State tax burdens add a varying extra burden, leaving you with less after -tax dollars to invest.
Simply put: your investment return -at a minimum - must be greater than this Minimum rate before you can judge yourself to be better off.
This is Data from Tax Foundation - www.taxfoundation.org
To determine your personal MRRR:
|State and Local Sales Tax Rates|
|As of January 1, 2012|
|State||State Tax Rate||Rank||Avg. Local Tax Rate (a)||Combined Rate||Rank||State|
|Calif. (b)||7.25%||1||0.86%||8.11%||12||Calif. (b)|
|Hawaii (c)||4.00%||38||0.35%||4.35%||45||Hawaii (c)|
|Mont. (d)||None||46||None||0.00%||47||Mont. (d)|
|N.J. (e)||7.00%||2||-0.03%||6.97%||22||N.J. (e)|
|N.M. (c)||5.125%||30||2.12%||7.24%||16||N.M. (c)|
|Utah (b)||5.95%||27||0.73%||6.68%||28||Utah (b)|
|Va. (b)||5.00%||31||None||5.00%||43||Va. (b)|
|Note: Some states levy gross receipts taxes in addition to sales taxes. See Table 20 for information on gross receipts taxes.|
|(a) City, county and municipal rates vary. These rates are weighted by population to compute an average local tax rate.|
|(b) Three states collect a separate, uniform "local" add-on sales tax: California (1%), Utah (1.25%), Virginia (1%). We include these in their state sales tax.|
|(c) The sales taxes in Hawaii, New Mexico and South Dakota have broad bases that include many services, so their rates are not strictly comparable to other states.|
|(d) Due to data limitations, table does not include sales taxes in local resort areas in Montana.|
|(e) Some counties in New Jersey are not subject to the statewide sales tax rate and collect a local rate of 3.5%. Their average local score is represented as a negative.|
|Source: Tax Foundation; Sales Tax Clearinghouse|
MINIMUM % REQUIRED RATES OF RETURN To BREAK EVEN after inflation.
see below for definitions of CPI-U and SGS
Below are two sources of more realistic data than the Dept of Labor inflation measures. The first, the Billion Price project from MIT and the second from John Williams's Shadow Goverment Statistics site.
The CPI-U (consumer price index) is the broadest measure of consumer price inflation for goods and services published by the Bureau of Labor Statistics (BLS).
While the headline number usually is the seasonally-adjusted month-to-month change, the formal CPI is reported on a not-seasonally-adjusted basis, with annual inflation measured in terms of year-to-year percent change in the price index.
So why does that matter? According to John Williams definitions:
"THE SGS Alternative CPI-U measures are attempts at adjusting reported CPI-U inflation for the impact of methodological change of recent decades designed to move the concept of the CPI away from being a measure of the cost of living needed to maintain a constant standard of living.
For every one of us the lesson is that we must increase our income or the minimum rate of return on our invested dollars must be increasing at least at this minimum inflation rate to maintain the same standard of living we enjoy now.
That would be a reasonably attainable goal were it not for Government at all levels making it more difficult with a vast array of taxes, levies and fees of all sorts.
This minimum rate must be adjusted for the effect of Government dipping into your wallet before you get to use what is left over. Please go to the MRRR tab to calculate your personal Minimum required rate of return to maintain your standard of living.
The Billion Price Project
The MIT's billion price project which, as the name implies, tracks the prices of a billion products in real time. And according to the latter, annual inflation has hit a multi year high of about 4%.
August, 18th, 2011
• Inflation Spreads Throughout Economy as Annual “Core” Inflation Jumps Again
• Consumer Inflation at 33-Month High
• July’s Annual Inflation: 3.6% (CPI-U), 4.1% (CPI-W), 11.2% (SGS)
Courtesy:John Williams, Shadow Government Statistics; www.shadowstats.com
The contained information is based on historical information. The analysis assumes the stock/fund will perform in the future as it has in the past. This is generally never true.
Before buying or selling a security, you should do your own research and reach your own conclusions. Reliance on this information is at the sole risk of the reader.
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