How much will Torie pay in federal income taxes for the 2010 year?

[Grumpier Than Uncle Joe]

I misunderstood verin's point.......I thought he had bigger news to break.

[Brittain33]

? To illustrate the point I was chatting about in this prior post, that the "problem" with the US tax system vis a vis the size of our entitlement state, is that basically it is not so much "the rich" who are under-taxed, but the middle class, and in particular the comfortable middle class, making say from $85,000 to $200,000 per year.

So, since that is where the bulk of the posters here will end up I suspect, if you want an entitlement state the size that seems to be in the zone for a majority of voters (and one that I don't particularly oppose per se, although we waste a ton of money, and give a lot to the wrong people), it will be you who will be paying for it through higher taxes. Darn - instead of taxing the man behind the tree, they will be taxing me!

Now I'm confused. To me, the only point here I see is that you are able to have a very low tax liability, which is a problem with our tax system (possibly), but not at all representative of the taxes most people pay. My household is comfortably middle class by your definition, but we pay far more than you do in income taxes... closer to 15% of our gross income. And that's with the tax advantages of being landlords. And it has, and could be, significantly higher, which is why I agree with your main argument, but not the way this evidence is used to prove it.

[Brittain33]

How do you get to $72,000 in deductions? Did you buy the Arizona Capitol with a mortgage?

[Grumpier Than Uncle Joe]

How do you get to $72,000 in deductions? Did you buy the Arizona Capitol with a mortgage?

Don't you pay attention......he has that summer mansion thingy. 

[Torie]

How do you get to $72,000 in deductions? Did you buy the Arizona Capitol with a mortgage?

No, as I noted it was due primarily to paying a large state income tax bill in 2010 for the 2009 year, and if I normalized that, my tax liability was still under 5K due primarily to the pension plan deduction.  Oh, I see I also have a big medical expense deduction, because I could claim one of my relatives as a dependent, and had huge medical bills. I forgot about that. So if I zero out the medical expense deduction, and normalize my state income tax deduction, my tax liability zooms up to about $13,100 per year - still pathetically low. It certainly was not due to my home mortgage interest deduction. That is about $3,000; I have had the same mortgage for 23 years, and it is a variable interest loan tied to the 11th district cost of funds, and the interest rate these days is about 3.3% per annum.

No Grumps, the tax code was fixed in 1986 regarding being able to wash real estate "losses" against your other income (I have never qualified for the $25,000 deduction which is phased out as you earn more income.) (Vacation home interest is subject to the AMT by the way.) From 1981 to 1986 I paid a de minimus amount of taxes, and as an associate lawyer, once claimed 78 dependents for purposes of withholding when I was an employee.

I have basically found our tax code to be a joke from day one - and still do. But when your income bounces up into the numbers that our public square characterizes as "the rich" zone, your income taxes do go up - exponentially, reaching the levels that are paid in Western Europe. It is in the zone below, that things I think have to change, and change rather dramatically, if we want the level of entitlements that seem to be accepted in general as appropriate (and even that is assuming folks can be educated to accept the concept of "death panels"). Absent that, there is probably no objective function to our little fiscal conundrums - none.

Vote for Torie. Vote for death panels and higher taxes on yourself!  What percentage of the vote do you think I would get? 

[Brittain33]

So if I zero out the medical expense deduction, and normalize my state income tax deduction, my tax liability zooms up to about 13,100 per year - still pathetically low.

Ok, that is more typical and, I agree with you, not sufficient to do what we expect government to.

[opebo]

Good for you, jmfcst Torie, for the high income.  Kudos, enjoy it.. or at any rate what ever passes for 'enjoy' in your case.  You are very right to value your social position and its material reward, and to remind others of their inferior position.  This is good old fashioned simian behavior, and nothing the rest of us have any basis to question. 

I present my submission to you in (symbolic) kind:

Thank you so much for reminding me of that delightful monkey-ass post, memphis.  You are a fine and kind poster, and you inspire me try to be as good as I have been.

[memphis]

How do you get to $72,000 in deductions? Did you buy the Arizona Capitol with a mortgage?

No, as I noted it was due primarily to paying a large state income tax bill in 2010 for the 2009 year, and if I normalized that, my tax liability was still under 5K due primarily to the pension plan deduction.  Oh, I see I also have a big medical expense deduction, because I could claim one of my relatives as a dependent, and had huge medical bills. I forgot about that. So if I zero out the medical expense deduction, and normalize my state income tax deduction, my tax liability zooms up to about $13,100 per year - still pathetically low. It certainly was not due to my home mortgage interest deduction. That is about $3,000; I have had the same mortgage for 23 years, and it is a variable interest loan tied to the 11th district cost of funds, and the interest rate these days is about 3.3% per annum.

No Grumps, the tax code was fixed in 1986 regarding being able to wash real estate "losses" against your other income (I have never qualified for the $25,000 deduction which is phased out as you earn more income.) (Vacation home interest is subject to the AMT by the way.) From 1981 to 1986 I paid a de minimus amount of taxes, and as an associate lawyer, once claimed 78 dependents for purposes of withholding when I was an employee.

I have basically found our tax code to be a joke from day one - and still do. But when your income bounces up into the numbers that our public square characterizes as "the rich" zone, your income taxes do go up - exponentially, reaching the levels that are paid in Western Europe. It is in the zone below, that things I think have to change, and change rather dramatically, if we want the level of entitlements that seem to be accepted in general as appropriate (and even that is assuming folks can be educated to accept the concept of "death panels"). Absent that, there is probably no objective function to our little fiscal conundrums - none.

Vote for Torie. Vote for death panels and higher taxes on yourself!  What percentage of the vote do you think I would get? 

Yeah, that darn 15% capital gains rate is killing our super rich

[Torie]

Hey Memphis, until last year, Germany had a zero capital gains rate - yes zero (that had to change because Germany is packed with olds, and so the nation is getting kind of desperate). It doesn't bother me much personally if the capital gains tax is raised in the US, because I hold assets in general forever. And at death one gets a step up in basis, and there is then no gain to tax. So jack the rate up too much and you will get less revenue, and a distortion in the free movement of capital to the most productive uses. Ideology so often just sends one into the ditch on what makes sensible public policy.

[opebo]

Hey Memphis, until last year, Germany had a zero capital gains rate - yes zero (that had to change because Germany is packed with olds, and so the nation is getting kind of desperate). It doesn't bother me much personally if the capital gains tax is raised in the US, because I hold assets in general forever. And at death one gets a step up in basis, and there is then no gain to tax. So jack the rate up too much and you will get less revenue, and a distortion in the free movement of capital to the most productive uses. Ideology so often just sends one into the ditch on what makes sensible public policy.

No, you can always adjust - for example make the gains taxable whether 'realized' or not, thus forcing capital to be moved...

[Torie]

Hey Memphis, until last year, Germany had a zero capital gains rate - yes zero (that had to change because Germany is packed with olds, and so the nation is getting kind of desperate). It doesn't bother me much personally if the capital gains tax is raised in the US, because I hold assets in general forever. And at death one gets a step up in basis, and there is then no gain to tax. So jack the rate up too much and you will get less revenue, and a distortion in the free movement of capital to the most productive uses. Ideology so often just sends one into the ditch on what makes sensible public policy.

No, you can always adjust - for example make the gains taxable whether 'realized' or not, thus forcing capital to be moved...

I see. And where are you going to get the cash to pay this tax, if nothing is sold, Opebo?  And how practicable will it be to annual appraise all of your assets that are not publically traded?  Behind the impracticalities of it all (which is why no nation on this earth taxes unrealized gains), it would cause the cost of capital to skyrocket in the US, putting us at a huge disadvantage vis a vis the rest of the world. I can't think of a better way really to hasten the US's decline from its perch as the planet's leading economy, and truncate our economic growth rate on a per capita basis down to next to nothing.