The stealth tax hike

xmacro

Good article from the WSJ:

Anyone still need a reason to abandon "grand bargains" and deals negotiated between this President and GOP Congressional leaders? Here it is: The revival of two dormant provisions of the tax code means the much ballyhooed $450,000 income threshold for the highest tax rate is largely fake.

The two provisions are the infamous PEP and Pease, which aficionados of stealth tax increases will recognize immediately as relics of the 1990 tax increase. Those measures, which limit deductions and exemptions for higher-income taxpayers, expired in 2010. The Obama tax bill revived them this week. It isn't going to be pretty.

Under the new law, some of the steepest tax increases may fall on upper-middle class earners with incomes just above $250,000. Here's why:

During the negotiations, the White House won a concession from Republicans to allow phaseouts for personal exemptions and limitations on itemized deductions, starting at an income of $250,000 for individuals and $300,000 for joint filers.

The Senate Finance Committee informs us that in effect the loss of the personal exemptions, currently $3,800 per family member, can mean a 4.4 percentage point rise in the marginal tax rate for a married couple with two kids and incomes above $250,000. A family with four kids in that income range faces about a six percentage point marginal rate hike. The restored limitations on itemized deductions can raise the tax rate by another one percentage point.

High-income Americans with incomes of more than $1 million may lose up to 80% of their itemized deductions for home mortgage payments, health care, state and local taxes—and charities. Cue the local symphony's development office.

Add it together and families in the 33% tax bracket could see their effective marginal rate paid on each additional dollar earned rise to above 38%.

A store manager married to a dentist with a combined income of, say, $350,000 may pay a higher tax rate under the new law than if the tax code had simply reverted back to the Clinton-era rates that Mr. Obama championed. Those earning more than $450,000 would see their de facto tax rate rise to about 41% under the new law, not 39.6%. Add in the new ObamaCare investment taxes and the tax rate on interest income is close to 45%.

How did this happen? Recall that early in the fiscal-cliff negotiations House Speaker John Boehner offered to cap itemized deductions to raise $800 billion, in lieu of raising tax rates, if the President would agree to spending cuts. The White House rejected that.

Mr. Obama then insisted on reviving PEP and Pease, thereby recapturing much of the income he claimed to be "compromising" away by agreeing to a higher income threshold for the top bracket. But instead of using phaseouts to offset higher rates as Mitt Romney proposed, Mr. Obama insisted on raising tax rates too.

Democrats are advertising the higher $400,000-$450,000 threshold as a victory for affluent taxpayers in blue states. But with PEP and Pease these Democrats are hammering their own constituents via the backdoor.

Taxpayers in blue states claim roughly twice as much in itemized deductions as those in red states. Income tax rates are steeper in California and New York than Texas and Utah. Chuck Schumer just put a tax bull's-eye on upper-income Manhattanites, and Barbara Boxer whacked Silicon Valley. Some $150 billion, about one-quarter of all the money raised by this tax bill, will come from this stealth tax hike.

Mr. Obama purports this is merely "a return to the Clinton-era tax rates." But capital-gains rates will be about three to five percentage points higher than in the 1990s, the Medicare tax is higher, and his stealth tax will raise personal rates higher than advertised. Forget the golden Clinton memories. Mr. Obama is pushing the U.S. back to the Carter era.

Amos_Umwhat

I read Michael Reagan's op-ed piece on this. He points out that all they've done is kick the can down the road, just as everyone knew they would, and that the money that comes in from these new taxes, excuse me, loophole closures, will probably be spent by the end of the week.

Sounds right.

We must first stop the hemmorhaging if we are to recover. Problem is, no one wants to take the hit. Too many power structures depend on the system of welfare that we've created. Corporate welfare, foreign welfare, medical welfare, societal welfare.

We all know there's no such thing as a free lunch, but we sure hope someone else is paying.
How does this end, other than collapse? Seriously, how? All the elected officials seem to be able to do is keep doing the same thing, and expecting new results. Very frustrating.
.

xmacro

True. The tax structure is way too old and complicated; it needs to be seriously reformed and Washington decoupled from the economy. It's incredibly annoying to watch the stock market react so much to Washington's decrees and decisions, for a $15 trillion economy to be so dependent on about 600 economic idiots in DC.

Vulchor

something we all agree on....theres a new year's miracle right there:)

Also, welcome back Macro...my nemesis;)

Amos_Umwhat

Vulchor:

something we all agree on....theres a new year's miracle right there:)

Also, welcome back Macro...my nemesis;)

Kind of scary, eh?

raisindot

While agreeing in principle that government spending cuts are absolutely necessary and that everything from corporate welfare for oil companies and agribusiness to Social Security, Medicaid and Medicare, public broadcasting, highway spending, military pork, educational grants, arts spending, silly research funding, and U.S. employee pensions needs to take their fair share of cuts, I shed no tears for any kind of up-front of phantom changes in tax policies that force people making $250,000 or more to pay higher taxes. Nor do I worry about capital gains millionaires raking bigger tax hits. The last time taxes were raised on the rich--which occurred during the recession during the George H.W. Bush administration--the U.S. economy began one of the longest and strongest periods of economic expansion, job creation and wealth creation in its history, and the added tax and corporate tax revenues turned the record deficit into a surplus by the turn of the century without draconian cuts in social services or discretionary spending. Obviously, we're in a much different situation right now, where global economic growth is still weak and both parties need to get off their ideological high-horses, show some courage and make their constituencies share some of the collective fiscal pain, but I'm all for making the rich take a disproportionate share of revenue generation.

xmacro

raisindot:

While agreeing in principle that government spending cuts are absolutely necessary and that everything from corporate welfare for oil companies and agribusiness to Social Security, Medicaid and Medicare, public broadcasting, highway spending, military pork, educational grants, arts spending, silly research funding, and U.S. employee pensions needs to take their fair share of cuts, I shed no tears for any kind of up-front of phantom changes in tax policies that force people making $250,000 or more to pay higher taxes. Nor do I worry about capital gains millionaires raking bigger tax hits. The last time taxes were raised on the rich--which occurred during the recession during the George H.W. Bush administration--the U.S. economy began one of the longest and strongest periods of economic expansion, job creation and wealth creation in its history, and the added tax and corporate tax revenues turned the record deficit into a surplus by the turn of the century without draconian cuts in social services or discretionary spending. Obviously, we're in a much different situation right now, where global economic growth is still weak and both parties need to get off their ideological high-horses, show some courage and make their constituencies share some of the collective fiscal pain, but I'm all for making the rich take a disproportionate share of revenue generation.

You might like this then, from 2009; a compilation, sourced from the IRS: http://www.ntu.org/tax-basics/who-pays-income-taxes.html

Cliff notes:
- Top 10% of taxpyers pay 70% of all taxes
- Top 25% of taxpayers pay 87% of all taxes
- Top 50% of taxpayers pay 98% of all taxes
- Bottom 50% of taxpayers pay 2% of all taxes

The problem isn't that we're not taxing the rich enough; the problem is that there's nowhere near enough money at the top to pay for everything. If you look at the actual numbers, you realize that the middle class, those at and below $100,000, is where the real money is, and where taxes need to go if you want to close the deficit via revenues.

Amos_Umwhat

xmacro:

raisindot:

While agreeing in principle that government spending cuts are absolutely necessary and that everything from corporate welfare for oil companies and agribusiness to Social Security, Medicaid and Medicare, public broadcasting, highway spending, military pork, educational grants, arts spending, silly research funding, and U.S. employee pensions needs to take their fair share of cuts, I shed no tears for any kind of up-front of phantom changes in tax policies that force people making $250,000 or more to pay higher taxes. Nor do I worry about capital gains millionaires raking bigger tax hits. The last time taxes were raised on the rich--which occurred during the recession during the George H.W. Bush administration--the U.S. economy began one of the longest and strongest periods of economic expansion, job creation and wealth creation in its history, and the added tax and corporate tax revenues turned the record deficit into a surplus by the turn of the century without draconian cuts in social services or discretionary spending. Obviously, we're in a much different situation right now, where global economic growth is still weak and both parties need to get off their ideological high-horses, show some courage and make their constituencies share some of the collective fiscal pain, but I'm all for making the rich take a disproportionate share of revenue generation.

You might like this then, from 2009; a compilation, sourced from the IRS: http://www.ntu.org/tax-basics/who-pays-income-taxes.html

Cliff notes:
- Top 10% of taxpyers pay 70% of all taxes
- Top 25% of taxpayers pay 87% of all taxes
- Top 50% of taxpayers pay 98% of all taxes
- Bottom 50% of taxpayers pay 2% of all taxes

The problem isn't that we're not taxing the rich enough; the problem is that there's nowhere near enough money at the top to pay for everything. If you look at the actual numbers, you realize that the middle class, those at and below $100,000, is where the real money is, and where taxes need to go if you want to close the deficit via revenues.

My question to this is: Who owns the money? I don't know the %'s, but, let's say the top 10% own 90% of the money, then they should pay 90% of the taxes. Also, if the bottom 10% can't afford to eat, it doesn't make sense to waste time tracking them down and taking the food out of their mouths.
Other than that, sounds like you're on the right track.

webmost

If you give them more money they will squander that too.

raisindot

xmacro:

You might like this then, from 2009; a compilation, sourced from the IRS: http://www.ntu.org/tax-basics/who-pays-income-taxes.html

Cliff notes:
- Top 10% of taxpyers pay 70% of all taxes
- Top 25% of taxpayers pay 87% of all taxes
- Top 50% of taxpayers pay 98% of all taxes
- Bottom 50% of taxpayers pay 2% of all taxes

The problem isn't that we're not taxing the rich enough; the problem is that there's nowhere near enough money at the top to pay for everything. If you look at the actual numbers, you realize that the middle class, those at and below $100,000, is where the real money is, and where taxes need to go if you want to close the deficit via revenues.

Actually, the problem is that all of the tax cuts during the Bush and Obama administrations on both rich and middle class taxpayers removed hundreds of billions of dollars of revenue from the equation. Given that higher tax rates on the rich in the 90s resulted in a surplus, and that the poor don't contribute significantly to tax revenues in any case, it stands to reason that higher tax rates on the wealthy--coupled with meaningful cuts in federal spending--can close the gaps. Of course, all of this also depends on getting more people off the unemployment rolls and into jobs where they can pay taxes again. But that's a whole different issue.
That said, I don't believe that the working poor-should be totally exempt from paying taxes of any kind. My teenage son, for example, works part-time in food service as he save for college. He wouldn't be making enough money to be taxed at all using the standard tax rates, but I've changed his deductions to have fed and state income taxes deducted with every check just so he begins to get used to the idea. He will get all of this back in a refund, but I honestly think that he shouldn't get it all back--maybe 5%-8% of it should be kept by the government to help him benefit from the student loans he will need to take out, and the probable unemployment he will be receiving several times during his career, given today's job market. I'm also in favor of the recent termination of Obama's 2% payroll tax cut. It was meant to be a temporary measure to stimulate the economy, and, like all such tax cuts, had no stimulus effect whatsoever.

Vulchor

webmost:

If you give them more money they will squander that too.

Let them eat cake, eh?

fla-gypsy

It will not make any difference how much is collected in taxes, it will never be enough for the clowns in power spending it. You could confiscate all the income of the rich and there would not be enough to satisfy what the Govt is spending. I always love those calling for higher taxes until it hits them and their pocket. I gave the Govt quite enough last year and they still demand more. Taking my money at the threat of force (prosecution) for not ponying up is called extortion when done by any other entity. What a farce! Time to start completely over with how this Govt is funded and what they can spend money on. Abandonment of the income tax and implementation of a national sales tax to fund this bloated pig is an idea whose time has come. We were created by revolutionaries and that sentiment is swirling beneath the surface. Don't kid yourself into thinking we can tax our way out of this crap hole.

xmacro

raisindot:

Actually, the problem is that all of the tax cuts during the Bush and Obama administrations on both rich and middle class taxpayers removed hundreds of billions of dollars of revenue from the equation. Given that higher tax rates on the rich in the 90s resulted in a surplus, and that the poor don't contribute significantly to tax revenues in any case, it stands to reason that higher tax rates on the wealthy--coupled with meaningful cuts in federal spending--can close the gaps. Of course, all of this also depends on getting more people off the unemployment rolls and into jobs where they can pay taxes again. But that's a whole different issue.

The biggest problem with this idea, is that there simply isn't enough money at the top to pay for the current budget, let alone in the future. The total gross profit made by the top tier earners (ie - money left over after paying payroll and all expenses), is only about $1 trillion per year. If taxes on the top earners was raised to even 100% and the Gov't was actually able to collect, it still wouldn't even pay for 1 years worth of spending.

That said, I don't believe that the working poor-should be totally exempt from paying taxes of any kind. My teenage son, for example, works part-time in food service as he save for college. He wouldn't be making enough money to be taxed at all using the standard tax rates, but I've changed his deductions to have fed and state income taxes deducted with every check just so he begins to get used to the idea. He will get all of this back in a refund, but I honestly think that he shouldn't get it all back--maybe 5%-8% of it should be kept by the government to help him benefit from the student loans he will need to take out, and the probable unemployment he will be receiving several times during his career, given today's job market. I'm also in favor of the recent termination of Obama's 2% payroll tax cut. It was meant to be a temporary measure to stimulate the economy, and, like all such tax cuts, had no stimulus effect whatsoever.

Agree with you here. Like I said above, there isn't enough money at the top to pay for everything, and there's a serious problem when half the country has little skin in the tax game (2%, as of 2009) - it's too easy to say you want more Gov't spending when you don't pay taxes into the system. If the base of taxpayers was broadened, so that everyone paid taxes, even if it was just a little bit, 5-10%, the Gov't would raise enormous amounts of money immediately, because most of this country makes below $100,000 (IIRC, the average salary is around $40 or $50,000).

The math is pretty straightforward: the real money's with the middle class. If revenue is to be the only source of paying for the deficits, it's unavoidable that DC would have to go after them, because there isn't enough money at the top.

I agree with the payroll tax holiday too; it was always supposed to be temporary, a holiday that had to end, though I'd much prefer to have seen it traded away in exchange for a better tax system than simply dropped, but such is the logic of DC

xmacro

Amos Umwhat:

My question to this is: Who owns the money? I don't know the %'s, but, let's say the top 10% own 90% of the money, then they should pay 90% of the taxes. Also, if the bottom 10% can't afford to eat, it doesn't make sense to waste time tracking them down and taking the food out of their mouths.
Other than that, sounds like you're on the right track.

The person who earned the money is the one who owns it.

Also, the money owned by the rich has already had taxes paid on it - at the highest income tax bracket to boot. So to say that the top 10% owns 90% of the wealth misses the point that what they own has already been taxed, at least once, most likely twice (once by the company at the corporate tax level when it's earned, again at the personal income tax level when it's payed out as salary)

Second, there's the opportunity cost - when a business earns money, they can do one of two things with it - either pay it out as salary/dividends, or plow it back into the company to help it grow, via buying machinery, or hiring more people. It doesn't just sit in a bank - any money that isn't growing or working for you is being wasted; the power of compound interest demands that any spare money be put to work to earn more money. When a company pays money out in X amount of taxes, that's X amount of dollars that can't be reinvested in the company or paid out as salary; it goes to the Gov't for whatever they spend it on

Finally, if you say that the top 10% own 90% of the money, I'd agree with a caveat - the amount of money in the system isn't static, it's dynamic - it's being increased every day, every week, every month and every year. The money that's printed doesn't simply go into someone's bank account, it moves throughout the entire economy.

Also, if the bottom 10% can't afford to eat, it doesn't make sense to waste time tracking them down and taking the food out of their mouths.

If they're paid by a paycheck, it's taken out automatically; but most likely, the people you're referring to are paid either in cash or under the table, in which case it's almost impossible to track them.

webmost

Let's exclude Medicare and all that, which is relatively new, and focus just on Old Age Survivors and Disability Income (OASDI), which was originally what Social Security was all about.

In 1950, my Dad was paying 1.5% and the employer another 1.5%, for a total of three percent, paid on the first $3,000 he earned, to fund OASDI, and it was in good shape.

By 1960, just ten years down the road, I was paying 3% all by myself, and my employer was paying another 3%, for a total of 6%, but we were paying on the first $4,800 I earned.

By 1970, the total was 8.4% on the first $7,800

Ten years down the road again, by 1980, we paid 10.16% on the first $25,900

Ten years, 1990, 12.4% on $51,300

2000, 12.4% on $76,200

2010, 12.4% on the first $106,800. Yet they're broke.

So...

There it is. The history of this thing is plain. Anyone who proposes that raising either the tax rate or the taxable wage base is the answer must still have faith in the tooth fairy, Notre Dame, and change you can believe in.

The more you give these retards the more they squander.

http://www.taxpolicycenter.org/taxfacts/content/pdf/ssrate_historical.pdf

xmacro

^ Excellent points. Only thing I'd add is Social Security's origins - created in 1934/35, it was a joke - a gimmick to get re-elected that was never supposed to actually pay out.

When it was created, there were 16 people paying into it for every 1 person taking out; the average life expectancy was 61. The Gov't expected the average person to die 4 years before they ever collected a single check, and anyone who lived long enough to take out wasn't expected to live very long afterwards anyway - one of the main reasons a SS "lock box" was never created and SS taxes just went into the general slush fund for Congressional spending. No need to save money that was in all likelihood never going to be spent

Fast forward to the current day - there are 2 people paying into SS for every 1 person taking out, and the average life expectancy is around 79. If Social Security was created today based on the age standards they used in 1935, that is, a few years beyond the average life expectancy, we tack on four years (avg life expectancy in 1934 = 61 + 4 yrs = 65), then you get 83 - an age which the average person won't see, and if they do, likely won't live very long afterwards - in which case SS would be financially solvent

Anyway, I've been here long enough and said my piece. Anyone reading can make of things what they will. Later.

Amos_Umwhat

webmost:

The more you give these retards the more they squander.

That sums it up as neatly as I've ever seen.

Vulchor

Simply put, as long as power and money as so incredibly intertwined there is little hope for 99% of society, aside from the status quo. That goes for righties and lefties. Change means losing influence, losing influence means losing donations, losing donations means losing elections, losing elections means losing power. In turn------keep it the way it is and we'll be too stupid to know the difference....and so far, theyve generally been correct.

Adrian_F

Not for nothing, but I'm really thrilled with the quality of responses in this thread. As a liberal-leaning cigar smoker, I've quite frankly worried that political discussions on a cigar forum would be filled with commentary about "libtards" and Obama not being a real American and other jingoistic crap that would wind up making any smoker who leaned left unwelcome. But the sense I come away with, at least so far, is that the people posting on Cigar.com tend to be across the spectrum, and more interested in debating issues on their merits rather than with the dogma of any particular party, and that pleases me quite a bit.

Vulchor

Adrian_F:

Not for nothing, but I'm really thrilled with the quality of responses in this thread. As a liberal-leaning cigar smoker, I've quite frankly worried that political discussions on a cigar forum would be filled with commentary about "libtards" and Obama not being a real American and other jingoistic crap that would wind up making any smoker who leaned left unwelcome. But the sense I come away with, at least so far, is that the people posting on Cigar.com tend to be across the spectrum, and more interested in debating issues on their merits rather than with the dogma of any particular party, and that pleases me quite a bit.

As one of the 2 or 3 here who "lead the liberal charge" (even though Im a registered repub) stick around awhile, lol. Im kidding, it can get heated at times and nasty at times, but we all tend to make up. I even made up with Macro once, and he tried to waterboard me on 3 different occasions.

beatnic

Vulchor:

Adrian_F:

Not for nothing, but I'm really thrilled with the quality of responses in this thread. As a liberal-leaning cigar smoker, I've quite frankly worried that political discussions on a cigar forum would be filled with commentary about "libtards" and Obama not being a real American and other jingoistic crap that would wind up making any smoker who leaned left unwelcome. But the sense I come away with, at least so far, is that the people posting on Cigar.com tend to be across the spectrum, and more interested in debating issues on their merits rather than with the dogma of any particular party, and that pleases me quite a bit.

As one of the 2 or 3 here who "lead the liberal charge" (even though Im a registered repub) stick around awhile, lol. Im kidding, it can get heated at times and nasty at times, but we all tend to make up. I even made up with Macro once, and he tried to waterboard me on 3 different occasions.

Libtards. I love it!. Can't wait to use it. LMAO. Welcome Adrian. Give us your best and we will return friendly fire of our own. It can get heated. I've been threatened with some fancy words. You just got to let it slide.

So, I take it you like the stealth tax plan. LOL

raisindot

beatnic:

Libtards. I love it!. Can't wait to use it. LMAO.

I like it, too, and I'm one of 'em. What's the other side equivalent? Repubescents? Conservatits? Right wankers?

beatnic

raisindot:

beatnic:

Libtards. I love it!. Can't wait to use it. LMAO.

I like it, too, and I'm one of 'em. What's the other side equivalent? Repubescents? Conservatits? Right wankers?

I laughed ar Right wankers. You have my permission to use it. LOL.

Vulchor

I too like right wankers, lol.

Dark_Roast

webmost:

Let's exclude Medicare and all that, which is relatively new, and focus just on Old Age Survivors and Disability Income (OASDI), which was originally what Social Security was all about.

In 1950, my Dad was paying 1.5% and the employer another 1.5%, for a total of three percent, paid on the first $3,000 he earned, to fund OASDI, and it was in good shape.

By 1960, just ten years down the road, I was paying 3% all by myself, and my employer was paying another 3%, for a total of 6%, but we were paying on the first $4,800 I earned.

By 1970, the total was 8.4% on the first $7,800

Ten years down the road again, by 1980, we paid 10.16% on the first $25,900

Ten years, 1990, 12.4% on $51,300

2000, 12.4% on $76,200

2010, 12.4% on the first $106,800. Yet they're broke.

So...

There it is. The history of this thing is plain. Anyone who proposes that raising either the tax rate or the taxable wage base is the answer must still have faith in the tooth fairy, Notre Dame, and change you can believe in.

The more you give these retards the more they squander.

http://www.taxpolicycenter.org/taxfacts/content/pdf/ssrate_historical.pdf Gasoline was $.19 a gallon too. This Country has gone to pot. Not that pot. That was back in the 70's. Boy was that good pot! Not the chemically enhanced crap they sell now at a much overly inflated stepped on price. Yea I used to get two ounces of Mexican for $25.00 back in the 70's. You know what you have to pay for two ounces now? Hell I don't know, it's been 40 years since I purchased. But I bet its more than $25.00.

beatnic

Dark Roast:

webmost:

Let's exclude Medicare and all that, which is relatively new, and focus just on Old Age Survivors and Disability Income (OASDI), which was originally what Social Security was all about.

In 1950, my Dad was paying 1.5% and the employer another 1.5%, for a total of three percent, paid on the first $3,000 he earned, to fund OASDI, and it was in good shape.

By 1960, just ten years down the road, I was paying 3% all by myself, and my employer was paying another 3%, for a total of 6%, but we were paying on the first $4,800 I earned.

By 1970, the total was 8.4% on the first $7,800

Ten years down the road again, by 1980, we paid 10.16% on the first $25,900

Ten years, 1990, 12.4% on $51,300

2000, 12.4% on $76,200

2010, 12.4% on the first $106,800. Yet they're broke.

So...

There it is. The history of this thing is plain. Anyone who proposes that raising either the tax rate or the taxable wage base is the answer must still have faith in the tooth fairy, Notre Dame, and change you can believe in.

The more you give these retards the more they squander.

http://www.taxpolicycenter.org/taxfacts/content/pdf/ssrate_historical.pdf Gasoline was $.19 a gallon too. This Country has gone to pot. Not that pot. That was back in the 70's. Boy was that good pot! Not the chemically enhanced crap they sell now at a much overly inflated stepped on price. Yea I used to get two ounces of Mexican for $25.00 back in the 70's. You know what you have to pay for two ounces now? Hell I don't know, it's been 40 years since I purchased. But I bet its more than $25.00.

And your point?

fla-gypsy

Meanwhile; back at the Big (white) house Obama floats the idea of gun control by grand fiat through the village idiot. I would recommend they just go ahead, it will be fun. 3rd time around may just be the trick.

raisindot

Even though it's British, it summarizes some of this stuff in a nutshell.

pelirrojo

Roughly $40 an 1/8 oz for medical here in the west webmost.... that'd be 640 for 2 oz. Don't you just love inflation? I bet you could get a QP for $1000. Ahhh hell I'm glad I live 30 miles from Colorado. I'll be able to get it in a vending machine in a few years. Threadjack over.

Vulchor

pelirrojo:

Roughly $40 an 1/8 oz for medical here in the west webmost.... that'd be 640 for 2 oz. Don't you just love inflation? I bet you could get a QP for $1000. Ahhh hell I'm glad I live 30 miles from Colorado. I'll be able to get it in a vending machine in a few years. Threadjack over.

U all have my addy right?

pelirrojo

Also, on topic, I recieved my first paycheck of the year today. I had recieved a 3% pay increase last August. This was in addition to a 2% increase 2 Augusts before. My take home pay is now roughly equal to what it was when I started this job almost 3 and a half years ago. However, my bills and the price of goods here have gone up. I am living the American dream.