Tax day, April 17th, has come and gone but the debate on whether or not everyone is paying their fair share of taxes is far from over. Of course the debate is being magnified this election year. All over the news there are reports of what Mitt Romney’s tax rate was the past two years and debate on the Warren Buffet rule. But the question I always ask in my head is how many of us actually know our own tax rate?
This post is not going to get into who should pay more or who should pay less. But if you know Mitt Romney’s or Warren Buffet’s tax rate last year but have no clue what your own tax rate was, you have bigger problems then what they pay. Look at your own taxes that you just filed or hire a CPA to go over ways that you can legally reduce your tax bill. Worry less about what others are doing to reduce their taxes and instead emulate them! In 2011, my family paid about 4.2% of our income in federal income taxes. We were able to reduce our taxes by putting money into our Health Savings Account (HSA), contributing to a 401(K), and giving 10% of our income to our local church. Our family lives off one income and make a little more than the national median income; should we pay more or less? What’s our fair share?
The point I want to make to you today is to encourage you to stop worrying about what others are doing and focus on improving YOUR economy. Remember, Washington can try, but ultimately they won’t change your finances. What will change your finances is you making the decision to control what you can control . . . yourself!
Do you know your own tax rate for 2011? What do you think is paying your “fair share?”