Angel!
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Post by Angel! on Apr 15, 2011 15:06:05 GMT -5
I don't know if I am missing something, but I see stuff like this all the time in articles "Take a typical married couple with two kids who earn the median U.S. income, $69,800. After taking standard deductions, they would pay federal taxes of $6,993." news.yahoo.com/s/yblog_exclusive/20110415/pl_yblog_exclusive/a-taxpayer-receipt-calculate-exactly-where-your-tax-dollars-goThat just sounded wrong to me. So I take out $11,400 for the standard deduction, $3650*4 for the exemptions & I get $43800 in taxable income. Look that up in the tables & you $5736 in taxes, already less than the article claims. Take into account the child tax credit & making work pay & this couple really only pays $2936 in taxes. More than $4K less than what the article claims. And that is if they have no other deductions - 401K contributions, health insurance premiums, HSA/FSA, student loans, etc. Am I missing something that would make the claim correct or are all these writers idiots? Why are articles always making ridiculous claims about taxes. I remember the much disputed table that showed a family earning 60K had less disposable income than a poverty level family. They showed the 60K family paying 13K in taxes!
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Taxman10
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Post by Taxman10 on Apr 15, 2011 15:11:58 GMT -5
they are probably including ~$5300 in SS Taxes, since that's the first "place" the article mentions that their money goes??
"The biggest chunk — some 20.4%, or $1430.03 -- goes to Social Security"
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Deleted
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Post by Deleted on Apr 15, 2011 15:16:54 GMT -5
Bugs me too. Our gross income last year was 57K. After IRA deduction 53K. Our total tax was $3441 and we had credits of $3406 for a liability of $47. This was without claiming one of the kids because his Dad gets him every other year, but it did include a $1500 energy credit, so it probably evens out.
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Post by sue on Apr 15, 2011 15:19:16 GMT -5
"they are probably including ~$5300 in SS Taxes, since that's the first "place" the article mentions that their money goes??"
I don't think they are. The "tax receipt" site calculates how your federal taxes are distributed. 20.4 of your income taxes are distributed to SS, it has nothing to do with FICA.
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formerexpat
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Post by formerexpat on Apr 15, 2011 15:19:36 GMT -5
No, you are 100% accurate.
1) the writers are idiots...when it comes to basic tax math. Most people are, not just the writers. 2) it's very easy for a family making $70k to pay $0 in federal taxes and live a nice lifestyle in almost every area of the US if they plan appropriately.
Our current lifestyle costs under $70k [>$320k home, 2 car loans, upgraded cable with HD/DVR, 10% to 401k under $70k scenario]. A few changes if I really made $70k and we could / would avoid paying federal taxes all together.
The bad thing for all involved is when the government believes it takes $70k for basics to be covered and tax the rest of us so they can give others a $70k lifestyle.
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Taxman10
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Post by Taxman10 on Apr 15, 2011 15:47:58 GMT -5
"they are probably including ~$5300 in SS Taxes, since that's the first "place" the article mentions that their money goes??" I don't think they are. The "tax receipt" site calculates how your federal taxes are distributed. 20.4 of your income taxes are distributed to SS, it has nothing to do with FICA. on the "taxpayer receipt" site, click the "?" next to "enter your federal taxes paid" and you'll get: " Your federal taxes consist of federal income tax and FICA tax (or SECA self-employment tax for self-employed individuals).
FICA (Federal Insurance Contributions Act) tax is a payroll (or employment) tax imposed equally on both employees and employers to fund Social Security and Medicare. Your personal federal tax burden includes only your (employee) share, or 1/2 of your FICA total." adding in FICA is the only way they could get an estimated tax that high :-)
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formerexpat
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Post by formerexpat on Apr 15, 2011 15:55:20 GMT -5
I thought insurance contributions were generally referred to as premiums. Why does the federal government consider our deferred annuity and disability premiums as taxes?
Wonder how many people have looked online for prices of a policy for this exact same profit for the amounts that the government "promises" them on their annual statement? The same number that realize they're being bent over...
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Sum Dum Gai
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Post by Sum Dum Gai on Apr 15, 2011 15:57:16 GMT -5
I thought insurance contributions were generally referred to as premiums. Why does the federal government consider our deferred annuity and disability premiums as taxes? Because premiums are something you choose to pay for a product you've chosen to purchase. Taxes are what the government makes you pay with threat of force or imprisonment if you fail to comply.
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hoops902
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Post by hoops902 on Apr 15, 2011 16:01:22 GMT -5
"I thought insurance contributions were generally referred to as premiums. Why does the federal government consider our deferred annuity and disability premiums as taxes?"
They can be both. It's a premium in it's reference to insurance. It's a tax in that it's demanded by the government.
Just because it's a forced payment on insurance doesn't mean it's not a tax.
"Why does the federal government consider our deferred annuity and disability premiums as taxes?"
Because required payment to the government is always considered a tax, regardless of what they use it for. Tax doesn't denote what it's being spent on, it denotes the type of payment. In this case forced payment to the government.
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formerexpat
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Post by formerexpat on Apr 15, 2011 16:55:25 GMT -5
Wrong answer - this was not the case when SS was originally formed.
It appears the government swindled the public out of their money with the formation of SS and subsequent changing of the system from reserve based to ponzi scheme [pay as you go].
Will people sit idly by while they do the same via Obamacare?
The result is always substandard to what people can obtain in the free, and regulated market. Kind of tough to regulate the US government and fight any injustices...as people have seen with Social Security already.
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hoops902
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Post by hoops902 on Apr 15, 2011 17:02:56 GMT -5
"Wrong answer - this was not the case when SS was originally formed."
It's not the wrong answer, it's the precise definition of what a "tax" is. A tax is a sum of money demanded by the government.
It doesn't matter if they use the money to kill kittens, burn it for fun, or make paper mache masks out of it. If the government is demanding you to pay them, it's a tax. It's not a question of what the government "considers it". You, the government, your next door neighbor can "consider" something to be whatever you'd like it to be. The fact remains that it's a tax, regardless of what you prefer to call it, when it meets that very simple criteria.
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formerexpat
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Post by formerexpat on Apr 15, 2011 17:14:24 GMT -5
And an insurance contribution is a premium. They, the government called it an insurance contribution that was collected by the IRS for expediency sake.
Now it might be a tax. Not because it's demanded by the government but because it is distributed like welfare and because the citizens haven't kept the politicians honest.
Anyway, we are off topic to the OP - yes, the writers are idiots when it comes to math. But we knew those soft degrees were largely worthless.
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hoops902
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Post by hoops902 on Apr 15, 2011 17:21:22 GMT -5
"Now it might be a tax. Not because it's demanded by the government "
That's exactly why it's a tax. That's the very definition of the word.
From the dictionary:
Tax: a sum of money demanded by a government for its support or for specific facilities or services, levied upon incomes, property, sales, etc.
"They, the government called it an insurance contribution that was collected by the IRS for expediency sake."
If the government called it "A voluntary contribution to purchase rainbows and happiness", that doesn't make it so if it's a required payment they are demanding. They can call it whatever they like, it was a tax and is a tax. They can call it an insurance contribution, a premium, an investment plan, a profit sharing program..whatever...it doesn't change the fact that it's a tax.
Your argument should be that it's no longer a premium, that now it is a tax only. That doesn't change the fact that for as long as the government has required payment it has also been a tax by its very definition.
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formerexpat
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Post by formerexpat on Apr 15, 2011 17:28:17 GMT -5
Submitting to it being a tax would be ignoring that the US government has been committing insurance fraud against the American people for the past 70 years. I will never consider it a tax. I will have my class action law suit for insurance fraud one day. I'll include you as a plaintiff.
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hoops902
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Post by hoops902 on Apr 15, 2011 17:33:07 GMT -5
"Submitting to it being a tax would be ignoring that the US government has been committing insurance fraud against the American people for the past 70 years."
I guess in my mind I think of it just the opposite. Saying that it is a tax, while the government SAYS it's an insurance premium is both insurance fraud in the operation of it and tax fraud in the collection of it.
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