Name: Tess
Home: St. Louis
Tax Headache
I don't have much to say today because I'm suffering from a Tax Headache. All it took was 30 minutes of going over our state return, and bam!--it hit me. We're even getting money back this year, so my headache is due solely to the process of doing taxes. We moved states, bought a house, and started itemizing. I'm self-employed. Things have gotten so complicated I've been nostalgic for the days when I used the 1040-EZ.
If I weren't so out of it, maybe I could formulate some coherent thoughts about the need for tax simplification (why do I have to compute my self-employment tax only to deduct half of it?) or the travesty of Bush's tax cuts for the rich, but for now I think the only cure is a cup of tea and Bleak House.
If I weren't so out of it, maybe I could formulate some coherent thoughts about the need for tax simplification (why do I have to compute my self-employment tax only to deduct half of it?) or the travesty of Bush's tax cuts for the rich, but for now I think the only cure is a cup of tea and Bleak House.
posted by Tess | 4:34 PM
1 Comments:
I probably shouldn't say it, when so many people hate figuring out their taxes, but I actually find the whole experience kind of interesting. What I like most is learning more about how the tax system works. It is fascinating to me how the various provisions affect people differently, and then thinking about how I feel about the tax system from a social justice point of view.
On the specific point of calculating 1/2 of your self-employment tax, my understanding is that this provision is necessary to insure that self-employed people are taxed for social security purposes at the same rate as everyone else, since regular employers pay half. Or perhaps you knew that already and were just trying to make a rhetorical point.
I am sympathetic to the idea of making the tax code simpler, but I am suspicious that any tax reform plan claiming to do that would actually just help lower taxes on the rich. (After all, what could be "simpler" than just taxing everyone at the same percentage rate, no matter how much they make?) That said, I think we could adopt a relatively simple progressive income tax--preserving an earned income tax credit for people at the bottom who pay such a high income percentage to social security taxes--that would increase the tax rate proportionally to income.
Many people don't realize that back in the 1950s, we had an upper income tax bracket of something like 90%. If we want to get even bolder and more radical, I wonder if we might even help solve the government's fiscal problems by instituting a "maximum wage" in addition to raising the minimum wage. What are rich people going to do with all that money anyway?
Okay, sorry for the long tax-related rant. I should probably not have confessed my great enthusiasm for figuring out the tax code, which might make any readers think I am a total lunatic. But I just couldn't help it.
Post a Comment
<< Home