Taxes

[Phoebe]

What's your tax situation like? I feel like I pay a ridiculous amount of sales taxes on basic items that people need every day. Also feel like I pay a ridiculous amount for property taxes, but that's okay because the schools get it so I'm willing to do it. I think I pay less in state income taxes than I do in property taxes, which is why state services are for s*** now. Nobody has a sense of responsible stewardship or duty; the main thing is that we run everything into the ground so that companies that don't really make new jobs and rich people don't have to pay a dime more.

National income wise I'll probably stand to benefit in some small way from whatever horror the Congress is about to inflict upon us, if they get it done. I don't have enough money to truly benefit, unfortunately. The way federal taxes work, apparently, if you're somewhere in the top 10% of income but not in the actual top 1% you're the middle class now. The other 90% are just screwed, I guess. Isn't it nice to know that you go to work every day so that you can give a big cash gift back to the wealthy? For some reason that outrages nobody, but if a kid somewhere get some food stamps then f*** that undeserving leech, right? Our country seems to be a nation of total assholes at the moment, and yes, I'm going to say it again no matter how many stupid thinky pieces are published on the subject by people who don't want to acknowledge the truth: a big ol' chunk of people in this country are so unbelievably stupid that they vote against their financial self-interest again and again and again. How many abortions did you stop today, stupids? How many babies or unborn babies did you save through helping mothers have the proper nutrition and care? How many dollars did you save on your tax bill thanks to all the tax cutting? Good luck with that. Until these stupid people can be dislodged from their self-harming stupidity, we are stuck with this. Meanwhile, in Finland...

[Tahlvin]

My tax situation is a bit messed up because I'm a self-employed contractor setup as a S corporation. So I get some weird things I have to pay for, such as paying both the employer and employee portions of the Medicaid payroll taxes, or having to pay into the unemployment system even though I don't get to collect unemployment benefits. But on the flip side, anything I buy for the business, like my computer, printer, furniture and decorations for my office, cell phone, etc., is a business expense. So it reduces the amount of business profit that carries through to our personal income tax return, reducing the amount we owe in taxes. So essentially, anything I purchase as a business expense is on sale at a percentage rate equal to our marginal tax rate, federal plus state. And while we're not in the top 1%, we're definitely towards the top of the 99%, so our marginal tax rate ends up being pretty high.

In terms of property taxes, we're alright. We live in an area with a lot of high-value McMansions, but our house is a modest 54-year-old ranch home, and we're less than a year away from having the mortgage paid off. Our property taxes are probably a little higher than a comparable home in most other towns in this area, but our home value also benefits similarly, so it's not a big deal, and it helps fund one of the better school districts in the area.

I like the idea of sales tax, or taxes on gas or tobacco, of paying for what you use/buy, but it definitely needs to be revisited for things like feminine hygiene products, and for some other necessities of modern life.

Our biggest issues has been that our income as an independent contractor tends to remain pretty steady over time. My hourly billable rate hasn't changed since I went free-lance about 7 years ago, so if I want to increase my income, I need to increase the number of hours I work. When you account for things like increased taxes from Obamacare and increases in insurance premiums, and just general cost of living increases due to inflation, every one of those increases ends up hitting our bottom line directly by reducing our take home pay or disposable income. But we're still extremely fortunate compared to many people, so I hate to complain about things like that.

Plus, in less than a year, our oldest will be out of college and hopefully have a job and his own insurance/cellphone/etc., and our middle child will be off to college and paying for a number of her own expenses that we currently cover, so it will be a bit like getting a raise!

[Bonefish]

I don't pay taxes, cuz I don't ever file
I don't do business that don't make me smile
I love my aeroplane cuz she got style
Yeah I'm a treetop flyer...

Seriously though, I am on the bottom end of the pay scale, so my taxes are negligible. If I ever get my framing business off the ground, I assume that will change.

[Mike]

We're solidly middle class. Household income above the median, but nowhere near the top 10%... or even the top 25%, I'm guessing. Combine that with having four kids and we pay very little for income taxes. We get a bunch withheld and then we get almost all of it back each year. That will change soon as the kids age out.

Our house is not terribly expensive, so our property taxes aren't bad, but those are all rolled up in the mortgage payment anyway, so I don't really notice them.

Nebraska's got 5.5% sales tax, plus 1% for the city (which is average for most towns and cities in Nebraska), so sales tax isn't outrageous.

I get off easy, tax-wise.

[Mike]

Inspired by everyone's talk of percentiles, I found a . Interesting. The top 1% are anyone making over $400K per year. Top 10% starts at around $160K. Median is $58K.

Interesting.

As a side note to bring it back to taxes, Trump's tax plan focuses the lion's share of its tax cuts on those making between $500K and $1million. That's percentile rank 99.4 to 99.8--that is, most of the top one half of one percent of the country.

[Eliahad]

Huh, I wonder where my gross income fits in the national percentages. I'm in Tahlvin's boat with the self employment. (My tax preparer has a competition with the musicians for how many total different W2s and 1099s we get. I'm usually sitting around 11 total.) I think I'm in the middle class, but I don't know where the bottom floor of that starts. I am never going to make 6 figures a year in my lifetime, but sometimes I think it would be nice to get closer to that than where I am.

And reading Mike's post now. I'm under the median.

[Tahlvin]

And talking about increases in insurance premiums, I had the lovely task of reviewing our renewal options today...

When the ACA took effect, we had the option to grandfather the non-ACA plan we were on, which we did. Now, each year when we renew, we either stay with the same insurance company we have and go with one of their non-ACA plans, or we go full ACA with either the existing or a different insurance company. We've been frustrated with a few things with our existing insurance company for a couple of years and have wanted to change. But at this point, if we switch from our existing non-ACA plan with this insurance company to the closest comparable ACA plan with another insurance company, then our premium will go up over $700 per month, PLUS we would have to pay several thousand dollars more a year in deductible and out of pocket expenses that we don't currently have to pay. So yes, we would be looking at essentially a $10-$15,000 reduction in our disposable income next year if we wanted to switch insurance companies. Needless to say, we're sticking with our existing insurance company and putting up with the few frustrating things, because that's only going to cost us an extra $100 each month above what it currently costs.

[mimekiller]

SINGLE MALE WITH NO KIDS SO YA KNOW YOUR BOY MIMEKILLER GETS TAKEN TO THE WOOD SHED COME TAX SEASON

[Tahlvin]

For the life of me, I cannot figure out why in the hell the Republican tax reform bill wants to lower the amount of money you can contribute annually to your 401(k) plans. The current limit is $18,000 ($24,000 if you're 50 or older and playing catch-up), and some R-POS wants to lower it to only $2,400, so I hear the current proposed bill puts the limit somewhere in the middle. Seriously??? This is the best and about only way that many people have to save for retirement, and you want to limit them to only $2,400/year?!?! And here I am paying a fee each year just to be able to provide a 401(k) to my small home business for my wife and I. That sure as hell isn't going to be worth it if we can only put $2,400 in it!

I'm waiting for them to eliminate the ROTH option for 401(k)s and IRAs. That's what most of my contributions are. That allows me to put the money in after-tax, but I pay no taxes when I take the money out down the road, while a traditional 401(k)/IRA has you put the money in before taxes, but you have to pay taxes when you take the money out, at whatever the current tax rate is at that time. And given that the money we're putting in these accounts should grow substantially before we take it out, we'll end up saving a ton of money on taxes down the road. It's only a matter of time before they decide that won't work, and that will probably be right around the time I'm ready to start taking money out of my account for retirement!

[Phoebe]

I've now seen three mainstream media articles framing this debate as Trump versus swamp. GOP vs. K-street. What are they even thinking?

[Mike]

How mainstream? Because most of the articles I've seen continue to point out how unpopular this is among Americans, citing that only 28% of people considered themselves even slightly in favor of it.

[Phoebe]

Here is one example, I could get more but closed the pages. It sickens me, honestly. You'd think since 99% of people, literally, are going to be affected in an entirely different way than the other 1%, CNN writers might spend a few minutes of their day looking into that casually. Just for kicks.

[bralbovsky]

There's no good news about this. They've totally lost touch with the fact that taxation needs to be more about incentivizing behavior we want than about politics. I'm beginning to agree with the 'taxation is theft' folks, except they don't understand who's really running off with their cash.

[Ronster]

The WaPo article gave me some hope

401k left alone

Charitable Ded left alone

1st home Morg interest left alone if under 500K

My tax rate will drop from 28 to 25%

[Phoebe]

It will benefit us significantly and I really don't need that money as much as I need a well-functioning society to live in. Oh, they're also taking away some of the incentives to donate that surplus to charity, so that's smart.

[Phoebe]

The proposal to tax tuition waivers is just about the stupidest fucking thing ever. Astounding that people are ok with it, but why is that any surprise at this point? People are sending angry tweets to LeVar Burton, so... fuck em. Give all your money to the billionaires, you utter dingbats. Go ahead, I give up. If half of us are that stupid, well, we are doomed. Where do I exit this psycho carnival ride? Where is the planet of functional people who want to build something good?

[Tahlvin]

Yeah, our timing sucks in that regard. Wisconsin used to give a full-ride scholarship to the top kids in each high school graduating class to any of the state system schools, but they discontinued it a year or two before my son graduated, so he only got $2,500 per year from thr “replacement” program. And now that he’s considering grad school to study computational linguistics, they go and do this tax shit.

[Phoebe]

It seriously prices almost everyone out of the grad school market. But what's really troubling is the realization that this is, for our current crop of Republicans, a feature and not a bug. They don't want to fund scientific research anyway! They don't trust scientists. People go to grad school and get smartened up and suddenly want to talk about climate change and evolution and dangerous industrial practices.

[Walrus]

Let's face it - in a few years, trumps america will have the educated burned at the stake for witchcraft. And all because they can read 'can dick run' faster than trump.