Wednesday, April 14, 2010

Taxing Situation

My wife is ticked off. She finished preparing her taxes and I haven’t. Our dining room table has been covered with my papers for weeks. The printing calculator sits in the midst of slips and invoices for deductible things I paid for in 2009 and I’ve been working on it all when I can find a few hours between jobs. I’ve always hated paperwork, but it’s particularly hard to motivate myself with government paperwork. She did all that for her private counseling practice weeks ago, but I’m still at it for my writing and property-management business and she can’t file until I’m ready.

“Make sure you tell the accountant it’s your fault and not mine,” she said. I filed for an extension and wrote checks for the amount we paid last year - about $11,000 for state and and federal taxes. That’s in addition to what is taken out of my teacher salary for which I claim zero deductions - and I have them take out an additional $150 per pay period. The tax code is much too complicated to figure out, so we pay $3-4 hundred each year to have a CPA do help us with it. Sometime over the next six months, we’ll sit down with her and hope she can show us ways to avoid paying so much.

Half of all Americans, however, do not go through this because they pay no federal income tax. And, according to Derek Thompson at The Atlantic, because of college tuition credits, child credits, and something called the “Earned Income Tax Credit,” rather than write a check to the government, government writes them a check! These are not refunds I’m talking about here. They get more back from the government than was ever deducted from their paychecks - assuming they actually work. They don’t dread April 15th like I do. They look forward to it because it’s a payday. This time every year, money goes out of my account and into theirs.

During the first few years of my 35-year teaching career, government had me under the poverty line because I made less than $10,000 per year with a wife and four children. I cut firewood. We grew a garden, raised animals, drove clunkers, shopped at Goodwill, and ate a lot of soup. We got by and we even look back on those times as among our happiest. The kids are grown now and my wife works. I’m still a teacher but with a little business on the side, so now we’re “rich.” The left moans that “The rich get richer and the poor get poorer,” but I don’t think that’s necessarily the case. Maybe it’s time to coin another phrase, such as “The ‘poor’ are getting richer while the ‘rich’ are getting poorer” because of the confiscatory power of government.
The Earned Income Tax Credit alone costs $50 billion a year. For months, I’ve been hearing radio ads in which a Spanish-accented woman tells us how fulfilling it is to work for the United Way telling more and more people about the EITC so they can get money from government too. In his latest column, Mark Steyn cited Congressman Paul Ryan’s claim that 20% of US households get about 75% or their income from the federal government. Another 20% get 40% of their income from federal programs. That’s four out of ten households. Throw in another 11% who are guilt-ridden, trust-funded, limousine liberals and you have a solid voting majority in any national election.

To keep this gravy train on the tracks, government goes further into debt by $1.5 trillion each year. We’re $12 trillion in the hole now, but with Obamacare, we’re frantically digging deeper. The McClatchey Newspapers write that since it passed, “Questions . . . have flooded insurance companies, doctors' offices, human resources departments and business groups. ‘They're saying, “Where do we get the free Obama care, and how do I sign up for that?” ’ said Carrie McLean, a licensed agent for”

During the week before election day in 2008, a supporter at one of Obama’s rallies named Peggy Joseph said, “[When he’s elected] I won’t have to worry about putting gas in my car. I won’t have to worry about paying my mortgage.”
The top 25% of earners pay 85% of federal income taxes, while the bottom 50% pay only 3% - and that’s after those tax cuts for the “rich” they whine about so much. No wonder they vote for Democrats.

Next on the Democrat agenda is amnesty for about 20 million illegal aliens. That will make voters who don’t pay income tax an even more solid majority. Mark Steyn asks: “If 51 percent can vote themselves government lollipops from the other 49 percent, soon 60 percent will be shaking down the remaining 40 percent, and then 70 percent will be sticking it to the remaining 30 percent. How low can it go?”

Good question.


Anonymous said...

Right on as usual, Tom. I hope this country is beginning to wake up!

Harvey in North Baldwin

Anonymous said...

Thank you, Mr. McLaughlin, for reminding us of the grim facts of life under the socialists. There is hope, as you and others like you, give us insights and an education so we can vote and act with our eyes wide open.

Anonymous said...

Some might call your reasoning an over simplification, but I think you're absolutely right. I do not pay much income tax at all, not because I am subsidized by the government, but because my late husband fought for his country and I am the recipient of a V.A. pension, which AS YET, is not taxed. If it ever is, then I shall be among the elderly trying to live on Social Security until that runs out too...for heaven's sake people, wake up and vote to rid this country of creeping Socialism.

Anonymous said...

Great Article. I like "the poor getting richer and the rich getting poorer." How true.

Anonymous said...

Anon said: "I like "the poor getting richer and the rich getting poorer." How true."

How true?!?! I guess people will believe what they want to believe, truth be damned. I hate to burst the bubble on your la-la land, but here is a look at reality:

An analysis of Internal Revenue Service data shows that over the last two decades, the wealthiest households in America experienced exploding income even as their tax burdens fell dramatically.

IN 1985, THE FORBES 400 were worth $221 billion combined. Today, they’re worth $1.13 trillion—more than the GDP of Canada.

THERE’VE BEEN FEW new additions to the Forbes 400. The median household income has also stagnated—at around $44,000.

Take a lok at the data. The results are striking. The vast majority of income increases has accrued to the top 20% and especially the top 5%. Here are some of the numbers, adjusted into 2001 dollars. (Note that this is an "apples to apples" analysis that is adjusted for inflation.)

Bottom 20%
• 1975 household income: $12,664
• 2001 household income: $14,021
• increase: $1,357
• percentage increase from 1975: 10.7%

Middle 20% (a.k.a. "the middle class")
• 1975 household income: $39,807
• 2001 household income: $51,538
• increase: $11,731
• percentage increase from 1975: 29.4%

Top 20%
• 1975 household income: $91,848
• 2001 household income: $159,644
• increase: $67,796
• percentage increase from 1975: 73.8%

Top 5% (a.k.a. "the wealthy")
• 1975: $134,735
• 2001: $280,312
• increase: $145,577
• percentage increase from 1975: 108%


Anonymous said...

"I’ve been hearing radio ads in which a Spanish-accented woman ..."

What on earth does her accent have to do with it?

Anonymous said...

anonymous would like to wonder about your data. I wonder how many of the "top 5%" have ties to our goverment? while the median (44,000 per yr) FUND IT?

pinko said...

Tell us, Educator McLaughlin - how much did Exxon/Mobil pay in US income taxes this year?

Anonymous said...

What do you mean I would like to "wonder about your data"? I was disputing the moronic statement that “The ‘poor’ are getting richer while the ‘rich’ are getting poorer” for which Tom gave NO data to support. (because no such data exists)

I don't understand your point about the middle funding the top 5%. That seems to support what I am saying - the rich are getting richer and the poor are getting poorer. That is a fact. Pretending otherwise is being willfully ignorant. Tom seems to revel in his ignorance. He screams his ignorance in his column. Interesting though that he never defends his ignorance after it is consistently shot down by readers. He can't! Wow, did Tom get ripped apart in yesterday's Daily Sun concerning his ignorant take on Progressives. It was wonderful!

Anonymous said...

America is built on a system whose driving force is the profit motive. Our economy blatantly rewards greed. In classic economic theory greed is good. A person who is motivated by greed will create, as unintended byproducts, benefits for everyone, such as employment and the development of new goods and services. Let the rich get richer, the saying goes, and the benefits will "trickle down" to the rest of us. "A rising tide raises all boats." Under a pure capitalistic system the government keeps hands off and allows the market to decide how the money flows. The problem is, as we have found in the era of deregulation, the money flows to the top. Tampering with the market system to redistribute the wealth or assure that the poor are protected is labeled "socialism."
By these standards Jesus was a socialist.
Jesus spoke remarkably often about wealth and poverty. To the rich he said, "go, sell what you have, and give to the poor." When the rich turned away from him because they couldn't follow his command he observed, "it is easier for a camel to go through the eye of a needle than for a rich man to enter the kingdom of God."
For Jesus, helping the poor and the outcast is not optional: it is the essence of what it means to love God. We are to "forgive our debtors" and "give to every one who begs from you." But don't handouts contribute to moral decay? Jesus was more concerned about the moral decay in those who are so attached to their wealth that they would hoard it for themselves. In our better moments most of us recognize that giving does not corrupt. People who have been devastated by misfortune may need even more help because they may not have what it takes to recover on their own. Many of us will help a friend in hard times, even though we know we will never be repaid. It is when dealing distantly with people in the abstract that we fall back on the "moral decay" argument.
Greed may be a driving force for the economy, but Jesus saw it is as destructive to community. Greed may leave a few crumbs behind for the poor, and it may do some unintended good, but it destroys compassion. Compassion is in short supply in our society today where workers are being downsized in the name of efficiency, and the middle class is abandoned by the rich to fight it out with the poor for the table scraps.
Jesus' response to economic inequality is very direct: we are to share the wealth. I once heard a talk about world hunger. The point was that we produce far more food than is needed to feed everyone on earth. The problem is not lack of supply; it is maldistribution. Is concern for the poor to be simply a private matter to be handled by charity, or does it have anything to do with politics or government? The Bible calls upon the rulers to create a just society. We have inherited a system that works efficiently to produce tremendous wealth, but fails to distribute that wealth equitably. It neglects the poor and it corrupts the rich. On both counts it destroys community. A decent life for all is a matter of simple justice, not charity!

Jim said...

To the previous Anonymous, what did Jesus say about stealing? If recall correctly it was something along the lines of, "Thou shalt not steal."

All you did here was cut and paste an article written by David Chandler, and passed it off as your own. You stole his work. You're not the first of Tom's detractors to plagiarize, and likely not the last.

Anonymous said...

What does stealing have to do with Chandler's piece?

Anonymous said...

Why does Jim assume that David Chandler did not post the piece?

Anonymous said...

If you cannot debate the facts then argue about who stated the facts, huh?

Jim said...

The article you plagiarized from David Chandler is his opinion. When David wrote, "Jesus was a socialist" that is his opinion. If he said things like Jesus was a man, or Jesus lived 2000 years ago, those would be facts.

Debating you would likely prove unproductive for two reasons. First, you lack personal integrity as evidenced by your theft of Mr. Chandler's work. Second, you seem unable to distinguish the difference between facts and opinions.

Jim said...

Also, there is no debate about who stated the [opinion]. We know it was David Chandler in his article, "Biblical Basis for Liberal Politics." A collection of his works can be found here...

One of David's more interesting articles is about how 9/11 was an inside job.

Anonymous said...

I really hate to repeat myself but since the Anon who wrote this:

By these standards Jesus was a socialist. Jesus spoke remarkably often about wealth and poverty. To the rich he said, "go, sell what you have, and give to the poor." When the rich turned away from him because they couldn't follow his command he observed, "it is easier for a camel to go through the eye of a needle than for a rich man to enter the kingdom of God."

also wrote it on Tom's other article I'll respond here as well:

You are not only misquoting scripture you are misrepresenting it as well. Jesus was NOT a socialist nor was he concerned with politics AT ALL.

The scripture you are referring to is the one in which he addressed the Rich Young Ruler Matt 19:16.

If you read the whole conversation, you'd see that this man "claimed" he followed the whole 10 commandments. When Christ asked him to sell all he had, he was pointing out the contradiction in this young man. By walking away sadly the young man showed quite clearly he was breaking the commandments he just claimed he had kept since his youth like "Have no other god before me." "Do not covet" "Love your neighbor as yourself."

But most of all he was trying to be self justified "what must "I" do that "I" might be saved?" was his question. We can't save ourselves. Only Christ saves. He didn't understand that. He, most likely, was used to buying himself anything he wanted. Maybe he felt that way about the afterlife as well. It can't be bought.

It has NOTHING to do with telling the man to become a socialist. There were many rich believers in Scripture who were strong men of God and they did NOT give all they had to the poor nor were they ever asked to. Abraham, David, Moses and Job to mention a few.

Later Paul wrote "if you do not work, you do not eat."

Socialism is NOT scriptural. In fact capitolism makes a strong case in scripture. You may want to read the book of Ruth (4 chapters) to see how God's welfare system worked.

DAWN said...

oops! That was me leaving the last comment. I AM NOT an Anon!

gaffer said...

The number of wagon riders continue to increase and there are fewer and fewer people pulling the wagon now. Soon it will stop an then what happens to those who have been riding all these years and forgetting how to pull.

I really think that it would do so much good for this nation for the wagon to cease moving. The result would be a lot fewer wagon riders and that would be a good thing.

Anonymous said...

"Tampering with the market system to redistribute the wealth or assure that the poor are protected is labeled "socialism."
By these standards Jesus was a socialist."

Sorry, Jim....that is a FACT.

Were Jesus around today right-wingers would vilify the man. They would hate the long haired socialist! There are TONS of his quotes that would lead one to the conclusion that Jesus would support socialism today. What quotes are there that support the notion that he would be a capitalist?

Anonymous said...

Yeah, Tom, I'm with you. Those lazy people that don't make much money should pay MORE taxes! Why punish Wall-Streeters and corporate big-wigs? They have successfully managed to work the capitalist system to their advantage , so good for them! Who cares that under Obama federal income taxes have lowered for 98 percent of all working families and individuals, (according the Citizens for Tax Justice, a nonpartisan think tank.), what about the richest 2%??!!??

Everybody, let's rally for the billionaires who are getting screwed! Take to the streets! Buy teabags!!!!!

Keep up the patriotic whining about unfair taxes!!!!

Anthony Tiani said...

Tom, what I can't reconcile from your article isn't that taxes are high for many, or that much our our money is wasted, but that you glare over the biggest thieves of all: the top 1%.

You want to pick on all poor and jobless Americans for the supposed sloth you assume they have. Yet you constantly ignore the rampant pillaging from Wall Street we all endure.

Is it because you don't want to make the holy, anointed free-market capitalism look imperfect?

Thomas said...

You know, I do remember a time, in the 50s, when I was a young child, when we had a conservative Republican president, a highest tax bracket of something like 70%, strong unions, a solid middle class, an upwardly mobile working class, high corporate profits, and everything worked.

Until Ronald Reagan. He was the smoothest, most successful con man of the 20th century, and I say that with some real admiration. He convinced the working classes that they were better off with lower wages, or none at all. That’s a remarkable accomplishment.

But, like most fantasies, it doesn’t work in the real world. It was never sustainable. 30 years into Reagans low tax/ low wages/castrated unions/ staggeringly high corporate profits capitalist paradise, and what do we have—nothing works. Regan’s reverse Robin Hood—the massive transfer of wealth from the lower to upper classes—could be sustained, as it is in some “socialist” countries, by higher taxes on the rich. Those are then re distributed to the lower classes in the form of social welfare programs. Of course, it would be simpler just to pay them an adequate wage to begin with, but that idea is even more un American than taxing the rich.