,391 — wait!!!!! That is LESS than 50% of $190,529,898 – the amount our hard-working professionals provide to the economy EVERY YEAR, whether they want to or not, because as you see they are just paying for the basics of a middle-class lifestyle.
But that can’t possibly be right! How about if these CEO’s spent 75% of their yearly income after tax…. so here we go again
Highest Salary – Charif Souki of Cherniere Energy Inc. – $141,949,280 with $85,785,092 after taxes. ($64,338,819 is 75% of salary after tax)
2nd Highest – Mark J. Gabelli – Gamco Investors – $85,049,800 with $51,417,806 after taxes. ($38,563,354 is 75% of salary after tax)
3rd Highest Lawrence J. Ellison, CEO of Oracle Corp – $78,440,657 with $47,425,884 ($35,569,413 is 75% of salary after tax)
Okay after generously spreading 75% of their yearly income around – say they hire whores galore; get wildly addicted to blow; buy bling-bling; are buying Palatial cribs once or twice a year; buying a Lamborghini, Benz, and Royal Royce each, a Yacht, paying for world-wide trips for all their friends and families, and oh yes, those basic living expenses that the middle-class are so hot and bothered about … maybe they could be spending that amount of dough — it’s possible. BUT WAIIIIIIIT … these are a bunch of uptight, boring, white guys who have an IMAGE to uphold as responsible CEO’s – they don’t have the lifestyles of sports-stars or movie-stars!!!! (Except perhaps for Larry J. )
But what if they did? What would 75 per cent of their combined after tax salaries equal? $138,471,586… WHAAAAAAAAT!
It is STILL $52 million LESS than what the 3,054 middle-class workers provide the American economy in a year upon every year, rain or shine, boom or bust.
And considering how VALUABLE the economic contributions of these middle class members of society are to our nation, how IS IT – that we allow corporations to fire thousands of Americans just so a shareholders can profit from our misery?
Shouldn’t there be a national policy to protect the rights of labor rather than the rights of corporations, considering how much our economy benefits from full-employment of its citizenry? Let alone the benefits to our social fabric?
And if you aren’t asking this question now – Just wait for Part 3
*$22,826 average tuition according tohttp://www.collegedata.com/cs/content/content_payarticle_tmpl.jhtml?articleId=10064