A nasty surprise awaits the middle class come tax day

Seattle Post-Intelligencer ^ | January 31, 2004

[unixfox]

Let's see, the government creates a problem and then wants taxpayers to figure it out for them.

Sounds fair.

[patton]

Now that you have proved that you are not paying attention, do you have any other astute observations to make?

[Moonman62]

Bush called for permanent extension of these tax breaks in his State of the Union address but not reform of the alternative minimum tax, which denies families most of the Bush write-offs.

Enron and Arthur Andersen are nothing compared to the federal government.

[petercooper]

Not agreeing with an element of the tax code has nothing to do with how conservative I am.

[Polybius]

Wealth bashing is used by the dems to get votes from those who want wealth but don't intend to work to achieve it.

Actually, the Dems use the term "wealth" when they are actually bashing "income producers".

Two specific people come to mind (initials T.H. and JFK) who are extremely wealthy ($550 million) but have never earned a penny of that fortune themselves nor have they paid any income taxes on it.

I have absolutely no problem in bashing the unearned wealth of certain individuals who try to demonize individuals in my income bracket as "The Wealthy".

[Axenolith]

Most of the people who the AMT was originally designed to "catch" earned their income in tax free municiple bond portfolios and thats why they never ended up paying after it was enacted.

[americanbychoice]

What you are forgetting is that, yes, the 8 million dollar person will pay 1/100th of the 80K person. The benefits he/she receives are also paid accordingly. A washout.
I am retired and have to pay more income tax now than when I earned in excess of $200K per year, but had deductions that I don't have anymore. Strange, isn't it?
What I don't understand is this constant nickel and dime bitching going on.
You could be living in a socialist country like Geramny. There in the "Wonderland" you pay 15.8% of your income for Socialized Medicine, which your employer matches. 19.8% for retirement, which your employer matches. 1% for long term care, which your employer matches. 8% for ecology taxes and a few things more, unemployment et..
The total for "Utopia is 46% deducted from your paycheck. Now you pay income taxes that are much higher than here.
For every purchase they sock you with 16% Value added tax, heavily tax your utilities (3times as much for electricity than here). If you have a car, the road taxes are very heavy and Gas is $ 6 per gallon.
....................and just imagine we actually think about electing UN style liberals into office? I can hear it now............

[Old Professer]

Taxpayers who might owe the alternate minimum will spend 12 hours more preparing their 2003 taxes. They will have to calculate taxes under two formulas requiring eight pages of instructions, a 12-line worksheet and a 65-line form.

Sounds rather melodramatic to me; anyone who would need an entire day to read 8 pages and fill in 72 lines is too stupid to make enough money to pay taxes unless he is a government worker or an "entitled" person.

[Old Professer]

You must be a blabbermouth.

[leadpenny]

What you are forgetting is that, yes, the 8 million dollar person will pay 1/100th of the 80K person. The benefits he/she receives are also paid accordingly. A washout.

I don't understand that statement at all? All are equal until the cap?

Are you saying it is ok for everyone below the cap to pay 12.4% and for everyone who earns above the cap to pay something less and still receive the same benefit?

I don't think the rest of what you said has anything to do with FICA and SS

[Old Professer]

I prepare my taxes using a popular computer program and it still takes me probably 4 hours with only a very basic tax return.

What I can do by hand using a pencil and a calculator in ten minutes takes an hour on any of the on-line tax sites; the only reason for using the computer program is to E-file.

[patton]

You are exactly right, Sir - I am a blabbermouth.

[Old Professer]

I now have to pay tax on the difference between what I bought the stock for, and what it is now worth - EVEN THOUGH I HAVEN"T SOLD ANYTHING, AND HAVE NOT REALIZED A PROFIT!

Are you sure of this? Where is the code?

[AMDG&BVMH]

Congratulations for keeping up the fine craft of welding as a part-time entrepreneur! I know others who would start a small enterprise after their "day job" hours, but the tax complexity literally scares them out of it! And you don't even know until you get into it, that it is worse than you thought it would be!

I use Quicken and Turbo-Tax for the 1040. It is easier to plug the stuff in, than create a stack of papers to take to the accountant. Accumulating the data is prob. the worst part. I do ask the accountant questions, and he does the S corp returns.

The worst is not knowing what our income will be until we get the 1120 back from the accountant. There are just too many variables, and if I try to plug them all in on a hypothetical K-1, I might just as well do the 1120 myself!

1. Actually, I think everyone should be required to do their own tax forms. The tax code should not be so complex that people have to get help, and therefore become even less knowledgeable as to what is involved.

2. Our 1040 is complicated because of our productive enterprises, which the gov't should want to encourage! It is the tax burden (mostly in time and complexity) which gives me the headaches, not the work of the enterprises themselves!! (rental prop., tree farms, store and assoc. consulting). Shouldn't an average American family be able to do things like that, for the benefit of the future and the economy, without being twisted into knots by the tax system?!?

3. The 1040 is the individual return. The fact that K-1s bubble into it and make the guts of Turbo Tax spiel around with AMT and cut off limits, is a problem with the 1040 calculations. NOT with the enterprises that forwarded the K-1s!

[Old Professer]

G'wan; there's no way the tax could be more than what you could buy and sell the stock for on the same day.

[CDHart]

"Why should anyone pay a tax on their income?"

That is the bottom line question. The income tax was declared un-Constitutional in 1895. Then, suddenly, it became Constitutional. The result is that we give government our money to be redistributed as government sees fit. What a bunch of idiots we are.

Carolyn

[SteamShovel]

SELL THE STOCK

I think the point is he should have the right to decide himself when to sell the stock and then pay the tax when he has actually made a profit or deduct the loss if it was a loss. It's his business, not the government's.

[americanbychoice]

If you pay 12.4% of the capped amount of $ 87 000 (2003) your benefits are also calculated at that amount, not of your total earnings. (again, a washout)
What about the 2.9% going into medicare that is not income capped? Does that mean that the 8 million dollar person receives a hundred times the medical care? No! Medicare is just more expensive.
Up to the 87K cap each person is paying the same amount and receiving the same benefit.
By the way it isn't called Fica and SS. The new name is oasdi.

[Old Professer]

Maybe we should form a society, I've been accused often of loquacity.

[leadpenny]

It would be a "washout" if the person paying at 1/100th the rate received 1/100th the benefit. That might be fair. If a person always made the cap gets $1,000 in benefits then the $8,000,000 man would get $10 dollars. That would be a wash.