Ignorance Reins

Most people want the rich to pay more in taxes.  But most people have no idea how much they actually pay.(http://townhall.com/tipsheet/katiepavlich/2012/07/12/people_who_want_rich_to_pay_more_have_no_clue_how_much_rich_actually_pay_in_taxes)

This is an intersting video with normal people showing that they don't have the time or energy to do more than listen to the 30 second sound bites.

Tax the Rich

http://townhall.com/political-cartoons/

Wealthy Americans earn about 50 percent of all income but pay nearly 70 percent of the federal tax burden, according to the latest analysis Tuesday by the Congressional Budget Office — though the agency said the very richest have seen their share of taxes fall the last few years.

CBO looked at 2007 through 2009 and found the bottom 20 percent of American earners paid just three-tenths of a percent of the total tax burden, while the richest 20 percent paid 67.9 percent of taxes.

The top 1 percent, who President Obama has made a target during the presidential campaign, earns 13.4 percent of all pre-tax income, but paid 22.3 percent of taxes in 2009, CBO said. ...

“Specifically, between 2007 and 2009, the share of taxes paid fell for the bottom three income quintiles, was close to flat for the fourth quintile, but rose for the highest quintile,” CBO said. “Within the top quintile, however, the shift was uneven; the share paid by the top percentile fell, and the share paid by the rest of the top quintile rose.” (http://www.washingtontimes.com/news/2012/jul/10/cbo-rich-pay-outsized-share-taxes/)

I am not in the top 1% (or top 20%), but if you worked hard to get there maybe you should be able to enjoy your wealth.  I am not very ambitious and did not work hard enough to make the big bucks, but I am not particularly jealous of those that did.  Some of the wealth is inherited (Kennedy's) or married (Kerry) but much of it is earned through hard work and long hours.

*****

For a long time recently we wished the temperature would go below 80F, then it actually (Alleluia!) went below 70 and this morning it actually made it to below 60F!  These are temperatures I am better able to cope with!

Higher Taxes Lead to ....

A new report says wealthy Maryland residents may be moving out due to recent tax hikes – a finding that is sure to escalate the battle over taxing the American rich.
The study, by the anti-tax group Change Maryland, says that a net 31,000 residents left the state between 2007 and 2010, the tenure of a "millionaire's tax" pushed through by Gov. Martin O'Malley. The tax, which expired in 2010, in imposed a rate of 6.25 percent on incomes of more than $1 million a year.
The Change Maryland study found that the tax cost Maryland $1.7 billion in lost tax revenues. A county-by-county analysis by Change Maryland also found that the state’s wealthiest counties also had some of the largest population outflows.
In total, Maryland has added 24 new taxes or fees in recent years, Change Maryland says. Florida, which has no income-tax, has been a large recipient of Maryland's exiled wealthy. (http://www.cnbc.com/id/48120446)


One of the many problems that states have is that when they tax the wealthy the wealthy have the means to move.  In general, if you are wealthy, you can and do take advantage of "loop holes" or legal means to not pay taxes.


When you have a job and depend on it for your income, you can't move to a cheaper tax environment.  Plus you can't sell your home if you could find work elsewhere.


In many ways, a "fair tax" or flat tax with no or few deductions is fairer.  People want services from their local, state or federal governments, but don't want to pay for them.  If I didn't live in IL, I would prefer to pay more at the local and state level since theoretically they are more responsive to the individuals (not in IL since the dems control the state without any real opposition).


In many ways, government has gotten too big because :



"When the people find they can vote themselves money that will herald the end of the republic." Ben Franklin



“A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship. The average age of the world's greatest civilizations has been 200 years.”
― Alexis de Tocqueville

Estimated Tax

Since I am retired, I have to pay estimated tax every quarter.  My state  (IL) basically taxes every dollar we make and they increased the tax rate by 67% this year.  We get a $2000 deduction but that is basically all. Interesting question, how can anyone live on $2000 per year?

Every year our income increases in the last quarter and not in a predictable fashion, so usually I try to pay the amount that would be due if the amount we made in that quarter + previous quarters was the total,  If you do that usually you have to fill out a 2210 form; where you input the total income up to the quarters and pay more or the same amount that would be due.  The form is horrible to fill out (of course, I have the computer do it for me).

So each year, I send in the 1040 form with the 2210 form AND EVERY YEAR IL IRS claim I owe a penalty since I didn't pay exactly 1/4 of the amount each quarter that is due at the end of the year.  So I have to write them a nasty letter and give them copies of the forms that I already had sent in.  They EVERY YEAR ignore the 2210 form (even though there is a properly marked box on the 1040 telling them that I have sent a 2210 form).

Interesting though is that the US IRS always gets this right.

Other problems I have with the Estimated Taxes is that you have to do it every quarter.  When they withhold too much, they don't give you interest or a penalty.  I don't mind paying them what I owe (though with this screwed up state - we have the highest per capita shortfall, even though they raised the tax 67% - I would rather give my money to charity).

There has been a simple tax form that has be proposed :  2 lines 1) How much do you make and 2) send in that amount.


The only difference between a tax man and a taxidermist is that the taxidermist leaves the skin.Mark Twain


It is a good thing that we do not get as much government as we pay for. Will Rogers

Alexander Hamilton started the U.S. Treasury with nothing and that was the closest our country has ever been to being even. Will Rogers

There is no worse tyranny than to force a man to pay for what he does not want merely because you think it would be good for him. Robert A. Heinlein

Government's view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidise it ~ Ronald Reagan


People who complain about paying their income tax can be divided into two types: men and women.

What's the difference between a tax auditor and a rottweiler? A rottweiler eventually lets go.


A democratic government is the only one in which those who vote for a tax can escape the obligation to pay it.  ~Alexis de Tocqueville

Happy Tax Day

Since I am retired I have to pay quarterly estimated taxes plus usually a certain amount on "tax day."  Many people don't really know how much they pay in taxes since it is taken out of their paychecks each week / biweekly / monthly.  Many people think that they don't pay any taxes since they get a refund each year.

Add up the withholding, add up your real estate taxes, add the sales tax on each purchase, add in various fees, add the amount on any capital gains or dividends, add in the gas taxes on each gallon, etc., etc.  This is a staggering amount.

A refund is only the amount that you overpaid in withholding not free money from the government plus you lose the interest on that money if you have put it in a savings account.

Happy Tax DAY!

In levying taxes and in shearing sheep it is well to stop when you get down to the skin. Austin O'Malley

The way taxes are, you might as well marry for love.  Joe E. Lewis

I wouldn't mind paying taxes… if I knew they were going to a friendly country.  Dick Gregory

If Thomas Jefferson thought taxation without representation was bad, he should see how it is with representation. Rush Limbaugh

Next to being shot at and missed, nothing is quite as satisfying as an income tax refund.  F. J. Raymond

"Old" Taxes

I listen to a lot of Milwaukee radio (I live between Chicago & Milwaukee). They were talking about some taxes that have not been raised in 40 years (beer tax in WI) & parking meter fees (10 years).

Politicians used the excuse that they haven't been raised in so long; it was time to do it (beer tax not yet up but the parking fees increased 100% in parts of Milwaukee).

It is interesting that pols believe in any way to increase the taxes but no reduction in services or gov workers. When times are good governments increase their spending but when times are not good they only consider increases in taxes. In my opinion, just because taxes have not increased in years is a valid reason to increase them. I guess I will never be a politician!

The aging process has you firmly in its grasp if you never get the urge to throw a snowball. ~Doug Larson

Age is an issue of mind over matter. If you don't mind, it doesn't matter. ~Mark Twain

Age does not diminish the extreme disappointment of having a scoop of ice cream fall from the cone. ~Jim Fiebig

OLD, (adj) In that stage of usefulness which is not inconsistent with general inefficiency, as an old man. Discredited by lapse of time and offensive to the popular taste, as an old book.

"Old books? The devil take them!" Goby said.
"Fresh every day must be my books and bread."
Nature herself approves the Goby rule
And gives us every moment a fresh fool.
Harley Shum (DD)

State Deficits

I have compiled a partial list of state deficits below.  I just used Google so the numbers could be off (but they give an idea of the extra spending that states do when times are good that comes to bite them in the end); since it seems that the States have no idea the actual shortfalls.  Probably all the numbers are low estimates.  Looks like it doesn't matter if the governor was R or D, except the ones that have $0 are R (and in oil rich states).

State Party Deficit notes Population debt/person

   (Gov)

AK      R  $0.00       savings       686,293                  $0.00
AR      D $1,600,000,000.00 6,500,180 $246.15
CA      R $38,000,000,000.00 36,756,666 $1,033.83

CO    D $600,000,000 4,939,456 $121.47
CT      R $3,000,000,000.00 6 over 2 yrs. 3,501,252 $856.84
FL      R $2,100,000,000.00 18,328,340 $114.58
IL       D $9,000,000,000.00 12,901,563 $697.59
IN      R $921,000,000.00 6,376,792 $144.43
MI     D $900,000,000.00 10,003,422 $89.97
MN    R $2,400,000,000.00 5,220,393 $459.74
MT     D $200,000,000.00 967,440 $206.73
NC     D $2,000,000,000.00 4.8 over 2 yrs 9,222,414 $216.86
NM    D $454,000,000.00 1,984,356 $228.79
NY     D $15,000,000,000.00 19,490,297 $769.61
OH    D $7,000,000,000.00 11,485,910 $609.44
OR    D $1,200,000,000.00 may be extra 1B 3,790,060 $316.62
PA     D $2,300,000,000.00 12,448,279 $184.76
TX     R $0.00 rainy day fund 24,326,974 $0.00
WA   D $5,100,000,000.00 6,549,224 $778.72
WI    D $2,500,000,000.00 5 over 2 yrs. 5,627,967 $444.21

DEBT, (n) An ingenious substitute for the chain and whip of the slave- driver.

As, pent in an aquarium, the troutlet
Swims round and round his tank to find an outlet,
Pressing his nose against the glass that holds him,
Nor ever sees the prison that enfolds him;
So the poor debtor, seeing naught around him,
Yet feels the narrow limits that impound him,
Grieves at his debt and studies to evade it,
And finds at last he might as well have paid it.
Barlow S. Vode

Taxes

If I didn't live in IL, my tax attitude would be to pay more for the local taxes, then less for state taxes, and then the least for the federal taxes.

Local taxes pay for the things that we use the most; local roads, schools, fire & police departments, libraries, forest preserves, etc..  State taxes in a normal state pay for state roads, national guard, prisons, etc..  Our federal taxes should pay for interstate roads, national defense, a safety net (social security), etc..

But governments are spending more & more on unnecessary things or even destructive things.  Bailing out every industry, ACORN, child care for the wealthy, etc..

A debate that is bought up in our state is that school funding should be a state function since it is unfair that wealthy suburbs spend more on their schools than poorer districts.  One of the reasons that people move to "better" suburbs is the quality of the schools, so they want to reduce the quality of good schools to the level of the other schools.

http://www.chicagoreporter.com/index.php/c/Inside_Stories/d/The_fight_about_funding

is an interesting article on the subject which delves into both sides of the argument.  One of the problems is that more money unwisely spent will not fix the problem.

MONEY, (n) A blessing that is of no advantage to us excepting when we part with it. An evidence of culture and a passport to polite society. Supportable property.

Tax Cheats

It is amazing that poor President Obama has picked so many tax cheats for his cabinet.  I wonder if most people cheat on their taxes or just the more wealthy members of our society.

I don't like to pay fines or penalties so I try to not make mistakes on our income tax forms.  I guess I am just lucky that I don't have a limo at my call or get paid for the extra taxes caused when working over seas which amount was given as a supplement.

The State of IL has for the last number of years (probably 5 of the last 7 years) said that I owe extra taxes because of my estimated taxes.  Our income is very uneven due to some mutual funds that have distributions at the end of the year.  Both the Federal Government & State of IL have a 2210 form that allows for uneven distribution of income.  Every year I fill it out for both the State & Feds.  However, the State ignores it (surprisingly the Feds get it right every time).  So about the middle of the year, the State writes me a letter saying that I owe a certain amount in penalties for insufficient estimated taxes.  The amount is usually not that much (maybe at max $100 usually $10-20) but every year I call them & they say to send in the 2210 form to them.  I do & they rescind the penalty.  The State 1040 form has a box on the back to indicate if the 2210 form was used, I check it before I send it in but they ignore the box & the entire form.  In my files I have a letter entitled "Idiot IL IRS", which I use as a form letter.  I think I should charge them for my time sent gathering the info together & the postage, etc.!

IL likes to have the Income Tax forms send in electronically but they don't accept a 1040 with a 2210 form.  Maybe if they did the form wouldn't be ignored.

INCOME, (n) The natural and rational gauge and measure of respectability, the commonly accepted standards being artificial, arbitrary and fallacious; for, as "Sir Sycophas Chrysolater" in the play has justly remarked, "the true use and function of property (in whatsoever it consisteth -- coins, or land, or houses, or merchant- stuff, or anything which may be named as holden of right to one's own subservience) as also of honors, titles, preferments and place, and all favor and acquaintance of persons of quality or ableness, are but to get money. Hence it followeth that all things are truly to be rated as of worth in measure of their serviceableness to that end; and their possessors should take rank in agreement thereto, neither the lord of an unproducing manor, howsoever broad and ancient, nor he who bears an unremunerate dignity, nor yet the pauper favorite of a king, being esteemed of level excellency with him whose riches are of daily accretion; and hardly should they whose wealth is barren claim and rightly take more honor than the poor and unworthy."

Tax Cuts

"Government's view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it." Ronald Reagan

If you make any money, the government shoves you in the creek once a year with it in your pockets, and all that don't get wet you can keep. ~Will Rogers

The taxpayer - that's someone who works for the federal government but doesn't have to take the civil service examination. ~Ronald Reagan

America is a land of taxation that was founded to avoid taxation. ~Laurence J. Peter

Obama is giving tax cuts to non-taxpaying people.  I find it interesting that these are called tax cuts.  It is welfare.

I am worried that our children & grandchildren & great-grandchildren, etc. are going to have to pay for our "tax cuts".  At what point do we let the economy tank for a while & let the free market system self correct?

ECONOMY (n) Purchasing the barrel of whiskey that you do not need for the price of the cow that you cannot afford

Law of Unintended Consequences

There is a talk show host who often talks about the Law of Unintended Consequences.

A good example is the Ecological imperative that using less gas is good.  Oregon has proposed adding transponders to cars so that the cars which are hybrid (OR has the highest % of these in the US) can be taxed per mile when they fill up since they get more mpg.  Here a good thing buy less gas (less pollution less cash to overseas, etc.) has led to lower gas taxes so government "needs" more tax.

In other states, since gas use has decreased the price has decreased which leads to less tax revenue from sales tax or proportional gas tax.  So other states are looking at OR for inspiration!

Many states increased cigarette taxes to reduce the amount of smoking (let me state for the record I am against smoking!) so as people have stopped smoking, the tax revenue is going down.  Smoking brings in a lot of taxes (of course the "costs" of smoking in terms of health care, etc. are also high).

As people get healthier they live longer, so medicare costs increase, so taxes go up.

Makes you wonder, what can we do that won't increase taxes?

consequence (n) 1 a result or effect of an action or condition : many have been laid off from work as a consequence of the administration's policies. 2 [often with negative ] importance or relevance : the past is of no consequence | he didn't say anything of great consequence.
• dated social distinction : a woman of consequence