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Friday, March 05, 2010

Why the U.S. is going BANKRUPT

I just got my tax returns back from my tax preparer. (Usually I do my own returns, but the last two years have been somewhat complicated due to the death of my mother and related one-time events affecting my tax status, so I have retained an accountant to prepare the returns for the last two years).

Here's a rough-out of my tax situation. I'm retired. Last year I had approximately $100,000 of gross income, almost all in the form of qualified dividends, from various sources, including part of the earnings of my mother's estate from the prior years. After exemptions and itemized deductions, that was reduced to taxable income of about $82,000.

Now, I knew that the Bush tax cuts limited the top tax rate on qualified dividends to the ridiculously low rate of 15%, so I assumed I would be paying tax of about 15% on almost the entire $82,000, which would result in taxes of about $12,000. I was absolutely floored when the accountant told me my total taxes would be about $2,100 (little more than 2.5% of my taxable income). But, as it turns out, under the BUSH TAX CUTS, the first $67,900 (for married persons filing joint returns) of taxable income derived from qualified dividends is NOT TAXED AT ALL. That's right. The tax on the first $67,900 of income from qualified dividends is not taxed at all. The total tax is zero, zippo, nada, nil!

So, I am only taxed on the difference between the $82,000 and the 67,900 (i.e., on $14,100), and even then the tax is limited to 15%. So, in the end, my total tax is just a shade over $2,100.

And you wondered why we're going bankrupt in this country! My state income taxes are higher than my federal taxes!

Meanwhile, of course, a person who had taxable income of only $16,800 in taxable income from "earned income" sources would pay the same tax I do. That's roughly what someone earning the minimum wage would make. And, the rich still complain they pay too much in taxes!

Jesus must be weeping.


Blogger lvonlackman said...

This wake up call could turnaround America's impeding collapse via Bobus Americanus if this message can get to mainstream media. We urge the author to broadcast via aggressive interface with TV networks, news media letters to the editor, mainstream magazines and radio. We assure you that on 3/19/10, between 3-5PM, your point will be made on WMNY1360-Pittsburgh.

5:03 PM  
Anonymous RE Ramcharan said...

Oh, quit whining. If you were serious about not enough of your money going to the government, you could make a voluntary contribution for reducing the public debt. Here's how:
But I'm thinking you won't, because it's not about Jesus or your taxes, or George W. Bush. It's about coveting other people's wealth and wanting to tell them how to run their lives.

2:44 PM  
Blogger KISSWeb said...

Ramcharan, you do not have a clue. It has zero to do with "coveting other people's wealth," and everything to do with having enough revenue to, for starters, meet the obligations we currently have -- obviously we do not have enough -- and making sure the wealthy pay their fair share.

Of course, the suggestion of paying more voluntarily is frivolous, as I'm sure you intended it to be.

12:30 AM  

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