Taxes

[Anonymous]

This is how taxes work:

Tax Rate Single Married/Joint Married/Separate Head of Household
10% $1 - $8,700 $1 - $17,400 $1 - $8,700 $1 - $12,400
15% $8,701 - $35,350 $17,401 - $70,700 $8,701 - $35,350 $12,401 - $47,350
25% $35,351 - $85,650 $70,701 - $142,700 $35,351 - $71,350 $47,351 - $122,300
28% $85,651 - $178,650 $142,701 - $217,450 $71,351 - $108,725 $122,301 - $198,050
33% $178,651 - $388,350 $217,451 - $388,350 $108,726 - $194,175 $198,051 - $388,350
35% over $388,350 over $388,350 over $194,175 over $388,350

You are only being taxed at a 35% rate on the income you make OVER $388,350. Cry me a river.

[Anonymous]

Anonymous wrote:This is how taxes work:

Tax Rate Single Married/Joint Married/Separate Head of Household
10% $1 - $8,700 $1 - $17,400 $1 - $8,700 $1 - $12,400
15% $8,701 - $35,350 $17,401 - $70,700 $8,701 - $35,350 $12,401 - $47,350
25% $35,351 - $85,650 $70,701 - $142,700 $35,351 - $71,350 $47,351 - $122,300
28% $85,651 - $178,650 $142,701 - $217,450 $71,351 - $108,725 $122,301 - $198,050
33% $178,651 - $388,350 $217,451 - $388,350 $108,726 - $194,175 $198,051 - $388,350
35% over $388,350 over $388,350 over $194,175 over $388,350

You are only being taxed at a 35% rate on the income you make OVER $388,350. Cry me a river.

And that is TAXABLE income, not AGI.

So, really, if you have a mortgage and basic itemized deductions, you're not even triggering the top marginal rate until you gross $425,00 or $450,000 or so.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I have a friend who makes $86,000 a year. He has a SAHW and a grown son. He doesn't know what I make but knows it's more than what he makes.

I am confused and, truthfully, a bit angry that he thinks I should pay more federal, medicare and state taxes, as a percentage, than he does. I do not understand why progressive taxation would incentivize me - my spouse makes over $200,000 a year, so I don't have to work - to keep working outside the home. Why doesn't my friend, and other people in lower tax brackets, understand this and think 39% or more is a reasonable tax rate for families with HHI of over $250K a year?

Your tax rate is not going to be 39%, first of all. Your tax rate will probably not go up at all unless your husband makes well over $200K.

Second, Progressive taxation is an idea that even conservative economists like Milton Friedman endorsed. It is a near-universal notion, so getting angry at your neighbor for it is not worth your time. Almost EVERYBODY believes in it.

PP, don't confuse our progressive taxation system with the recently (as in the past ten + years) adopted term for liberal aka Progressive. You're basically trying to say that the father of conservative economic thinking has long endorsed a liberal position. Per our friends at Wiki: "Progressive" describes a distribution effect on income or expenditure, referring to the way the rate progresses from low to high"

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I have a friend who makes $86,000 a year. He has a SAHW and a grown son. He doesn't know what I make but knows it's more than what he makes.

I am confused and, truthfully, a bit angry that he thinks I should pay more federal, medicare and state taxes, as a percentage, than he does. I do not understand why progressive taxation would incentivize me - my spouse makes over $200,000 a year, so I don't have to work - to keep working outside the home. Why doesn't my friend, and other people in lower tax brackets, understand this and think 39% or more is a reasonable tax rate for families with HHI of over $250K a year?

Your tax rate is not going to be 39%, first of all. Your tax rate will probably not go up at all unless your husband makes well over $200K.

Second, Progressive taxation is an idea that even conservative economists like Milton Friedman endorsed. It is a near-universal notion, so getting angry at your neighbor for it is not worth your time. Almost EVERYBODY believes in it.

PP, don't confuse our progressive taxation system with the recently (as in the past ten + years) adopted term for liberal aka Progressive. You're basically trying to say that the father of conservative economic thinking has long endorsed a liberal position. Per our friends at Wiki: "Progressive" describes a distribution effect on income or expenditure, referring to the way the rate progresses from low to high"

I don't think anyone misconstrues "progressive" as "liberal" in this context. At least, I hope they don't.

PP's larger point remains true: The goal of a progressive income tax has long been supported by conservatives and liberals. In fact, George W. Bush would argue his tax cuts created the most progressive tax system in history.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I have a friend who makes $86,000 a year. He has a SAHW and a grown son. He doesn't know what I make but knows it's more than what he makes.

I am confused and, truthfully, a bit angry that he thinks I should pay more federal, medicare and state taxes, as a percentage, than he does. I do not understand why progressive taxation would incentivize me - my spouse makes over $200,000 a year, so I don't have to work - to keep working outside the home. Why doesn't my friend, and other people in lower tax brackets, understand this and think 39% or more is a reasonable tax rate for families with HHI of over $250K a year?

Your tax rate is not going to be 39%, first of all. Your tax rate will probably not go up at all unless your husband makes well over $200K.

Second, Progressive taxation is an idea that even conservative economists like Milton Friedman endorsed. It is a near-universal notion, so getting angry at your neighbor for it is not worth your time. Almost EVERYBODY believes in it.

PP, don't confuse our progressive taxation system with the recently (as in the past ten + years) adopted term for liberal aka Progressive. You're basically trying to say that the father of conservative economic thinking has long endorsed a liberal position. Per our friends at Wiki: "Progressive" describes a distribution effect on income or expenditure, referring to the way the rate progresses from low to high"

I don't think anyone misconstrues "progressive" as "liberal" in this context. At least, I hope they don't.

PP's larger point remains true: The goal of a progressive income tax has long been supported by conservatives and liberals. In fact, George W. Bush would argue his tax cuts created the most progressive tax system in history.

It's subjective at this point. I agree with you that the previous admin supports it, but I still believe that their thinking is that this is a Progressive concept, which we all agree it is not.

[Anonymous]

Anonymous wrote:

Anonymous wrote:If our income goes down because of higher taxes, which it clearly will to pay for Obamacare at the very least, where you do think we'll cut our budget? I can tell you charitable contributions, which are about 8% of our budget, will be among the first to go. I'm not going to give up my housekeeper or private school if my taxes go up.

And if Romney is elected and eliminates (or caps) your tax deduction for charitable contributions, will you continue to donate 8%?

He would not eliminate charitable deductions. He need it for his own taxes to deduct all that money he gives to the Mormon church. Most likely he will attempt to eliminate the mortgage deduction. His homes are paid out right. Remember, Romney will one touch any deductions that adversely affect his deductions.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:If our income goes down because of higher taxes, which it clearly will to pay for Obamacare at the very least, where you do think we'll cut our budget? I can tell you charitable contributions, which are about 8% of our budget, will be among the first to go. I'm not going to give up my housekeeper or private school if my taxes go up.

And if Romney is elected and eliminates (or caps) your tax deduction for charitable contributions, will you continue to donate 8%?

He would not eliminate charitable deductions. He need it for his own taxes to deduct all that money he gives to the Mormon church. Most likely he will attempt to eliminate the mortgage deduction. His homes are paid out right. Remember, Romney will one touch any deductions that adversely affect his deductions.

He should eliminate the mortgage interest deduction. It's a subsidy for behavior that just recently got us screwed. The optics are good since he owns so many homes. And yet the tax implications for him will be minimal since he probably loses all of that in AMT anyway.

[Anonymous]

"Having said that, I have never in my life (not ever) met someone who stopped working, turned down a raise, or otherwise limited their potential salary because it would push them up into a higher tax bracket. "

I know several SAHMs that wouldn't consider EVER returning to the workforce because of this B.S. excuse.

[Anonymous]

I stopped donating a few years ago to schools. Now all donation requests are circular filed. My favorite things are online banking bill payment since I don't need stamps and credit card reward programs.

http://www.smartmoney.com/borrow/student-loans/the-college-tax-breaks-explained-9644/

We get no breaks on college tuition. Couldn't do a 529.

http://forum.savingforcollege.com/ubbthreads.php/topics/47466/529_plan_as_part_of_gifting_st#Post47466

Any changes on 529?

[Anonymous]

Anonymous wrote:I definitely agree with the Social Security thing. Obama mentioned that in the 2008 election. I wish it would be changed to make everyone pay SS on all their income, including high earners.

Having said that, I have never in my life (not ever) met someone who stopped working, turned down a raise, or otherwise limited their potential salary because it would push them up into a higher tax bracket.

don't have a dog in the fight, but want to add that I have seen people turn down raises for tax reasons. i'm an employment lawyer and it was a issue for the company i worked for.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I definitely agree with the Social Security thing. Obama mentioned that in the 2008 election. I wish it would be changed to make everyone pay SS on all their income, including high earners.

Having said that, I have never in my life (not ever) met someone who stopped working, turned down a raise, or otherwise limited their potential salary because it would push them up into a higher tax bracket.

don't have a dog in the fight, but want to add that I have seen people turn down raises for tax reasons. i'm an employment lawyer and it was a issue for the company i worked for.

That is the quite possibly the stupidest thing a person can do.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Yes I stopped working b/c I had to pay 3 cent more on every additional dollar I made(even though I do not pay the 6.7% ss tax on that additional dollar!). I am outraged! How dare you! Anyone know what time the moon comes up, I have to yell at it today.

You know, since we have no debt, my time is worth a lot to me. At some point, additional taxes will cause me to say, eh, I'll just SAH.

Please do! Someone else will be happy to do your job and pay taxes on the income. It would be great if more people who don't want to work and pay taxes just quit their jobs so that people who want to earn a paycheck and pay taxes can.

[Anonymous]

"Having said that, I have never in my life (not ever) met someone who stopped working, turned down a raise, or otherwise limited their potential salary because it would push them up into a higher tax bracket. "

I know several SAHMs that wouldn't consider EVER returning to the workforce because of this B.S. excuse.

Have you asked their husbands?

[Anonymous]

Anonymous wrote:

Anonymous wrote:This is how taxes work:

Tax Rate Single Married/Joint Married/Separate Head of Household
10% $1 - $8,700 $1 - $17,400 $1 - $8,700 $1 - $12,400
15% $8,701 - $35,350 $17,401 - $70,700 $8,701 - $35,350 $12,401 - $47,350
25% $35,351 - $85,650 $70,701 - $142,700 $35,351 - $71,350 $47,351 - $122,300
28% $85,651 - $178,650 $142,701 - $217,450 $71,351 - $108,725 $122,301 - $198,050
33% $178,651 - $388,350 $217,451 - $388,350 $108,726 - $194,175 $198,051 - $388,350
35% over $388,350 over $388,350 over $194,175 over $388,350

You are only being taxed at a 35% rate on the income you make OVER $388,350. Cry me a river.

And that is TAXABLE income, not AGI.

So, really, if you have a mortgage and basic itemized deductions, you're not even triggering the top marginal rate until you gross $425,00 or $450,000 or so.

Maybe this is our problem. We make about $430,000 a year and have no mortgage, so our deductions are small and we get screwed by the AMT.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:If our income goes down because of higher taxes, which it clearly will to pay for Obamacare at the very least, where you do think we'll cut our budget? I can tell you charitable contributions, which are about 8% of our budget, will be among the first to go. I'm not going to give up my housekeeper or private school if my taxes go up.

And if Romney is elected and eliminates (or caps) your tax deduction for charitable contributions, will you continue to donate 8%?

He would not eliminate charitable deductions. He need it for his own taxes to deduct all that money he gives to the Mormon church. Most likely he will attempt to eliminate the mortgage deduction. His homes are paid out right. Remember, Romney will one touch any deductions that adversely affect his deductions.

He should eliminate the mortgage interest deduction. It's a subsidy for behavior that just recently got us screwed. The optics are good since he owns so many homes. And yet the tax implications for him will be minimal since he probably loses all of that in AMT anyway.

Um, no.

Mitt Romney doesn't need a mortgage, so there's no interest for him to deduct. Rich people buy homes for cash.

The AMT doesn't affect mortgage interest on a primary residence in any case.