Glancing back through some older posts yesterday, I discovered that I never took the time (last year) to talk about my household’s effective tax rate for 2011. My write-up for our 2010 effective tax rate was the last time I covered this red-hot, bawdry topic.
Can’t let that stand, now can we?
Calculating Our Effective Tax Rate
I won’t spend a lot of time delineating all the numbers which go into our “effective tax rate,” since I covered it pretty in-depth in my 2010 article above. Basically, the formula looks like this:
On the tax side, all federal taxes are added in there, as well as state taxes, property taxes, utility taxes, and — as best I can estimate from Quicken reports — sales taxes. Same goes for income; it’s all in there.
Excel Does the Math
So where’d we end up in 2011? Well, as it turns out, our ETR went back to where it was in 2008:
And when I say it went “back,” what I really mean is that it went “back up.” Our ETR in 2010 was 21.9 percent, and the year before that, 21.5 percent. So this particular measure of financial progress is going the wrong way, to my thinking.
Though I’m sure there are many in D.C. (and other levels of government) who are all smiles right about now … now that almost one quarter of our earnings are going into the Tax Man’s pouch.