Comments on Who Doesn't Pay TaxesTypePad2009-10-01T13:50:23ZNAhttps://www.freemoneyfinance.com/tag:typepad.com,2003:https://www.freemoneyfinance.com/2009/10/who-doesnt-pay-taxes/comments/atom.xml/Joe commented on 'Who Doesn't Pay Taxes'tag:typepad.com,2003:6a00d83451bcbd69e20148c6f3bccc970c2010-12-22T01:29:57Z2010-12-22T01:29:57ZJoeI took early IRA withdrawals but thought i was safe since I had 25% withheld. The amount I withdrew I...<p>I took early IRA withdrawals but thought i was safe since I had 25% withheld. The amount I withdrew I looked up the tax and applied the 10% penalty tax. What was withheld was enough to cover the taxes and the penalty. My regular wages I also had enough taken out so I wouldn't have to anything.<br />
To my surprise though when you combined the two amounts it puts you in a higher tax bracket so the IRS made a additional $2000 of of me.<br />
This is unfair and it should be illegal.</p>nick commented on 'Who Doesn't Pay Taxes'tag:typepad.com,2003:6a00d83451bcbd69e2012876a1fe09970c2010-01-03T22:56:59Z2010-01-03T22:56:59Znicksheri was RIGHT - the numbers are LIES I will have agi of $42,500 and will PAY federal income tax...<p>sheri was RIGHT - the numbers are LIES</p>
<p>I will have agi of $42,500<br />
and will PAY federal income tax of $2672</p>
<p>and have no health care</p>Holly commented on 'Who Doesn't Pay Taxes'tag:typepad.com,2003:6a00d83451bcbd69e20120a6a842dd970c2009-11-04T15:31:36Z2009-11-04T15:31:36ZHollyEasy for anyone to 'avoid' paying income tax. You just need to know the tax code: Deduct all interest payments...<p>Easy for anyone to 'avoid' paying income tax. You just need to know the tax code:<br />
Deduct all interest payments on mortgage<br />
Deduct percentage of ALL work-related expenses (uniforms, cleaning uniforms, tools, cell phone if necessary for work, etc.)<br />
Deduct percentage of all child care expenses (if child is not yet in Kindergarten)<br />
Deduct elder-care expenses<br />
Deduct charitable donations (Goodwill, church tithes, Boy Scouts, etc.)<br />
Deduct gas purchased to make donations (based on mileage count)<br />
Teacher working full or near full-time? Deduct expenses up to a certain amount<br />
Higher Education expenses? Deduct those (Lifetime Learning Credit and/or Hope?, interest on student loans)<br />
Don't forget HUGE child tax credit per each child (phases out if you make too much)<br />
Unemployed? Deduct all costs related to job hunting<br />
Don't forget all of those pre-tax goodies offered thru employer... Health Flex Spending Accounts (This is a BIG one that noone uses...it can probably help w/Junior's braces), Tax-Deferred Retirement Accounts: 401K, IRA's, and Pension contributions, if applicable, etc., etc.)<br />
Don't forget install of energy efficient appliances (state refunds) and energy efficient windowns, insulation, doors, etc.<br />
Don't forget hybrid cars eligilble for credits<br />
THERE ARE MANY MORE...just can't think of them all off the top of my head...</p>
<p>People are lazy at tax time ...<br />
Anyone out there agree w/me?</p>Don@moneyreasons.com commented on 'Who Doesn't Pay Taxes'tag:typepad.com,2003:6a00d83451bcbd69e20120a6911d66970c2009-10-30T03:51:14Z2009-10-30T03:51:14ZDon@moneyreasons.comhttp://www.moneyreasons.comI think it's sad when taxes no longer are used to benefit society as a whole, but instead just benefit...<p>I think it's sad when taxes no longer are used to benefit society as a whole, but instead just benefit certain groups. To me this is the sign of corruption and should be stopped.</p>
<p>Anymore, it seems like the politicians no longer see down the road, they just reach for the closest carrot. Where is the logic in some of the things they are doing?<br />
</p>Mrs. Accountability commented on 'Who Doesn't Pay Taxes'tag:typepad.com,2003:6a00d83451bcbd69e20120a679d960970c2009-10-27T01:43:31Z2009-10-27T01:43:31ZMrs. Accountabilityhttp://www.outofdebtagain.comI just found out over the weekend that some friends of ours are not claiming side work the husband is...<p>I just found out over the weekend that some friends of ours are not claiming side work the husband is doing because they think it's a "hobby". It really frustrated me because I thought they were honest folks. I'm sure it wouldn't be THAT much money in income taxes that they would have to pay, maybe a couple hundred dollars, but it all adds up! The wife told me that we have to claim our income because my husband is trying to make a "real" business out of his work, but this was only a "hobby" for her husband. I did try to explain to them that if you work for any extra income, you are supposed to report it and pay taxes. Especially if it's a hobby, because them you can legally claim all your income, even though the hobby is a loss. It won't decrease your tax liability, but the earned income won't cause additional tax liability either.</p>Mike Hunt commented on 'Who Doesn't Pay Taxes'tag:typepad.com,2003:6a00d83451bcbd69e20120a66f10a2970c2009-10-23T15:48:15Z2009-10-23T15:48:15ZMike Hunthttp://www.test.netWhat do the following countries have in common: Libya, North Korea & the USA? Answer: They are the only countries...<p>What do the following countries have in common: Libya, North Korea & the USA?</p>
<p>Answer: They are the only countries that require expatriates working abroad to file and pay taxes to the home country.</p>
<p>Nice company the USA is keeping, wouldn't you think?</p>
<p>Not that this ever gets any interest in our media or anything...</p>
<p>-Mike</p>Mike Hunt commented on 'Who Doesn't Pay Taxes'tag:typepad.com,2003:6a00d83451bcbd69e20120a66e11d2970c2009-10-23T07:30:10Z2009-10-23T07:30:10ZMike Hunthttp://www.test.netI've got another one for you... What does Libya, North Korea and the USA have in common? Answer: These are...<p>I've got another one for you...</p>
<p>What does Libya, North Korea and the USA have in common?</p>
<p>Answer: These are the only 3 countries in the world that require expatriates working abroad to file and pay taxes to the home country. </p>
<p>Pretty great company the US keeps, huh?</p>
<p>How come there is absolutely no reporting on this? I guess because most people couldn't give a rip...</p>
<p>-Mike</p>NoTax commented on 'Who Doesn't Pay Taxes'tag:typepad.com,2003:6a00d83451bcbd69e20120a66e0b47970c2009-10-23T07:08:22Z2009-10-23T07:08:22ZNoTaxI am one of the 40 or 47 million paying no tax. I always have been. For those paying taxes...<p>I am one of the 40 or 47 million paying no tax. I always have been. For those paying taxes you need better accountants. I'd bet Bill Gates is in this group as well. There are plenty of things one can do to reduce tax liability. Think of the Tax Code as the rules to a game. The better you understand the rules, the better you can play, and the easier you can win.</p>LotharBot commented on 'Who Doesn't Pay Taxes'tag:typepad.com,2003:6a00d83451bcbd69e20120a667ddee970c2009-10-21T23:18:04Z2009-10-21T23:18:04ZLotharBotBobDoleSaysHi, you're flat-out wrong. You read the headline, not the actual findings. Roughly 47% of households do not have any...<p>BobDoleSaysHi, you're flat-out wrong. You read the headline, not the actual findings.</p>
<p>Roughly 47% of households do not have any Federal Income Tax burden. This isn't "the leftover at the end of the year", it's the overall obligation -- 47% of households will get back all income tax they paid during the year. (They still pay social security and medicare tax.) Let me say it again: 47% of families, on April 15, will get back every penny they paid as income tax, because the government will determine they shouldn't have paid anything at all.</p>
<p>Not all of those 47% will be "poor". Some will be retired folks who only draw income from tax-sheltered accounts, others will simply have a boatload of deductions, and others will actually just not have much income.</p>
<p>Now, it's not fair to say that those 47% won't pay any taxes. They do pay sales tax, for example. They just don't pay any income tax (and if they did, they get it all back.)</p>
<p>What's remarkable to me is how convoluted the entire system is. Money is taxed at all sorts of different rates, or not at all, depending on its source. Sometimes it's taxed twice or more (for example, you might pay tax on income, then tax on any capital gains from that income, then death tax when your kids inherit it.) Sometimes it's taxed extra, or not as much, due to marital status or place of residence. Sometimes the government gives out welfare checks in the form of "refundable tax credits". The rich end up paying the vast majority of taxes, but also have the most ability to. For the middle class and the poor, some pay their fair share of taxes, some more, and some way less, and it's not even remotely predictable unless you know the ins and outs of the tax code and all the weird exemptions in place.</p>Jim commented on 'Who Doesn't Pay Taxes'tag:typepad.com,2003:6a00d83451bcbd69e20120a60e942a970b2009-10-21T19:49:15Z2009-10-21T19:49:15ZJimhttp://www.freeby50.com"You have a good point but should they also be able to complain about other people not paying enough taxes?"...<p>"You have a good point but should they also be able to complain about other people not paying enough taxes?"</p>
<p>We don't know that they are complaining. Among the 300M people in this country I think we can safely conclude many of them have irrational opinions. Theres probably many people who look at someone else with a low tax burden and think its unfair yet themselves do everything they possibly can to avoid taxes themselves. Probably some of those folks here.</p>JoshuaMichael.net commented on 'Who Doesn't Pay Taxes'tag:typepad.com,2003:6a00d83451bcbd69e20120a6655556970c2009-10-21T19:28:25Z2009-10-21T19:28:25ZJoshuaMichael.netYou can b!tch about the system and how screwed up it is .... Or you can learn to negotiate it...<p>You can b!tch about the system and how screwed up it is .... Or you can learn to negotiate it to your own benefit.</p>
<p>You decide. </p>Jessica commented on 'Who Doesn't Pay Taxes'tag:typepad.com,2003:6a00d83451bcbd69e20120a60e0040970b2009-10-21T19:16:25Z2009-10-21T19:16:25ZJessicaTG - So what if the married couple had to work two jobs? The IRS doesn't care about the quantity...<p>TG -<br />
So what if the married couple had to work two jobs? The IRS doesn't care about the quantity of jobs, just the bottom line. Even if the comparison was for one person, single vs a married person with the same salary, the unmarried person loses.</p>
<p>Married people get over 1000 governmental perks, including reduced taxes. </p>
<p>The amount of tax money your are complaining about for married combined as opposed to unmarried single is insignificant compared to all the other benefits you get for having a magical ring. You pay FAR less in auto insurance, even if you get tickets. </p>
<p>I suggest you run numbers. How much would it cost your to live by yourself (with the same standard of living you have now), pay auto insurance, etc? Compare that to your dual income expenses, and you'll find the power of the wedding ring.</p>BobDoleSaysHi commented on 'Who Doesn't Pay Taxes'tag:typepad.com,2003:6a00d83451bcbd69e20120a66415df970c2009-10-21T18:32:18Z2009-10-21T18:32:18ZBobDoleSaysHiThe majority of the commentator and the author seemed to have failed reading comprehension. Everyone who made money has paid...<p>The majority of the commentator and the author seemed to have failed reading comprehension. Everyone who made money has paid federal taxes (except the exception.) Those who paid their taxes on each paycheck have either paid what is required of them exactly or paid more. Those who paid exact tax don’t have to pay any more at the end of the year. They will not receive any refund either. Those that paid more than they were required to pay will get a refund. <br />
I know because I paid more by not talking advantages of the allowances. Personally, I’d rather pay more and get a refund than pay less and be slapped with a “big ticket” expense at the end of the year. Since I cannot earn interests (due to religious reasons,) I might as well let government use my money. I’m doing something good by helping the government by essentially letting them borrow money from me free of charge or fee. <br />
</p>Terry commented on 'Who Doesn't Pay Taxes'tag:typepad.com,2003:6a00d83451bcbd69e20120a60d891c970b2009-10-21T18:23:35Z2009-10-21T18:23:35ZTerryOld Limey - So you have a seven figure income and pay, what, less than one percent in tax? Is...<p>Old Limey -</p>
<p>So you have a seven figure income and pay, what, less than one percent in tax? Is this a great country or what?</p>Terry commented on 'Who Doesn't Pay Taxes'tag:typepad.com,2003:6a00d83451bcbd69e20120a60d85fe970b2009-10-21T18:20:21Z2009-10-21T18:20:21ZTerryp.s. I agree with FMF - a 'tax liability' is the 'TAX' line on an income tax return. THe amount...<p>p.s. I agree with FMF - a 'tax liability' is the 'TAX' line on an income tax return. THe amount you owe is your tax liability minus your payments (e.g. withholding) and tax credits.</p>Dotty dot dot commented on 'Who Doesn't Pay Taxes'tag:typepad.com,2003:6a00d83451bcbd69e20120a66409ae970c2009-10-21T18:17:21Z2009-10-21T18:17:21ZDotty dot dotI found this post and subsequent comments confusing. Coming from the Canadian perspective, I'm fairly certain that any person that...<p>I found this post and subsequent comments confusing. Coming from the Canadian perspective, I'm fairly certain that any person that is a resident in Canada is liable to pay Canadian income tax, regardless of income.<br />
</p>Terry commented on 'Who Doesn't Pay Taxes'tag:typepad.com,2003:6a00d83451bcbd69e20120a60d810d970b2009-10-21T18:14:20Z2009-10-21T18:14:20ZTerryryan - Is this a great country or what? Your tenants' income is redistributed upward to you, AND they pay...<p>ryan -</p>
<p>Is this a great country or what? Your tenants' income is redistributed upward to you, AND they pay more tax than you. I aspire to get in on that.</p>Terry commented on 'Who Doesn't Pay Taxes'tag:typepad.com,2003:6a00d83451bcbd69e20120a6640591970c2009-10-21T18:12:02Z2009-10-21T18:12:02ZTerryCindy - As someone who has worked productively at the bottom of the economy, I reject claims that I don't...<p>Cindy -</p>
<p>As someone who has worked productively at the bottom of the economy, I reject claims that I don't contribute "enough" in taxes.</p>
<p>My workplace has two dozen employees, all earning within a few cents of minimum wage - yet the business enjoys a net annual profit in the neighborhood of $3 million.</p>
<p>So I think the productivity of the employees is not in doubt; our wage is not commensurate with our productivity, and our being underpaid actually results in MORE taxes being paid than if we had been paid wages consonant with our productivity:</p>
<p>Our wages are taxes at the 10 percent marginal tax rate, while the profit is taxed at our employer's top tax rate.</p>
<p>So I believe the employees contribute far far more in taxes than you credit us with.</p>Apex commented on 'Who Doesn't Pay Taxes'tag:typepad.com,2003:6a00d83451bcbd69e20120a663ffa5970c2009-10-21T18:02:49Z2009-10-21T18:02:49ZApexLots of comments here about how taxes need to be lower overall. Two thoughts. 1. The federal tax take as...<p>Lots of comments here about how taxes need to be lower overall.</p>
<p>Two thoughts.</p>
<p>1. The federal tax take as a percent of GDP is lower now than it has been at any time since WWII. </p>
<p>2. Due to current budgetary structural issues with debt, financial meltdown, and coming entitlement issues, everyone should look at their current tax bill and rate with a longing sense of nastalgia. It's about to go higher never to return to these levels again for anyone who is currently alive.</p>TG commented on 'Who Doesn't Pay Taxes'tag:typepad.com,2003:6a00d83451bcbd69e20120a663f97b970c2009-10-21T17:56:02Z2009-10-21T17:56:02ZTGHi Jessica, You wrote: If your combined income is $250k, your married tax liability is $60,321 (jointly). If my single...<p>Hi Jessica,</p>
<p>You wrote:<br />
If your combined income is $250k, your married tax liability is $60,321 (jointly). If my single income is $250k, my tax liability is $67,643. The single person pays more.</p>
<p>I totally agree, but the couple earning $250K had to work two jobs (80+ hours) a week for the $250K vs. the single person working one job (40+ hours) per week. I am really just trying to make an apples to apples comparison between the taxes two single people who both work and earn $125K would pay vs. the tax the same two people would pay if they got married. </p>StL Pastor commented on 'Who Doesn't Pay Taxes'tag:typepad.com,2003:6a00d83451bcbd69e20120a663cf6b970c2009-10-21T17:13:40Z2009-10-21T17:13:40ZStL PastorJust to add something to this conversation, there is a pretty good amount of evidence that everyone pays about the...<p>Just to add something to this conversation, <br />
there is a pretty good amount of evidence that everyone pays about the same tax rate, when you incorporate state and local taxes as well-about 40% of income. (see this MSN article)<br />
<a href="http://articles.moneycentral.msn.com/Taxes/Advice/YourRealTaxRate40.aspx" rel="nofollow">http://articles.moneycentral.msn.com/Taxes/Advice/YourRealTaxRate40.aspx</a></p>
<p>It is the progressive income tax that allows the wealthy to at least pay an equal percentage of the tax burden, and the wealthiest of the wealthy, who live on capital gains are only paying 15%, which is ridiculously low, in comparison to the rest of us. After social security and local taxes, the lower middle class has already paid a significant portion of their income in taxes. </p>
<p>Just my 2 cents.</p>ryan commented on 'Who Doesn't Pay Taxes'tag:typepad.com,2003:6a00d83451bcbd69e20120a663c631970c2009-10-21T17:00:46Z2009-10-21T17:00:46ZryanI am 28, and have had no tax liability since 2006, and counting. I will gross about 50K this year...<p>I am 28, and have had no tax liability since 2006, and counting. I will gross about 50K this year from my paycheck.</p>
<p>I have rental properties, and the associated deductions ensure that my adjusted gross is out of taxable territory.</p>
<p>I consistently reinvest at least half of my take home pay into the community and the economy, doing far more benefit than paying the gov't to waste it on some paperwork.</p>
<p>I will continue to do this until I die or they change the laws.</p>Greg commented on 'Who Doesn't Pay Taxes'tag:typepad.com,2003:6a00d83451bcbd69e20120a663bf65970c2009-10-21T16:52:07Z2009-10-21T16:52:07ZGregJim, You have a good point but should they also be able to complain about other people not paying enough...<p>Jim,</p>
<p>You have a good point but should they also be able to complain about other people not paying enough taxes?</p>Jim commented on 'Who Doesn't Pay Taxes'tag:typepad.com,2003:6a00d83451bcbd69e20120a663b610970c2009-10-21T16:40:01Z2009-10-21T16:40:01ZJimhttp://www.freeby50.comSaying that 47% don't pay income tax doesn't really mean much. Why don't those people pay taxes? Here's who doesn't...<p>Saying that 47% don't pay income tax doesn't really mean much. Why don't those people pay taxes? </p>
<p>Here's who doesn't pay taxes:</p>
<p>Retired people on social security.<br />
People making less than $10k a year.<br />
People with income from untaxed municipal bonds only.<br />
People with low to moderate income and higher tax deductions / credits.<br />
Self employed people who's businesses lost money.</p>
<p><br />
Is there something above that should be changed? Should retired people on social security be taxed on their SS? Should we tax business owners who lost money?</p>Strick commented on 'Who Doesn't Pay Taxes'tag:typepad.com,2003:6a00d83451bcbd69e20120a663a40d970c2009-10-21T16:18:02Z2009-10-21T16:18:02ZStrickGuess Texashaze Vs. Emily last comments sum it all up. Either you're entitled to what you have or entitled to...<p>Guess Texashaze Vs. Emily last comments sum it all up. Either you're entitled to what you have or entitled to what others have.</p>Jessica commented on 'Who Doesn't Pay Taxes'tag:typepad.com,2003:6a00d83451bcbd69e20120a6639f27970c2009-10-21T16:11:27Z2009-10-21T16:11:27ZJessicaTG- If your combined income is $250k, your married tax liability is $60,321 (jointly). If my single income is $250k,...<p>TG-<br />
If your combined income is $250k, your married tax liability is $60,321 (jointly). If my single income is $250k, my tax liability is $67,643. The single person pays more. You also get double the 401k benefits, both for before-tax contributions and company match.</p>
<p>If you divorced so you could pay the single tax rate, but there are some of the benefits you lose:<br />
* Access to spouse's pension<br />
* Access to spouse's social security<br />
* Access to spouse's employer-sponsored health plan<br />
* Auto Insurance and other marital discounts</p>
<p>I guess most companies don't make the employee pay the full price for the non-employee's dependents (spouse, children). You get that at a discount. Yes, you do pay more than the single rate, but the company pays the remainder. If you opt-out of my company's insurance plan, they give you the money that they would have spent subsidizing your health insurance.</p>texashaze commented on 'Who Doesn't Pay Taxes'tag:typepad.com,2003:6a00d83451bcbd69e20120a60d1d6f970b2009-10-21T16:06:03Z2009-10-21T16:06:03Ztexashaze2 things concern me about these numbers: -There is something wrong when you pay nothing to live here or get...<p>2 things concern me about these numbers:</p>
<p>-There is something wrong when you pay nothing to live here or get paid to live here. Everyone should pay something even if it's just 1 dollar. It's harder to appreciate something if there is no investment in it.</p>
<p>-There is something definately wrong when half of the country who doesn't pay determines what the other half will pay. This goes back to my first point, everyone should chip in something.</p>Emily commented on 'Who Doesn't Pay Taxes'tag:typepad.com,2003:6a00d83451bcbd69e20120a60d176b970b2009-10-21T15:58:15Z2009-10-21T15:58:15ZEmilyIsn't there a problem that the top 1 percent of america holds such a large portion of the wealth? That...<p>Isn't there a problem that the top 1 percent of america holds such a large portion of the wealth? That is more disturbing than the fact that they make up 30 percent of the tax revenue. </p>Emily commented on 'Who Doesn't Pay Taxes'tag:typepad.com,2003:6a00d83451bcbd69e20120a66392f6970c2009-10-21T15:55:35Z2009-10-21T15:55:35ZEmilySo, if you don't want to pay taxes than have kids and take a job that pays low? You don't...<p>So, if you don't want to pay taxes than have kids and take a job that pays low? You don't have to take a high paying job, you certainly can take a lower paying job so you will have less taxes. What are people complaining about?</p>Strick commented on 'Who Doesn't Pay Taxes'tag:typepad.com,2003:6a00d83451bcbd69e20120a66392a7970c2009-10-21T15:54:55Z2009-10-21T15:54:55ZStrickGreg - Why do you think that? 2007 - Top 1% Total AGI - $1.6 Trillion - Total Tax Payments...<p>Greg - Why do you think that?</p>
<p>2007 - Top 1% Total AGI - $1.6 Trillion - Total Tax Payments of Top 1% - $368 Billion</p>
<p> All taxpayers Total Tax payments - $934Billion</p>
<p></p>
<p></p>
<p> </p>Arshes commented on 'Who Doesn't Pay Taxes'tag:typepad.com,2003:6a00d83451bcbd69e20120a663914e970c2009-10-21T15:53:03Z2009-10-21T15:53:03ZArshesI found the article a bit confusing I think someone should contact CNN to get some clarification. I have worked...<p>I found the article a bit confusing I think someone should contact CNN to get some clarification. I have worked as a Tax accountant and from what I understood, Sherri is correct in her statement. Plus i dont understand how some who make $30,000 can pay no taxes? Are the employers not required by law to take source deductions?</p>MC commented on 'Who Doesn't Pay Taxes'tag:typepad.com,2003:6a00d83451bcbd69e20120a66390ab970c2009-10-21T15:51:57Z2009-10-21T15:51:57ZMCIt would be very interesting to see how many of those paying no taxes have 1) children, 2) homes that...<p>It would be very interesting to see how many of those paying no taxes have 1) children, 2) homes that they deduct mortgage interest on.</p>
<p>When years ago I made that little, I paid huge taxes. I didn't have children yet, nor could I afford to buy my own home. </p>
<p>How many people making $50K can afford to buy a house? Not too many, I'd guess.</p>Terry commented on 'Who Doesn't Pay Taxes'tag:typepad.com,2003:6a00d83451bcbd69e20120a6637ebe970c2009-10-21T15:26:02Z2009-10-21T15:26:02ZTerryJessica: DING DING DING WE HAVE A WINNER! You got it.. when this issue comes up, I like to ask,...<p>Jessica: DING DING DING WE HAVE A WINNER!</p>
<p>You got it.. when this issue comes up, I like to ask, " I earn minimum wage and I pay federal income tax...so when I see all these people paying NO federal income tax, I wanna know, what am I doing wrong to pay more tax than tens of millions who earn more than I?"</p>
<p>The answer, of course, is that they have kids (refundable child and/pr child care tax credits) and I don't.</p>
<p>Those NONtaxpaers earning $50K-$75K also enjoy large tax benefits for homeownership.</p>
<p>I've been saying for years that our so-called progressive tax system is really progressive only at very low (near or below poverty) and at fairly high (above approx $100K) incomes. In the broad middle, federal income taxes are effectively close to flat.</p>
<p>FWIW, I believe everyone should pay SOME federal income tax...BUT not necessarily in cash. If I could do some work on say an infrastructure project to satisfy a tax obligation, I'd sign up. That would be a better deal for taxpayers and the country than paying inflated 'prevailing wage' on billions and billions of dollars of projects.</p>TG commented on 'Who Doesn't Pay Taxes'tag:typepad.com,2003:6a00d83451bcbd69e20120a6637c4c970c2009-10-21T15:21:40Z2009-10-21T15:21:40ZTGHi Wanzman and Jessica - we have calculated our taxes both ways (Married and Married Filing Separately). With the "Married...<p>Hi Wanzman and Jessica - we have calculated our taxes both ways (Married and Married Filing Separately). With the "Married Filing Separately" option, your spouse's earning are still factored in, so it does not help us. Also, I understand about the whole "marginal" tax rate thing. At 28% the federal tax for two singles earning $125K would be $28,720 each (or $56,540 in total). If the same two people got married, their tax rate is now 33% and their federal taxes are $60,321 - almost $4K more. </p>Ryan commented on 'Who Doesn't Pay Taxes'tag:typepad.com,2003:6a00d83451bcbd69e20120a663799e970c2009-10-21T15:17:39Z2009-10-21T15:17:39ZRyanIt's not like the lowest 24% don't pay anything. It just doesn't go to the government directly. It goes through...<p>It's not like the lowest 24% don't pay anything. It just doesn't go to the government directly. It goes through the hands of more wealthy people, who then pay it to the government, so they don't feel it as much. Those who set prices and rents realize all this, and set them accordingly. No right-thinking business owner would do anything less than to pass the taxes along to the consumer.</p>
<p>I am not saying that living here isn't a good deal--it is. But it's also an awesome deal for those who have the ingenuity and drive to make more money.</p>Greg commented on 'Who Doesn't Pay Taxes'tag:typepad.com,2003:6a00d83451bcbd69e20120a60cf834970b2009-10-21T15:12:56Z2009-10-21T15:12:56ZGreg"I thought using the $250K level by Obama in defining who's taxes would go up was a great move because...<p>"I thought using the $250K level by Obama in defining who's taxes would go up was a great move because that could only hurt about 1% of the population, so 99% of the votes out there would, even if not in great support of it, would not exactly be up in arms."</p>
<p>Because some people knew that wouldn't be the case. Seems you can say anything to get elected.</p>Cindy commented on 'Who Doesn't Pay Taxes'tag:typepad.com,2003:6a00d83451bcbd69e20120a60cf605970b2009-10-21T15:09:24Z2009-10-21T15:09:24ZCindyhttp://www.getalonghome.com"I've always found it interesting that many people pay nothing in federal taxes and yet get the same benefits (including...<p>"I've always found it interesting that many people pay nothing in federal taxes and yet get the same benefits (including the right to vote) as people that pay the entire tab."</p>
<p>Actually, they don't get the same benefits. They also get free food, housing, and health care in a lot cases.</p>Greg commented on 'Who Doesn't Pay Taxes'tag:typepad.com,2003:6a00d83451bcbd69e20120a60cf5ec970b2009-10-21T15:09:15Z2009-10-21T15:09:15ZGregBecause if you took the entire wealth of the top 1% you couldn't afford to run our government.<p>Because if you took the entire wealth of the top 1% you couldn't afford to run our government.</p>Strick commented on 'Who Doesn't Pay Taxes'tag:typepad.com,2003:6a00d83451bcbd69e20120a60cf4bd970b2009-10-21T15:07:11Z2009-10-21T15:07:11ZStrick"Consider this quote by Benjamin Franklin: "When the people find they can vote themselves money, that will herald the end...<p>"Consider this quote by Benjamin Franklin: "When the people find they can vote themselves money, that will herald the end of the republic.""</p>
<p>Fascinating. I'll try to state the following in as unpolitical way I can, because it really is interesting when you think of it how as many people pay taxes as they do. In a country where there is "one person one vote" and the "rich" by definition is the voting minority, how in 200 years has the tax burden not completely shifted to the top 1%. I mean, I thought using the $250K level by Obama in defining who's taxes would go up was a great move because that could only hurt about 1% of the population, so 99% of the votes out there would, even if not in great support of it, would not exactly be up in arms. </p>
<p>But why is it, practically speaking, that anyone below this level is paying taxes at all? Sense of those making $100K of paying their fair share? Sense of unfairness to those making above $250K? Sure those making between $100K and $250K do pay a good percentage of the total taxes at the moment, but I'd think that could easily be replaced by a huge tax increase to those over $1M. Is it that the majority does not (or has not until this point) feel a sense of entitlement? Or is it just that the rich have the pockets to influence enough of the other 99% in their votes? Or is it that 99% of the people would vote the total tax liability to be assumed by the rich, but nobody gets to vote for that, only congressman who are the rich or in the back pocket of the rich?</p>Jessica commented on 'Who Doesn't Pay Taxes'tag:typepad.com,2003:6a00d83451bcbd69e20120a60cece7970b2009-10-21T14:56:26Z2009-10-21T14:56:26ZJessicaTG - Your definition of "Marriage Penalty" differs from the government's. The original "Marriage Penalty" was married couple combined income...<p>TG -<br />
Your definition of "Marriage Penalty" differs from the government's. The original "Marriage Penalty" was married couple combined income versus single person with same income. Would you be better off filing separately?</p>
<p>Read here about the "Marriage Penalty": <br />
<a href="http://www.psychologytoday.com/blog/living-single/200904/marriage-penalty-i-don-t-think-so" rel="nofollow">http://www.psychologytoday.com/blog/living-single/200904/marriage-penalty-i-don-t-think-so</a></p>wanzman commented on 'Who Doesn't Pay Taxes'tag:typepad.com,2003:6a00d83451bcbd69e20120a60cea1f970b2009-10-21T14:52:01Z2009-10-21T14:52:01ZwanzmanTG - Your comment is completely out in left field. As a married couple, you have the option to elect...<p>TG - </p>
<p>Your comment is completely out in left field. As a married couple, you have the option to elect to file as married filing seperately. So in this case, you would be filing returns just as each of you were single people. The only difference would be the fact that only one of you could claim things such as charitable decuctions or mortgage interest (or you could split these deductions). </p>
<p>And also, tax rates are marginal. Just becuase you are in the 33% bracket does not mean that all of your income is taxed at 33% - only the portion that is above the cutoff of the 28% bracket. </p>
<p>People really need to understand taxes better before making these kind of statements. </p>Sean G. commented on 'Who Doesn't Pay Taxes'tag:typepad.com,2003:6a00d83451bcbd69e20120a60ce832970b2009-10-21T14:48:45Z2009-10-21T14:48:45ZSean G. Historical perspective nullifies your Franklin quote somewhat, various internet sources below: "Following the Civil War the need for revenue declined...<p>Historical perspective nullifies your Franklin quote somewhat, various internet sources below:</p>
<p>"Following the Civil War the need for revenue declined and Congress abolished the income tax in 1872. For the next 30 years nearly all revenue was collected from the various excise taxes."</p>
<p>"In 1894, Democrats in Congress passed the Wilson-Gorman tariff, which imposed the first peacetime income tax. The rate was 2% on income over $4000, which meant fewer than 10% of households would pay any."</p>
<p>"[16th Amendment, 1913]<br />
The new income tax law passed by Congress established tax rates of 1% to 7% and included generous exemptions and deductions. As a result, only 1% of the population paid income tax during the first year following the passage of the tax law."</p>
<p>Income tax has historically nailed people with money from income. This is why I think that, while the concept of a flat tax in the United States has some precedence, its antithetical to how the country has 'done' tax for the last 100 years or so.</p>TG commented on 'Who Doesn't Pay Taxes'tag:typepad.com,2003:6a00d83451bcbd69e20120a6636215970c2009-10-21T14:41:15Z2009-10-21T14:41:15ZTGI agree with Jessica that a person's marital (or child) status should not factor into the tax calculation. My husband...<p>I agree with Jessica that a person's marital (or child) status should not factor into the tax calculation. My husband and I both work and pay far more taxes than two single people who make the same income because our incomes are lumped together and taxed at a much higher rate than two singles would pay (28% vs. 33%). In our case, we pay a significant Marriage Penalty Tax - almost $4K a year just in federal taxes (and more for state taxes too). Also, our combined income makes us subject to a very high AMT (Alternative Minimum Tax) that adds about $4K a year on top of our normal taxes :-( I would be ok with paying all these high taxes if it was appreciated at all. However, instead, we are made to feel that we do not deserve to reap the rewards for our hard work (and good decisions) but instead should pay even more taxes! </p>Old Limey commented on 'Who Doesn't Pay Taxes'tag:typepad.com,2003:6a00d83451bcbd69e20120a6635ecf970c2009-10-21T14:36:47Z2009-10-21T14:36:47ZOld LimeyThis year I will pay less in taxes than in any year out of the last five since turning 70....<p>This year I will pay less in taxes than in any year out of the last five since turning 70.</p>
<p>Reasons:--</p>
<p>1) George W Bush enacted a law that eliminated mandatory IRA withdrawals for the year 2009 only.<br />
2) The 6 figure income from CDs in our IRAs is tax deferred.<br />
3) The 6 figure income from muni bonds in our taxable account is tax exempt.</p>
<p>This leaves only our two pensions and maybe a portion of our two social security checks as taxable income.</p>
<p>Sometimes in our system people that don't need help get it and people that need it don't get it.</p>TJ commented on 'Who Doesn't Pay Taxes'tag:typepad.com,2003:6a00d83451bcbd69e20120a6635e50970c2009-10-21T14:36:09Z2009-10-21T14:36:09ZTJBY DEFINITION, A household with two adults and two children will get at least $11K standardard deduction, $14K of exemptions...<p>BY DEFINITION, A household with two adults and two children will get at least $11K standardard deduction, $14K of exemptions and $2K of child credits. With $25K of deductions, you have to make about $15K more than that ($40K total) before the $2K of child tax credit doesn't completely offset it. So if you make less than $40K you will have eveerthing withheld (except SS tax) returned as a refund or even more (refundable credit).</p>
<p><br />
</p>TJ commented on 'Who Doesn't Pay Taxes'tag:typepad.com,2003:6a00d83451bcbd69e20120a60cdfc1970b2009-10-21T14:34:45Z2009-10-21T14:34:45ZTJSheri/JJ - no, that makes no sense. This is talking about having no federal tax liability, not something that comes...<p>Sheri/JJ - no, that makes no sense. </p>
<p>This is talking about having no federal tax liability, not something that comes down to whether you chose the right number of exemptions on your withholding. This would mean that only 9% of those with incomes between 75K and 100K get refunds and the rest have under withheld, which is not correct.</p>
<p>BY DEFINITION, A household with two adults and two children will get at least $11K standardard deduction, $14K of exemptions and $2K of child credits. With $25K of deductions, you have to make about $15K more than that ($40K total) before the $2K of child tax credit doesn't completely offset it. So if you make less than $40K you will have eveerthing withheld (except SS tax) returned as a refund or even more (refundable credit).</p>MonkeyMonk commented on 'Who Doesn't Pay Taxes'tag:typepad.com,2003:6a00d83451bcbd69e20120a6635b5b970c2009-10-21T14:31:14Z2009-10-21T14:31:14ZMonkeyMonkI agree that our current tax system and government spending is pretty broken but I'd rather make $200,000 a year...<p>I agree that our current tax system and government spending is pretty broken but I'd rather make $200,000 a year and pay a larger percent of taxes then make $20,000 a year and not pay any tax.</p>Greg commented on 'Who Doesn't Pay Taxes'tag:typepad.com,2003:6a00d83451bcbd69e20120a60cdc7f970b2009-10-21T14:29:32Z2009-10-21T14:29:32ZGregJJ-- FMF is correct. The % that don't 'pay' federal income tax either in their paychecks or at the end...<p>JJ--</p>
<p>FMF is correct. The % that don't 'pay' federal income tax either in their paychecks or at the end of the year is 47%. If they did 'pay' it during the year they would get it back when they filed their taxes. The headline is not 'sensationalized' but amazing none the less.</p>FMF commented on 'Who Doesn't Pay Taxes'tag:typepad.com,2003:6a00d83451bcbd69e20120a60cd8a7970b2009-10-21T14:23:54Z2009-10-21T14:23:54ZFMFhttp://www.freemoneyfinance.comJJ -- Also near the end of the piece it talks about how Congress is thinking about this situation and...<p>JJ --</p>
<p>Also near the end of the piece it talks about how Congress is thinking about this situation and says:</p>
<p>"If asked to vote up or down on whether they are comfortable with such a large group of voters contributing no federal income tax or payroll tax revenue, the majority may well decide it is appropriate given the means of the households involved. Or they may decide that it's not."</p>
<p>Key words:</p>
<p>"large group of voters contributing no federal income tax or payroll tax revenue."</p>
<p>Not "any extra tax revenue" but "NO tax revenue."</p>FMF commented on 'Who Doesn't Pay Taxes'tag:typepad.com,2003:6a00d83451bcbd69e20120a6635446970c2009-10-21T14:21:07Z2009-10-21T14:21:07ZFMFhttp://www.freemoneyfinance.comJJ -- I don't think it is saying that at all. Look at the chart -- it says "households with...<p>JJ --</p>
<p>I don't think it is saying that at all. Look at the chart -- it says "households with no federal income tax liability in 2009."</p>