America's tax system is screwy

Discussion in 'Budget & Taxes' started by Smartmouthwoman, Jan 13, 2012.

  1. Smartmouthwoman

    Smartmouthwoman Bless your heart Past Donor

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    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?

    [​IMG]
     
  2. Kimi

    Kimi Well-Known Member

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    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!
     
  3. Smartmouthwoman

    Smartmouthwoman Bless your heart Past Donor

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    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.
     
  4. Kimi

    Kimi Well-Known Member

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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.
     
  5. HonestJoe

    HonestJoe Well-Known Member Past Donor

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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.
     
  6. Smartmouthwoman

    Smartmouthwoman Bless your heart Past Donor

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    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.
     
  7. Beevee

    Beevee Well-Known Member Past Donor

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    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?
     
  8. Smartmouthwoman

    Smartmouthwoman Bless your heart Past Donor

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    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?
     
    Trinnity and (deleted member) like this.
  9. drj90210

    drj90210 Active Member

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    Yup. It's government insanity at its best.
     
  10. hiimjered

    hiimjered Well-Known Member Past Donor

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    The tax system is designed to make stupid people feel that they are paying taxes when they aren't and to make it look like the politicians are sticking it to the rich. Once you consider all of the deductions, credits and loopholes, the reality of the tax breakdown is far different than people tend to believe.
     
  11. ptif219

    ptif219 Well-Known Member

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    Last year I made less than $30,000 and got a return of $5,000. I expect this year will be the same. I pay $150 for my taxes to be done. If the government says I am allowed this I will take it.
     
  12. Smartmouthwoman

    Smartmouthwoman Bless your heart Past Donor

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    I did my friend's taxes on TurboTax... for free, including electronic filing. Another perk of not making much money.
     
  13. Kramer

    Kramer Member

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    No it does not seem strange at all. The funds are meant to stave off poverty, create jobs and reduce welfare. These funds ultimately stimulate the economy.
     
  14. megatron

    megatron New Member

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    Don't forget the part where millionaires pay less taxes than a guy making 45g's a year.............just wait it will trickle down......lol
     
  15. hiimjered

    hiimjered Well-Known Member Past Donor

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    Except that has been shown to be untrue.
     
  16. megatron

    megatron New Member

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    where..............
     
  17. hiimjered

    hiimjered Well-Known Member Past Donor

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  18. megatron

    megatron New Member

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  19. hiimjered

    hiimjered Well-Known Member Past Donor

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    Don't get me wrong, our system is a farce. People keep pushing to increase the top bracket, believing that the rich will pay more, but that just drives them to find more credits or deductions. People believe that they pay taxes, but they get all or more than all of it returned at the end of the year.

    I'm a fan of eliminating all government attempts at social engineering through taxes. Set a simple flat or two-bracket system with no deductions, credits or exemptions. Simplify the system, make it clear exactly how much people pay, eliminate all loopholes and make it fair.

    This pretend progressive system is just a political joke and a chance for politicians to deceive the foolish and ignorant masses.
     
  20. Smartmouthwoman

    Smartmouthwoman Bless your heart Past Donor

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    It's even worse than deceiving... it's like paying hush money. Warren Buffet may make noise about needing to pay more in taxes, but you can rest assured tax reform won't be on my friend's political agenda.

    "Shhhhh, take this little bit of money and hushup, po' boy. Big Brother knows what's best for ya!"
     
  21. Kramer

    Kramer Member

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    I hardly think that what the message is. If that is how your friend wishes to interpret it then he is doing himself a disservice.
     
  22. Message to Garcia

    Message to Garcia New Member

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    The real problem with taxes are the true conservatives want to close the tax loopholes that allow millionaires to escape taxes. The left simply wants to raise the taxes and leave the loopholes open. Why do you think Warren Buffet supports Obama?

    If you have the money, you can afford the lobbyists and accountants with tricks. If you close the loopholes, lobbyists, and savvy accountants are aren't very useful as far as tax evasion is concerned.

    The true conservatives also want to stop your above grievance.
     
  23. Message to Garcia

    Message to Garcia New Member

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    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.
     
  24. Smartmouthwoman

    Smartmouthwoman Bless your heart Past Donor

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    It's how I interpret it. Being rich OR poor shouldn't be an excuse to get out of paying your fair share of income taxes.
     
  25. Kramer

    Kramer Member

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    In graduated tax system there are many provisions which apply to various circumstances and income levels. That in addition to my previous post as to reasoning for your friend's "windfall" is sound fiscal administration.
     

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