I know he can write off business expenses, but that doesn't change the fact that we pay a full 15.3% self employment tax on every dollar of income PLUS our income tax liability, while someone who lives off of investments and rental properties pays only income tax. Talk about a disincentive to work hard and start a business!
We do own a rental property, at least for a few more months, but it isn't a source of income. It was an ethical/acceptable way out of a difficult housing situation, and since the local market won't bear high enough rent for us to profit we just break even on it, but it was a better option than passing on the opportunity that came along with our current house, staying put not knowing how much longer we could make ends meet there, or simply walking away. It looks like we'll FINALLY be out from under that mess this spring (thanks in part to our tenant's EITC, actually - he has the pre-approval and is waiting on his tax return for the downpayment
).
Federally, it is $5.75; working full time at that rate is an income of less than $1000/mo. Some states have higher minimum wages, though.
But you can't use the extremes to prove the rule, and aside from (to some degree) Steve Jobs and Bill Gates, all of your examples are men who lived before credentials overtook know-how and determination in getting one's foot in the door. None of them built their fortunes at a time where a resume without the right degree on it went straight to the circular file without even being read, which is where we're at today.
My grandfather was one of those success stories, on a smaller scale (obviously, since he's not a household name
) - he dropped out of middle school and went to work in a factory, eventually working his way up to programming, maintaining, and ultimately selling robotics used in manufacturing. He and his partners started their own company worked all over the world and made excellent money. But for someone new to get into his line of work, an engineering degree is required just to get an interview.
I think the point was that us average-income schlubs were supposed to look at a 35K tax-due amount (with self-employment tax and no withholdings, substituting that figure for our actual income took us from a couple hundred dollar return to 35,700 owing) and be so
that we forget all about the 75K in extra income that's leftover after paying that bill.
It is in the 80+% of their income that they get to keep. We are far from punitive, discouraging income taxes in this country even at the top rate. This would be like a lower income family saying "Sure, I could save $10 with coupons from the paper, but that's not worth spending $2 to buy it" - it just doesn't make sense unless the person is looking for an excuse not to do it in the first place.
But I think the answer to your questions are...
