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Thread: America's tax system is screwy

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  1. #1

    Icon19 America's tax system is screwy

    It's no wonder we've reached a point where we need to throw out the entire system and put another one in place. Here's an example of why we're going broke and it has absolutely nothing to do with not taxing the wealthy enough.

    Today's my day off and a friend asked me to help him file his taxes. Figured it would be a piece of cake because he really didn't work much in 2011 since his small employer was struggling to survive and cut everybody back to part time.

    My friend said he just wanted to get an idea whether there was any reason to file early or, if he was just gonna break even... to wait and file in April.

    Here's his stats: He earned $8,769.75 and paid in $743.39 in federal tax, $368.33 in SS tax and $127.16 in Medicare tax. No dependents, standard deduction.

    Thanks to an "Earned Income Credit" -- his tax refund will be $1117, $374 more than he paid in!

    My friend was just hoping to break even. I'm sure he'll be thrilled. All I can say is WTF? No wonder we're going under... this makes NO sense. Our tax laws reward failure and punish success!! How crazy is that?


  2. Default

    Yeah, it's all screwy. We've pretty much been punished for being married, ending up owing at the end of the year, when we each got refunds before we married. Then, I hear stories like this one that you posted.....grrrrr....I mean good for your friend!


    "A little neglect breeds mischief:
    for want of a nail, the shoe was lost;
    for want of a shoe, the horse was lost;
    for want of a horse, the rider was lost".....Benjamin Franklin

  3. #3

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    Quote Originally Posted by Kimi View Post
    Yeah, it's all screwy. We've pretty much been punished for being married, ending up owing at the end of the year, when we each got refunds before we married. Then, I hear stories like this one that you posted.....grrrrr....I mean good for your friend!
    It's maddening isn't it? Why on earth are we giving single people with no dependents an extra $374 AND refunding every dime they paid in during the year?

    My friend survives by living with family and helping them out when he can... just like folks have done since the beginning of time. But I know he didn't expect to get a reward from Uncle Sam.

    It just makes NO sense.

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    It's very maddening, especially for those of us who do live paycheck to paycheck. I've had more withholding taken out, but that bites into monthly income. It really is all screwed up.


    "A little neglect breeds mischief:
    for want of a nail, the shoe was lost;
    for want of a shoe, the horse was lost;
    for want of a horse, the rider was lost".....Benjamin Franklin

  5. Default

    Quote Originally Posted by Smartmouthwoman View Post
    It's maddening isn't it? Why on earth are we giving single people with no dependents an extra $374 AND refunding every dime they paid in during the year?

    My friend survives by living with family and helping them out when he can... just like folks have done since the beginning of time. But I know he didn't expect to get a reward from Uncle Sam.

    It just makes NO sense.
    To his credit, you only get the refund if you work and make above around a certain amount. ~$12,000 I think. It's less than the relative poverty level, but above the absolute poverty level.
    Americans donate near $300,000,000,000.00 a year to charity. How does your country compare?

    "I do think the Saudi king is a great man.. In fact the Saudi leadership over the past 70 years is pretty remarkable." - Margot

    http://www.politicalforum.com/latest...-arabia-2.html

  6. Default

    Quote Originally Posted by Smartmouthwoman View Post
    It's maddening isn't it? Why on earth are we giving single people with no dependents an extra $374 AND refunding every dime they paid in during the year?
    Because his friend earned a trivial amount of taxable income last year. Remember; the standard deduction is $5800. He massively overpaid the government last year. That's why he's getting so much back. He paid way more than he should have.

    It just makes NO sense.
    People on the very low end of the income scale have enough troubles without tacking taxes on.

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    I don't see the major issue. The refund is less that the total taxes paid (about the same as the federal plus social security in fact).

    If his annual income was only around $8,000, I don't think he should be paying much, if any, taxation anyway. The breakdown (or how it is presented) is often unnecessarily complicated but the raw numbers on the bottom line seem reasonable to me.

  8. #8

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    Quote Originally Posted by HonestJoe View Post
    I don't see the major issue. The refund is less that the total taxes paid (about the same as the federal plus social security in fact).

    If his annual income was only around $8,000, I don't think he should be paying much, if any, taxation anyway. The breakdown (or how it is presented) is often unnecessarily complicated but the raw numbers on the bottom line seem reasonable to me.
    So you're saying my friend should get back the $$$ he paid into SS and Medicare because he didn't earn much money?

    Sorry, but that makes no sense. One of these days, he'll be looking to draw his SS and the $368.33 he paid in to SS in 2011 will be listed as part of his payments and included in the calculation of his monthly benefit.

    IOW, he paid into the program and the govt is refunding his money... from another fund. It's the ole hand is quicker than the eye routine.

    Bottom line... our govt is doling out hard-earned tax dollars to people who neither asked for, nor expect it. Like my friend. Will he take it and be dang glad to get it? Of course he will... who wouldn't???

    I'll be the first to admit this isn't a Barack Obama problem. It's a conglomoration of political wrangling that's gone on for years. Like the camel that's really a horse, designed by a group of politicians.

    Flat tax has gotta be a better way to go... this is stupid.

  9. #9

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    Quote Originally Posted by Smartmouthwoman View Post
    It's no wonder we've reached a point where we need to throw out the entire system and put another one in place. Here's an example of why we're going broke and it has absolutely nothing to do with not taxing the wealthy enough.

    Today's my day off and a friend asked me to help him file his taxes. Figured it would be a piece of cake because he really didn't work much in 2011 since his small employer was struggling to survive and cut everybody back to part time.

    My friend said he just wanted to get an idea whether there was any reason to file early or, if he was just gonna break even... to wait and file in April.

    Here's his stats: He earned $8,769.75 and paid in $743.39 in federal tax, $368.33 in SS tax and $127.16 in Medicare tax. No dependents, standard deduction.

    Thanks to an "Earned Income Credit" -- his tax refund will be $1117, $374 more than he paid in!

    My friend was just hoping to break even. I'm sure he'll be thrilled. All I can say is WTF? No wonder we're going under... this makes NO sense. Our tax laws reward failure and punish success!! How crazy is that?

    Is the failure that he has a job that does not pay sufficiently for his way of life, or that he might be paid more from taxation if he did not have a job at all?

  10. #10

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    Quote Originally Posted by Beevee View Post
    Is the failure that he has a job that does not pay sufficiently for his way of life, or that he might be paid more from taxation if he did not have a job at all?
    I'm not sure what you're asking. His 'way of life' has nothing to do with it -- it's the fact our govt doesn't expect him to pay ANYTHING because he doesn't make very much. In fact, they're giving him back $300 more than he actually paid in taxes!

    That doesn't seem strange to you?

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