We just finished e-filing our federal taxes for the year, and are now experiencing that indefinable afterglow which is usually felt only by men who dropped their soap in a prison shower. Which we hope won't be our own fate after an audit since we don't actually have much confidence that our tax preparation software is more accurate than feeding our receipts into a meat grinder.
As usual, we found ourselves in the rarified ranks of those who actually have to pay an assload of taxes, which is surprising since our actual income is, as Hillary would say, deplorable.
Not that we're poor, mind you. We've spent a lifetime being thrifty and depositing money into a retirement account which has ripened appreciably over time. But this particular set of circumstances leads to some genuinely weird outcomes at tax time - especially since we took a substantial chunk of money out of the stock market last year to pay for our home remodeling. Oops!
Magically, this single transaction transformed us from being potential food stamp recipients to being members of the most despised group on Earth: the evil rich.
Which brings us to some amusing financial trivia about an average American family we'll call "the Jarlsbergs"...
• Our combined household income (not including the stock sale) from a small business and a pension was actually less than we were required to pay for health insurance last year - even with one person on Medicare!
• After the withdrawal, upon which we had to pay very substantial capital gains taxes, we were also informed that as wealthy bastards we didn't deserve the Obamacare subsidy we'd received last year, so we had to cough up an additional $3500 in taxes to reimburse the government for services we'd never used.
• Based on that same determination, the cost of our Medicare plans went up too. Which came as something as a surprise, since we'd always thought Medicare was sort of a 100% paid for service once one reaches their arthritic golden years. Or at least something for which everyone would pay the same. Ha, ha! The joke's on us!
• Owing to our status as stinking wealth-mongers, we were given zero credit for our charitable donations last year, which included a significant amount of cash and several rooms of furniture. Of course, we didn't make the donations to get tax deductions. We made them to try to buy our way into Heaven.
• Finally, our actual outgoing tax payment to the government was approximately 2500% more than our entire net business earnings for 2017. Yeah, that bolsters the old entrepreneurial spirit!
Of course, our glass is still more than half full; we only owed all those taxes because our stocks grew like Jack's beanstalk on steroids. But we still hate sending our money to a bureaucracy which will only waste it.
On that note, the 1040 form asks us if we'd like to donate $3 to the Presidential Election Fund and gives us only the options of "yes" or "no." We would strongly suggest that next year they add a box saying "Oh, HELL no." It would be the only part of the form we'd actually enjoy filling out.
There Ain't No Justice!
ReplyDeleteHoly Good Night Batman!
ReplyDeleteStiltonian, why no deduction for the charitable gifts?
Also, love the graphic. Our Federal government, and all governments for that matter, continue to be the insatiable beast.
I always say "@#$% NO!" under my breath when I click that box. My breath must be loud though, as everyone in the house asks "What?!" This year, I said "@#$% NO, I ALREADY DONATE ENOUGH TO THE @#$%ing GOVERNMENT!" to save teh extra effort of having to explain myself.
ReplyDelete@Mike aka Proof- Not when the whole tax burden is shouldered by only a few.
ReplyDelete@Bill from Wood-Ridge- As I understand it (meaning I'm probably wrong), the charitable deductions didn't register because they'd have to be more than a certain percentage of my newly inflated "income" following the stock sale. Turbotax explained it at the time, but by then I was a beaten man and so just glossed over the details of my personal gang bang.
@Emmentaler "The Downtrodden Mass" Limburger- Seriously, what the hell is up with the $3 donation box? Is the idea that we'll get better candidates if federal funds are sent to Hillary, Bernie Sanders, or anyone else who wants a shot at the brass ring? I didn't notice any particular lack of funding in the last race. Here's a better idea: check a $3 box that enters you into a mega-lotto drawing. At least you could have a spark of hope when you sent off your taxes.
We have only ourselves to blame for re-electing the same NIMRODS who can't fathom how to BALANCE THE F!*&*KING BUDGET & who are suffering from TERMINAL CRANIORECTAL INVERSION!😟ðŸ˜
ReplyDeleteWell, come on @Stilton. We all know that the government is entitled to all your wealth because you didn't build that. Be grateful that you are allowed to keep at least some of it.
ReplyDeleteI'm a bit behind this year on completing the Econ household's taxes due to the surge in business I've been experiencing ever since the you didn't build that administration left the building. I don't expect any surprises as unpleasant as yours, but I do expect to be writing several sizable checks to various jurisdictions for the privilege of serving people's needs. Just another reminder of how much nicer living under the FairTax would be.
ObamaCare: The only people who love ObamaCare are those who get it for free, or those who get their health care somewhere else, and like it because they have nothing to do with it and are virtue signalling for those who get it for free.
MediCare: I truly do not understand the Medicare for All movement. As you point out, Medicare is awful. It's nothing like the "single payer" schemes like the British NHS that Progressives fawn over. It's hardly "all inclusive", not cheap, and nickel-and-dimes you at every turn. The average retiree should expect to pay nearly a quarter-million in health care costs after going on MediCare. The only people I know who are thrilled with MediCare are people who have no savings what-so-ever, so they effectively get everything for free just like they did on welfare. Otherwise, it's just more "War on the Middle Class"(r).
The only reason the "Medicare for All" nonsense has any traction at all, is because it's largely sold by people like Bernie Sanders (who doesn't have to worry about paying for his health care or finding providers that will accept it) is selling it to clueless millennials who tune out when they visit their grandparents. They are in for a rude awakening at some point.
The "Presidential Election Fund": I always say "no". I'd be happy to let the Russians pick up the tab for that.
My solution to the tax code: I propose that all congresspeople should be made to complete their own tax returns (without outside help) for all to see in the Capitol Rotunda. There would be no food, drink or bathroom breaks until completed. This would achieve two things; A much simplified tax code, and perhaps a better quality of congressperson.
Yea, the annual rectal reaming cost our two person family. But, since me son looked at our taxes, I feel confident we will slide under the audit gate again. On pulling money from savings, in our case 2 401Ks that we have required distribution. That is what we are paying taxes on. That is a gripe with me since we really do not need a distribution and I had rather it grow.
ReplyDeleteNow, the new book by Peter Schweizer is getting some traction but nothing will be done about it. This is why both Rs and Ds are going after President Trump hammer and tong because no one has hooks in him and his draining the swamp is about this. McConnell is is at the top of the list. If he would appoint a couple of investigation into the past administration and Clinton, he would have no problem with the Nov elections or being reelected. They are trying to get him out before he does this. Mueller will continue his witch hunt these last three years. He has no choice now.
@Stilton,
ReplyDeleteWell! I used to like you, but now that I found out you're one of those greedy rich bastards, up yours!
But seriously, seems like you just had enough "up yours" to last a lifetime. Dropping the soap in the prison shower might be a pleasant experience compared to the corn-holing the IRS has given to you. "Oh, so you pulled some of your own damn money out of your own damn saving account to fix up your own damn house?! BWAAHAAHAAHAAA!! Fork over a-hole!"
I guess I'm very fortunate. I'm not self employed and have three grandkids (aka tax deductions) living with me, so we actually got a nice chunk of our money back.
Congratulations to the Jarlsberg Family on your thriftiness and your investment discipline. Long-term gains are part of the "game." Keep up the good work, and don't let the tax tail wag the investment dog. Presumably, the tax on gains is lower than the tax on income, so you've got that going for you, which is nice.
ReplyDelete--Your Friendly Investment Manager
Meanwhile, America's experts at "income inequality" are diligently working on the problem:
ReplyDeleteSanders, Warren, Moore Headline National Town Hall on Inequality and Oligarchy
Because if anybody in America knows how to fix inequality in America, it would be Bernie Sanders, Michael Moore & Elizabeth Warren. Considering that collectively they own at least a dozen homes, it's no wonder that pretty much all of America must look impoverished to them.
And yet, for some reason their only solution will involve @Stilton paying even more in taxes than he already does. Strange about that.
@Stilton -- The mega-lotto idea is an excellent one. Provisos: Only those who actually pay Federal Income Tax should have the check-off and the winnings should be tax-free. The winner should also be allowed to take the money in the form of Scrooge McDuck's Money Bin.
ReplyDelete@John the Econ -- I really like your Congresscritters doing their taxes, personally and without help or breaks, in the rotunda idea. That has my vote.
The Government giveth. The Government taketh away. Dem Blessed SOB's are de Government. (Apologies to Pogo.)
ReplyDeleteJohn the Econ - I like the idea of a 'fair tax', especially as it picks up those who live strictly cash basis. I am always confused by the 'pre-bate' business - most states already don't have a sales tax on 'necessities', so would not just excluding that be sufficient?
ReplyDeleteIn any event, an honest flat tax would also a significant improvement... which is precisely why, of course, it will never happen. Congrassteroids get too much power and profit from providing tax loopholes...
SPIT
As to the $3 donation lottery, ok, sure, the pres campaigns get fed funding, but the winner of the lottery gets to remove one politician from public life.
Permanently.
Duck-Duck-Douche style, you're DONE, good DAY sir (President, already being term limited, to be exempt)
Just think, every year ONE of those decrepit efffks being forced to resign.
A guy can dream, no?
@Dr. Roger Harris- I agree, although I'll point out that these politicians have done a pretty good job of promising they WOULD balance the budget if given a chance, but it turns out (surprise!) they were all lying.
ReplyDelete@John the Econ- I have to admit that as a self-employed writer who works at home, I was particularly annoyed by the "you didn't build that" accusation. My income came from the desk I'm sitting at right now, and there was no one else in the room.
Obamacare: the prices are now insane, but many people don't complain because of the subsidies. Paying the full amount - which many in the middle class have to do - is painful and wildly more expensive than before the "Affordable Care Act."
Medicare: I'm learning about it. Some years ago, my wife and I were covered by a single family policy. Now we each have a Medicare policy, a Medicare B policy (which you pay for), a paid Medicare G policy to cover the many things not covered by Medicare A or B (but still no dental or vision), and a paid Medicare drug policy. I think mine is $40 a month, and has no noticeable effect on the price of my prescriptions. but without it I'd be on the hook if I ever need chemo. It all adds up to a fair amount of money and 8 different policies to be juggled for two people. Crazy.
And I LOVE the idea of making those in congress figure out their own taxes...with heavy penalties for errors.
@James Daily- Turbotax thinks I'm at very low risk of an audit because A) I entered scads of detailed records to account for my hilariously small business income, and B) 99% of my "earnings" came from that one stock sale which the government has documented, and they've taxed me up the wazoo already.
@Colby Muenster- Just to be clear, I didn't take my money out of a savings account. I took it out of a private investment account which was NOT an IRA or other tax favored retirement vehicle. So I was paying capital gains taxes on the appreciation of my investments, which has been dramatic. I'll also note that if the Trump tax cuts were in place for 2017 returns, it would have cut my final bill substantially.
@Steve Nichols, CFA- Thanks for the attaboy! Yes, my capital gains taxes are significantly lower than would be the case with regular earned income. It's like the canard about Warren Buffet paying a lower tax rate than his secretary does, when in reality Buffet and his secretary would pay exactly the same rate on investment returns.
Plus, there's a reason that capital gains taxes are lower than regular income tax (as you know very well) - it's to encourage people with disposable income to put their personal wealth at risk by investing in stocks (aka The American Economy). I hate it when capital gains tax rates are just presented as a gift to the rich.
@John the Econ- I was soooooo tempted to go with that triad of idiots for today's post. Talk about your low-hanging fruitcakes!
@Dan- You've definitely improved my lotto idea! We need to tweet this to Trump ASAP.
@Robert Tatro- I don't recall receiving doodly squat in the government's "giveth" column in a long, long time. I'll note that Mrs. J doesn't receive Social Security (she was a local government employee and receives a small pension from the City of Dallas) and I'm not collecting Social Security yet because I'm too dang stubborn.
@Pete (Detroit)- I wish we DID have a "fair tax." And the reason we don't is, as you point out, that every convolution of the tax code represents some sort of power play or backdoor deal for those making the laws. Without being able to do that, they'd just have to be public servants...and where's the fun in that?
And nice improvement on the lottery idea! Imagine winning a couple hundred million bucks and being able to tell Hillary to get the hell off the stage!
If we had a Fair Tax, how on earth would the gummint uplift the poor? (Not that the current Unfair Tax has been particularly instrumental in doing any of that - but, still!)
ReplyDelete@Pete (Detroit) & @Emmentaler "Aghastly" Limburger: The "pre-bate" is probably the messiest and problematic aspect of the FairTax. Basically, it's a "payoff" to get the buy-in of the low-income and welfare set. Basically, it's saying that in exchange for raising the price of everything you need to just survive, we're going to kick back to you enough money to make up for the difference. The flaw with this is obvious; the never-ending political pressure to ratchet up and tweak the pre-bate as to who gets how much. Within a decade, filing for your pre-bate would probably be as complex as your tax return is today, and just as loaded with fraud.
ReplyDelete@Stilton, I don't think "annoyed" captures what we felt. think all working Americans should have been offended by Obama's "You didn't build that" quip. But as people like ourselves who are "self employed" and those who built and own their own businesses and either eat or starve based upon our personal efforts, I think it hit with an especially bitter and offensive tone.
First of all, what the f*** does a "community organizer" from ultra-insular elite academia know about people who actually build things? I think that he honestly believes it because that was his personal experience in life. He was America's first true "affirmative action" President; pampered and coddled by the establishment for most of his life. We know that absolutely none of his educational or professional work product was the least bit exceptional, because if it was it would have been the front page of every Progressive newspaper and magazine in the nation. (The only thing we did know that he actually built was a $100,000 gazebo) Instead, everything he ever did was buried and kept more secure than the supposed aliens at Area 51. And yet he was always told he was brilliant, and he clearly believed it. So when he looks at how comparatively easy his trip to the top was and looks across the land at other successful people, it's obvious to him that they must have had it even easier than he did.
Only that level of delusion could make someone say such an arrogant thing.
Second, he's arguing that the people he says "didn't build that" need to be made to pay for people like himself who never really built anything. This is the point where I educate any socialist dumb enough to sputter this kind of nonsense in my presence that they should be praying that I don't join them; If I'm not going to be entitled to the fruits of my own labor, I'm certainly not going to work the same for everyone else. Their problem isn't that we disagree; their problem is going to be when I join them!
Sorry, but that whole thing really gets under my skin.
MediCare: My first encounter with MediCare came early a decade and change ago when I had to help my parents figure out the best options for their situation. All I could think was that if a table of college educated professionals can't make sense of this, what chance does the "average" American have?
If Bernie's kids think health insurance is expensive, complex and confusing now, they're gonna all be road kill under "MediCare for All".
Apropos?
ReplyDeleteI just don't know
But Stilton does live in Texas
https://youtu.be/yYPDCGzrioU
As a Texan expat (gimme ah hunnert of dem thangs) I can say Texas is way kinder to it's citizens than Noo York or Calimexifornia, as Stilton so accurately portrays in his pic...it's the Federal gubmint who needs our sweat and blood for pensions, nespotic salaries for the kids (and dog) of the Senators and their endless perky med care, etc.
ReplyDeleteIf I had their med care I'd be playing pro ball instead of limping around and being a creaky oldster.
I am on Medicare with Medicaid backing it up (part B) and I notice how uninspired the Docs are dealing with any cases dealing with Medicaid...as one hospital worker told me "Medicaid, we lose money, Medicare - we break even."
I am wincing at the taxes the workers pay who support almost all of us...isn't that why the Bolsheviks had a revolution?
Seems to be a punishable offense to make some get-ahead money...
@Emmentaler "Aghastly" Limburger- If there's a government program that's actually uplifted the poor, I must have missed it. Government may feed them, house them, and give them enough medical care to vote again...but uplifting? Not so much. That would take a real commitment to real education, and a renewal of family and community values (which would best be accomplished by the government butting out).
ReplyDelete@John the Econ- I'm not that familiar with the "pre-bate," but it isn't hard to see the pitfalls. As you say, the system would be just as screwed up in short order, albeit with a huge shift to an underground barter sub-economy.
Re: "You didn't build that," I was indeed understating my umbrage with the use of the word "annoyed." My actual reaction, of which I'm not particularly proud, was more along the lines of a shouted "F you, you effing Kenyan bastard!" I'm guessing that my NSA surveillance tapes must make for pretty amusing listening.
Re: Medicare, sitting only a few feet from me is the book "Medicare for Dummies." Considering that the program is designed for older Americans, it seems particularly cruel to make it so baffling and broken into so many parts. Do I really want to have to "shop" for multiple baffling supplemental plans every 12 months?
@Geoff King- Yup, apropos as all get out. That being said, I think the "red state" group sang and danced better than the "blue state" group. But was it really fair to dress the "red states" as the obnoxiously wealthy? I think not.
@Gee M- You won't catch me bad mouthing Texas. I love laughing at the end of the Turbotax program when it says "now let's do your state taxes." Well, I don't have any. Of course, the sales tax rate is a healthy 8.25%, which certainly adds up.
And I agree that the government seems generally opposed to those who are self-employed or get their hands on enough wealth to not be dependent on the state. They hate that.
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ReplyDelete(deleted prior version to correct typos)
ReplyDeleteI dislike any tax system that requires math and paperwork on the part of the average citizen, especially if it allows anyone to avoid paying (No Representation Without Taxation!). Give me a national sales tax on all retail sales to end-users, including "necessities", and I'm good. Cap it at 5% and couple it with a balanced budget amendment. Get rid of all other Federal taxes.
Maybe a reciprocal tariff to match the tariffs imposed on U.S. exports to whatever countries want to send their stuff here.
Hey...I worked up a little incantation, maybe it'll help!
ReplyDeleteO Ye Government Fiends and Demons of IRS...
NOW HEAR ME!
By the Hoary Hosts of Hogarth
By the Disney pachyderms of Pink!
By all that reduces portfolio worth
and reduceth my supply of drink...
Do trouble me no more this day
and begone within the hour!
Lest I call Dr.Ugo in sunny Eff-el-a
and avail of his awesome spell power!
Hey...like Chicken Soup at a funeral, or Hillary on Benghazi...at this point, what does it matter?