Comments for blog.limedaley.com/post/2008-taxes

Comment #1908

2009-04-03T14:46:32Z

I think you'll have to make quarterly payments, unless that transferral thing works, I've never had to do that.

I read somewhere about the withholding thing, but I thought the townships were making companies withhold the correct amount, and send it to the right place, rather than withholding the wrong amount and sending it to the wrong place.

Probably no one files the local taxes, so the townships were getting tired of not getting the money they "deserved".

From a business standpoint, it is hard to figure out what taxes they want to collect, so it is fairly understandable when townships don't collect the taxes appropriately.

Comment #1907

2009-04-03T14:25:29Z

My employer is now withholding local taxes for Moon township, even though most of us don't live there. When we asked them to stop, they refused. Instead we have to file a form at the end of the year with our own locality to have the money transferred. (Meanwhile I guess I'll have to convince them not to fine me for not making quarterly payments, or make the payments and get a refund later. Ugh.) It seems it is optional now, but will be mandatory in a couple of years, for employers to withhold local taxes even if you don't live in the employer's locality.

Comment #1906

2009-04-02T18:41:37Z

Yay, just talked to Middlesex Twp, and the only two taxes they impose on people is a $52/year "services" tax, and the 1% income tax, so we won't owe another 1% for a business "privilege" tax (like Pittsburgh does) and what I thought I might have seen on the website.

We do still have to calculate Pittsburgh's payroll tax each quarter, which would be a maximum of $9 or so each quarter, but takes around 10 minutes to prove that we owe $0 since we don't take money out of the bank that often, and the income earned in Pittsburgh is rather small. The tax guy said that if it was easiest, we could just pay the full amount on gross income and not calculate it, but of course, that helps his paycheck, so he would think that a good idea...

Comment #1905

2009-04-01T13:36:53Z

Here's a little more: Why incorporate in Delaware?. Looks like you can set up a business in Delaware, do your business outside Delaware, and only get taxed on the income earned in Delaware. And nobody knows who owns the company, so I suppose it's a good setup for holdings that purvey cement footwear in other states, for example. Or just people who want to hide their money from their government.

That brings us to the philosophical question of whether tax havens are a boon because they create tax competition and hence an incentive for cheaper and perhaps more efficient government, or a danger because they allow the sneaky (and usually the sneaky rich) to benefit from their home country's services while evading the taxes that fund them.

Comment #1904

2009-04-01T09:26:30Z

Delaware is very tax friendly, so lots of companies are incorporated there. I am not exactly sure how that works.

Portions of Microsoft are incorporated in Ireland and Nevada, (and they ship things to the US from Ireland), which I assume is for tax and also patent/licensing reasons.

Comment #1903

2009-04-01T08:27:50Z

A bit of a tangent, but there's an article in the Economist on tax havens, which makes me think that one way to get out of paying US taxes as an overseas resident citizen would be to open a business in Delaware... what a wacky world.

Comment #1902

2009-03-25T14:57:02Z

I had to get a form signed by the Middlesex Township for Pittsburgh in order to convince them that I actually moved, and aren't just ripping Pittsburgh off by not paying the taxes. While I was there, she had me file the township taxes, rather than mail them in, which was good, since she told me that Middlesex no longer cares about rental income (though I showed her in the instructions where it says they do, but she insisted they haven't, since 6 years ago, so I stopped arguing and let her give me money).

And once the rental income isn't taxed, then Pittsburgh and Middlesex both tax the same income, so it is quite easy to verify if the taxes are correct and line up with the PA Schedule C, which they didn't. She said she didn't care, and just reduced the Middlesex taxes to make it line up with what I was paying Pittsburgh and PA.

She also said it would be likely that we would get audited in 2012, when the state sends Middlesex the report about how much income I reported to them. But, she said not to worry, that I just had to show the Pittsburgh taxes, and everything should be fine.

Since the numbers were wrong, I went back to figure out what I had done wrong, and fixed up our finance program to give us better reports, so we do less math by hand. It looks like we took out rental income without taking out rental expenses or something. But, even after I fixed that, I had calculated the mileages incorrectly also. Urgh.

So, I'm refiling Pittsburgh, PA and Federal taxes today. I'll end up paying Middlesex $.50 too much or something like that, but if they want to audit me over that, I guess they can feel free.

I also discovered that Middlesex also has various business taxes, where I definitely owe one of them ($52/year - copying Pittsburgh's local services tax) and perhaps some of the others, I'll need to talk to them to make sure.

The local services tax is pretty annoying - I bought the argument that Pittsburgh needed that tax, since so many people work outside of the city, and come in and take advantage of various things, without paying for it. I am not sure what services Middlesex Township provides. I wish they would just simplify the taxes, ie. add the $52 to the percentage on the income, since I think it only affects people earning income, so it'd end up being the same thing - though I guess it is hard to make the flat tax be a percentage - but just add it as a line-item to the income tax form or something.

Comment #1901

2009-03-25T10:00:29Z

That's true; housing costs were higher there. There were plenty of homes in our zone that cost as much as or more than the houses in that part of Pennsylvania, but there were definitely more homes at the lower end—or we wouldn't have been there. :)

On the other hand, food costs between the two areas are only marginally different. And of course a big reason why the cost of living is higher there is that the taxes are much higher.

One thing the Florida schools do is rely much more on a well-organized network of volunteers. When our kids were in school, I considered my volunteer work "in lieu of taxes." This not only relieves teachers of a lot of grunt work, but also encourages the parents to be involved in their children's schools, which I see as a very good thing. And before anyone jumps on me with the idea that "working" parents can't do that—somehow they found a way, because there were plenty of employed volunteers.

Comment #1900

2009-03-25T03:56:54Z

I wonder if one of the items that may explain the different cost per student in PA and FL would be the difference in the cost of living in those areas and thus the expenses for teachers, etc. It certainly cost a lot more in that part of Philly to own a house.

Comment #1899

2009-03-24T15:16:29Z

Unfortunately, it is kind of hard to ask the filtering system why it didn't like a particular comment, but another comment of Phil's was blocked, now showing above.

I do find it humorous that people complain about the couple hundred million bonuses for AIG, but don't seem to care all that much about the billions of dollars that are being wasted just as much, or perhaps even worse.

But, as Chip would say (presumably) this money is actually being spent well. No?

Comment #1898

2009-03-23T20:25:55Z

Ah right, I wasn't thinking when I read that part too quickly. Yes, the tiered system does get high as you go up, which is why whatever that statistic is about 5% of the people paying 75% of the taxes or whatever it is. And some people want to tax the rich even more.

Ah, the American dream...

Comment #1897

2009-03-23T19:32:15Z

I tried to include a link, so I may have typed "< a" or made some such goof. Anyway, I only wanted to point to the wikipedia articles on Income Tax in the United States (with its table showing the different rates), mention that I'd first thought 94% meant 94% on the entire income, not just the part that fell into the highest bracket (though that's still a serious disincentive - is that a word?), point to the paragraph immediately below the table of tax rates, and finally muse out loud what would happen if voters in the US got to decide on the tax rates like we do in Switzerland (of course with a link to the wikipedia article on Taxation in Switzerland). No worries.

Comment #1896

2009-03-23T16:15:40Z

'When one considers the comparatively extensive system of congressional checks and balances that goes into the spending of every dollar in the budget via the normal appropriations process, what's happening in the Fed amounts to something truly revolutionary — a kind of shadow government with a budget many times the size of the normal federal outlay, administered dictatorially by one man, Fed chairman Ben Bernanke. "We spend hours and hours and hours arguing over $10 million amendments on the floor of the Senate, but there has been no discussion about who has been receiving this $3 trillion," says Sen. Bernie Sanders. "It is beyond comprehension."'

http://www.rollingstone.com/politics/story/26793903/the_big_takeover/print

(bad language)

Comment #1895

2009-03-23T14:13:37Z

I also don't follow why a bigger state would need more tax money, unless there weren't enough people to support the "larger" state. And why does PA have the largest legislative body in the country (I think that is still a current statistic)?

Comment #1894

2009-03-23T12:20:03Z

Chip said: "Jon, the state of NH and PA are so completely different that it is hard to compare them. The services that are needed in a tiny state are vastly different than those required in a large state with two major urban areas."

I've lived (among other places) in both Pennsylvania (higher tax state) and Florida (lower tax state), and have to agree with Jon about services rendered. Florida has four of the top 50 U.S. Metropolitan Areas (7, 19, 27, and 40) and Pennsylvania has two (5, 22), so it's perhaps a better comparison.

One area that's easy for me to compare is education. When our children were in Florida schools, the cost per pupil was a little over $3000; at the same time, the cost per pupil where I went to school in Pennsylvania was over $7000. Those who know me know that I can expound day and night on what's wrong with the American educational system, but that is independent of one state versus another. Both school districts were highly rated, and while there are some areas in which I would have called the Pennsylvania schools better, there are others in which the Florida schools were definitely superior. What is absolutely crystal clear is that in no way were the Pennsylvania schools twice as good as those in Florida.

Comment #1893

2009-03-23T11:55:41Z

Although I'm generally a stay-out-of-debt person—I see no good place in our society for credit card debt, for example—debt does have a good and proper function. Like salt in food, it can enhance or destroy, depending on how it is used. As someone once said, when you save money, you are giving a gift to your future self; when you borrow money, your future self is giving a gift to you. If you've ever looked back on your life (most of you are probably too young to have done much of this yet) and said, "I wish I'd had back then some of the money I have now," you'll know why your future self might want to give a gift to you in the present. I would love, for example, to be able to take some of today's money (okay, six month's ago's money) and spend it on educational materials for our children that we felt we couldn't afford back then. (Hence, you might rightly conclude, grandparents' delight in buying things for their grandchildren.) Of course that kind of thinking can get 'way out of hand, which is why people have so much credit card debt.

Mortgages and college loans—and sometimes even car loans, though that's less clear—make sense on an individual, personal level. It depends on the economic situation of the area, but it can be less expensive to make mortgage payments than to pay rent, even if you're not gaining equity. Leverage is not all bad (again, like salt), and the income gain provided by a college degree can easily make a college loan worthwhile rather than drawing out the process by "working one's way through college." As for car loans, the chief problem I see is that as long as they're borrowing money, people will saddle themselves with foolish debt by getting a fancier car than they need for basic transportation.

Individual loans for specific purposes can make sense—it seems to me that loan programsare what mess everything up. Heather would not have had a college loan had the subsidized low interest rates not made it foolish to sell assets instead. What's worse, when so much loan money is available, it doesn't really make college more affordable because it drives up tuition and other costs; colleges assume you will be getting loans, and even consider a loan to be part of your financial aid package, which I call a cruel deception. Perhaps we should put the whole financial aid genie back in the bottle again, though that's probably impossible. What started out as an attempt to help the poorest of the poor now actively discourages saving for college and working one's way through, and begins to look more like an entitlement program for the colleges themselves.

Back when a mortgage was a carefully investigated and thought out agreement between one bank and one family, the system worked reasonably well. But when financing became looser and incentives for lending/borrowing only what one could afford were much reduced, prices were driven up—and eventually the house of cards collapsed.

I see a huge difference between prudent and foolish borrowing, whether by individuals or by governments. Unfortunately, inflation—which is where I fear we are headed—rewards borrowers indiscriminately and penalizes savers. True, the U.S. Government will always pay its debts, but it can also print money, and that $1 it returns to you may be worth only a fraction of the $1 it borrowed.

Comment #1892

2009-03-23T11:48:23Z

Chip, the feds health care spending is either for general health care services which doesn't really result in structural changes to how health care is delivered, or for establishing regional electronic health record centers which are a total invasion of privacy. They plan to store all your health records at centralized locations whether you like it or not. There are private sector companies which are working on the equivalent of personal usb devices which can store your data securely but they certainly wont be getting govt funding.

Comment #1891

2009-03-23T11:33:58Z

Ah, so then "dollar is worthless" => "being zimbabwe". I wasn't sure what the connection was.

And yes, that makes sense. I have a friend who says (years ago, so not counting current events) we should short-circuit the whole process and just swap houses with all of the Indians, and we can all move over there, and then we don't have to live in this stress-filled world of off-shoring, etc. "Just get it over with and go live on $1/day or whatever..."

Comment #1890

2009-03-23T11:31:59Z

Sure, perhaps even the highest taxes in the country (though Connecticut likes to complain about their property taxes) but lowest taxes overall.

You can debate which taxes should be used or whatever, but I think starting with the lowest overall is a good place to start.

Comment #1889

2009-03-23T11:31:44Z

Jon, when the federal reserve buys treasury debt like that, it's basically printing dollars out of thin air in order to pay for government spending. This will make the dollar worthless.

Comment #1888

2009-03-23T11:28:20Z

Jon, NH has higher average property tax rates than PA does.

Comment #1887

2009-03-23T11:24:48Z

Phil - can you explain what you mean?

Comment #1886

2009-03-23T11:23:05Z

Chip: It's not people and countries who are buying all the debt. It's the federal reserve. So yeah, technically we'll pay back the debt, but only by being zimbabwe.

Comment #1885

2009-03-23T10:48:58Z

I think that's a rather odd division of percentages—why, for example, are Law Enforcement and General Government lumped together? And if you really want to get an idea of how much money is spent on social services, you should put together at least four of those categories. National defense spending doesn't look so bad at 19% when you compare it to 66% social spending.

In addition, national defense is obviously a most important function of the national government, whereas social programs arguably are not. Some social programs are perhaps done better on a national scale, but there would certainly be disagreements as to which ones, and most I would venture to say would be more efficiently handled at the state and local level. I don't know what's in the Unemployment category listed above, but I know from experience that unemployment compensation is handled at the state level, and that payments are lower in Florida than in Massachusetts for the very good reason that it costs more to live in Massachusetts than in Florida.

Not that any of this excuses government waste, whether in the military or anywhere else.

Comment #1884

2009-03-23T09:39:04Z

A business guy from CMU directed me to this guy's interpretation of current events. I've never heard of him, so I don't know who he is or how much he knows, but the reporter seems to think he knows what he is talking about.

"Much of it doesn't have any short-term stimulus. If you raise research and development, I don't see how it's going to short-run stimulate the economy. You don't have excess unemployed labor in the scientific community, in the research community, or in the wind power creation community, or in the health sector. So I don't see that this will stimulate the economy, but it will raise the debt and lead to inefficient spending and a lot of problems"

And: "There is also the more fundamental question of whether one dollar of government spending can produce one and a half dollars of economic output, as the administration claims."

Comment #1883

2009-03-23T07:53:23Z

Hrm - I went to check the taxact estimates, and they've changed, so presumably someone else noticed something looked wrong.

National Defense $1,268.00 19%

Veterans and Foreign Affairs $267.00 4%

Medicaid, Food Stamps, and Related Programs $868.00 13%

Unemployment and Social Services $400.00 6%

Social Security, Medicare, and Other Retirement $2,536.00 38%

Interest Payments $601.00 9%

Law Enforcement and General Government $133.00 2%

Physical, Human, and Community Development $601.00 9%

Why I went back to check the rates is that I think part of the issue is what Dad-o mentioned in the very first comment: that the social security tax is a flat tax, and it seems to me that the defense "tax" is not?

Another thing I woke up thinking about is that "Dad-o" said about it hurting people with low incomes more - presumably I am not being included in the "low income" bucket, though I find it humorous that I qualify for free health-care - I guess that is the up-side of the politicians thinking that "rich" people earn 250,000 or whatever the number is.

Comment #1882

2009-03-23T07:35:28Z

Note to any readers following along by email-only - you probably didn't get Phil's comment either, since the commenting system was offended by my comment about discriminating against Swiss commenters, and blocked Phil to prove a point.

Comment #1881

2009-03-23T07:32:34Z

The "all economists" quote came from the 20/20 videos I linked to the other day.

Little snippets, and so it possible that they were taken out of context, if you have links to the longer versions, I'd be interested to see what the people "really" believe, and why they think this is the best path.

It is crazy (to me) that you think it wasn't big enough. I suppose that is probably true in one sense - the current amount of money won't fix anything, so obviously more money is the solution.

As far as being in a depression - certainly you can't think that the money being spent now is instantly affecting anything, right? The bank money only recently actually happened right, so any current differences are only a result of perception, right?

On another topic, I woke up this morning realizing that I calculated the self-employment tax incorrectly, and I'll fix the calculation now (though that highlights part of my point - that the tax rules are so confusing, it is close to impossible to be sure that one actually calculated it correctly).

Comment #1880

2009-03-23T03:07:50Z

Phil, the idea that the US government won't pay back it's loans is ludicrous. Just a couple of months ago, we were borrowing money at a negative interest rate (which means people and countries were so desperate to loan the US government money that they were willing to buy treasury bills at auction knowing that they would not get 100% of their principle back. To do that when one knows there is no possibility of reward means you are also pretty darn sure that there is no risk) One year Treasury bills are paying .6% right now. If the rest of the world had any reservation about loaning us money, the auctions for T bills would result in much higher interest rates than that. If it just takes a .6% return to crowd out investment in the private sector, that's hardly the government's fault.

I have no idea what your comment about health care spending means.

Jon, the state of NH and PA are so completely different that it is hard to compare them. The services that are needed in a tiny state are vastly different than those required in a large state with two major urban areas.

I know you readily admit to not paying attention to the news, but where did you hear that "all economists" thought the stimulus was a good idea? The consensus of economists was that the stimulus package was too small, but of course no academic position is ever unanimous. I certainly believe that the stimulus package was too small. Economic stimulus = spending money, so of course the stimulus is going to fund projects that have already been on the drawing table. Yes, the politics have changed but the impetus for stimulus is economic.

It also does not make any sense to talk about astronomical federal spending unless you are relating it to a percentage of GDP. Sure it's a lot of money, but even with the stimulus package and the increased spending in Obama's budget proposal, our government still will spend less as a percent of GDP than many industrialized countries. And it is far from a complete waste of money.

I go back and forth on the question of whether we are going to enter a depression or not, but if the government had not intervened, as imperfectly as they did, with the banks, then I think we would already be there.

Comment #1879

2009-03-22T22:18:21Z

Chip: I don't know where taxact got their numbers, hadn't gotten that far in thinking about it.

One reason I think that starving the beast would be a good idea is that it works in NH. They have the second lowest taxes in the country, and I have yet to figure out what services they don't provide that Pennsylvania does. When I lived in the city, we had free trash pickup, but now I pay for that, and that was the only item I had thought of.

I suspect that NH didn't get the way it was by thinking about starving the beast, and it is probably much harder to decrease spending, since every politician has their favorite projects to spend it on.

I think it'd be great to reduce spending on defense. We waste so much money in so many areas of defense. As a federal contractor, I've seen insanely expensive items being bought by the government. I have no idea why the system is setup to require the government to buy stuff only from federal contractors, who can then jack up the price 3 to 4 times what it would cost if I walked down to Target. I assume the system was created in order to cut down on the money being given to friends of government employees, but the system they setup is really, really bad.

Heather did have a loan, I didn't. We have had mortgages for our houses, we paid the first one off in five years, and hope to have a similar number for the second, though it might end up longer if we actually get good tenants at the old house (which we might be getting new ones this week...). I don't expect to ever get a loan for a car. We went without a car for quite a while, certainly in the city you don't need a car, and Pittsburgh isn't exactly known for its good public transportation. I have wondered if we'll ever have two cars, probably not now that I am home; though I did recently meet a guy who also thought one car was perfectly fine for a family, and he takes it to work each day...

As far as government spending keeping us out of a depression, I don't think that is a wise idea. We're pretty far from a depression, and the gazillions of dollars they spent of my money is astronomical, and a complete waste of money. It makes sense in terms of the big government folks finally had an excuse to pour money into lots of projects that they've always tried to do before, but unable to do so, and unfortunately, now folks have believed that throwing money around will actually do some good. And given that it has been said that "all economists" thought it was a good idea, and promptly a whole bunch of economists wrote a letter saying they all thought it was crazy, shows to me that the money spent was a political decision, and not an economical one.

Comment #1878

2009-03-22T22:06:08Z

Sorry Stephan, the mean commenting system seems to not like Swiss commenters, or at least you, since you seem to run into more trouble than the average person. I suspect that you might have used a troublesome < sign, which I hadn't (until this morning, when describing the problem to someone at church) figured out a solution to. I'll have to try out my idea to see if I can make it work properly, without letting the hackers post nasty stuff. For now, the solution is to type < whenever you want a < sign.

Comment #1877

2009-03-22T21:04:52Z

I would also dispute that student loans and mortgages are so often a wise course of action.

You can't bankrupt your way out of a student loan so unless your college experience goes perfectly, and for large numbers of people it does not, a student loan will condemn you basically to a life of slavery.

As for mortgages, well we've seen how good an idea those have been for people recently. If you didn't fundamentally buy a property for value, a mortgage is like leverage and can wipe out your net worth in tough times.

But the bottom line is, the US government is not the equivalent of a responsible citizen taking on a loan to buy a cheap car to get to work or a 15% down mortgage. The US government and economy is more akin to Casey Serin.

Comment #1876

2009-03-22T20:52:40Z

Chip, the rest of the world is beginning to be unwilling to lend us their capital because they are beginning to see that we will never pay it back.

The fesd health care spending is purely either consumptive or aimed at violating patient privacy.

You left out a few negatives of the feds' current spending policies like the destruction of our currency and the crowding out of investment by new private sector agents who would actually create economic value for the capital spent.

Comment #1875

2009-03-22T18:43:42Z

As far as only spending the money we have, that's not really a good idea as a universal principal. I don't know if you or Heather took out any student loans for your degrees or not, but spending money one does not have on a college degree is often a wise course of action. I don't know if you paid cash for your house or not, but taking out a mortgage for a house is also often a wise course of action (although not always, as we have seen over the past year). Most small business need to spend money they don't have in order to get off the ground.

Even spending money one does not have for a car is often a wise course of action. Policy decisions made over decades means that having a car if often necessary to hold a job. If one cannot pay cash for a car, then the benefits of spending money one does not have on a car (having a job) often outweigh the negatives (needing to pay interest on the loan, having an asset that only depreciates, etc.)

Since the rest of the world is still willing to loan our government money at extraordinarily low interest rates, the benefits of the federal government spending money we don't have (keeping this recession from becoming a depression, investing in a sane health care system to save huge amounts of money in the long run, investing in the infrastructure that will allow for long term economic growth, etc) will far outweigh the negatives (paying interest on debt, the need to raise tax rates to what we had during the 1980's and 90's, etc.)

Comment #1874

2009-03-22T17:21:24Z

The 94% line up with the

Comment #1873

2009-03-22T15:14:51Z

I have a hard time believing TaxAct's reporting of where your particular taxes go. Defense makes up about 30% of the federal budget and the combination of Social Security/Medicare/Medicaid (which doesn't make much sense to me to combine, but everyone does) is about 45% of the budget. If you are in the 10% tax bracket, I would have guessed that a much, much higher % of your taxes would have been for SS/Medicare/Medicaid, but only 9% to defense does not seem very likely to me either.

As to "starving the beast," it does not work because it is a silly political slogan, not an approach to policy. Most Americans have no desire to live in a third world country. I agree that we spend way too much money on defense (we spend about $623 billion while the rest of the entire world combined spends $500 billion!) but the politicians who talk about starving the beast have no desire to touch the single largest item in the federal budget. Actually, I don't think very many other Americans really want us to reduce defense spending either.

Comment #1872

2009-03-22T12:34:43Z

I just figured out why "starving the beast" doesn't work any more - they'll just spend money they don't have, and let someone else deal with figuring out where to get the money later.

I have a novel thought - what if we only spent the money we actually had???

Comment #1871

2009-03-22T12:28:02Z

The "14%" tax isn't exactly that for self-employed folks, since the formula is actually as calculated below. This formula is only valid for incomes between $433.13 and

$110,449.38. Below the minimum, you don't pay any, and above the maximum, you pay 11.45% on the first $110K, and 2.68% on the rest.

Variables:

GI: gross_income (not counting rental income, at least for "active income", which is what we earn)

TR: Tax rate: whatever percentage bracket you fall into (10%) for us.

GI * .9235 * .153 - TR * (GI*.9235*.153*0.5)

So, for us, it is actually 13.42%.

Comment #1870

2009-03-22T12:16:11Z

The article I linked in the previous comment looks like a pretty good article; anyone know if his history is wrong?

Its hard to imagine a 94% income tax. And too bad for the South, that if they had continued to oppose it, maybe it wouldn't be here today. And like so many things, they voted for it since it only taxes the higher earners, which didn't include most of them, so it didn't matter too much.

I also hadn't heard the statistic of the average American taking 20 years of work to pay his taxes, and then he can start actually earning on the 21st year. I had heard about the celebrations of "freedom day" or whatever it is called, when people celebrate the first day of the year that they are earning money for themselves, rather than paying the government. My day was February 16th, which I realize is early compared to lots of people, but pushing it lower and lower is always better.

Anyone know why I read that the old saying, "starve the beast", is an "old saying", and not still used? I'd never heard of it before, and I think it sounds pretty good.

Comment #1869

2009-03-22T12:06:12Z

Wikipedia linked to this article about the origination of the income tax in the US.

Comment #1868

2009-03-22T12:03:09Z

Some would say that the income tax as people generally believe it exists, doesn't actually apply to "regular" citizens, and that the whole thing is a big scam on the American people.

Unfortunately, like the rest of our legal system, the people with the money win, no matter who is right, and so the various people who have stopped paying taxes have ended up in jail for long periods of time, though some have eventually won. And I liked the story of the guy who was paying his employees with US circulated $50 coins made out of gold, which are actually worth $800 each or something. He filed his taxes like he had only paid them $50, since that is what the value of the coin is. The IRS sued him and lost.

It makes for a nice story, but I don't think it is all that great for the employees, unless there is some way for them to get out of the taxes from selling their profit on the gold.

Comment #1867

2009-03-22T08:17:48Z

Looks like in four years the IRS will celebrate its centennial. It makes me wonder, though, what caused the apparent need for an income tax.

How are tax rates changed in the US? Are they voted upon?

Comment #1866

2009-03-21T23:39:38Z

I hadn't realized that income taxes were that new.

Comment #1865

2009-03-21T22:43:39Z

Stephan: So did the US as little as 100 years ago.

Comment #1864

2009-03-21T21:34:42Z

If you can still go to your good doctor and dentist, by all means. That's good news, as long as you're going to have to pay all those taxes anyway. If they forced you to go to a different doctor, that might require more thought, as a good relationship with one's doctor (and dentist) is worth a lot.

Comment #1863

2009-03-21T20:51:56Z

And NH, DE and Oregon, presumably among others... Pennsylvania though is not the place to be - we like our taxes, and think there should be more. And so I decided that we might as well take advantage of all of our taxes, particularly after I found out Pittsburgh had all those other taxes I didn't know about, and had to waste all that time calculating back taxes and penalties, etc. that we should get some cheaper healthcare for the kids, and just today we got the notification that we got free health care for the kids, can use our same doctor, and can go to the dentist we really like as well.

So, I say, as long as we live in a big government state (and country), we might as well get them to pay for stuff.

Comment #1862

2009-03-21T20:51:13Z

So does Florida. :)

Comment #1861

2009-03-21T20:29:40Z

On the no income tax idea Andorra agrees with you, Phil.

Comment #1860

2009-03-21T15:17:52Z

I consider my employer's contribution to be part of my tax rate. They'd pay it to me to bid for my services if they didn't have to pay it to the feds.

I don't like the flat income tax idea either. I like the no income tax idea.

Comment #1859

2009-03-21T15:12:19Z

Most people don't consider the 7% their employer pays for Social Security/Medicare as part of their tax rate - so from that perspective they think they are paying a lower rate.

The less money you make the more the 14% SS tax as a self employed person comes in to play as a percentage of the taxes you pay. This can make your tax rate look higher. This is another reason I don't like the flat tax idea -- we already have one in the SS tax, and it is pretty onerous the less money you make.