Did you pay your taxes today?

As I said less eloquently on another thread, I think the self-employment tax is a pain. It's one thing to pay this on top of the regular income tax if you've got a large, thriving business. But if you freelance or have a steady job where you happen to be hired as a "consultant," it can be a huge burden. I really think there should be a better way of indexing this to your level of income, especially since more and more companies tend to hire on a consultancy basis.

</rant>

The other day I was fondling a clients W-2. His income was 21 million
dollars. He paid $5300 in Social Security tax and will pay no more.

The effective tax for our clients (most of whom earn 500k or more) is 13 to 23 percent.

To make sure you paid what you should have -- to pay what you still owe if you do, and get back what you overpaid if you did. We call it "paying our taxes" sometimes, but it really isn't, it's more like balancing a checkbook. See previous years' versions of the thread for full elaboration, I'm guessing.

The provisions that penalize me for making charitable contributions, but reward them for those making about 150% of my pre-tax salary.

The Democrat Tax deserves some attention.

How is it that you make this argument, and to what taxes are you referring to? For this thread (at least for my comments unless otherwise specified) I am referring only to federal individual income taxes.

A consumption tax would be more regressive than our current system

Not necessarily.

As for the alternative minimum tax (AMT), it's going to be a huge issue for the next president, whether it's Kerryco or Bushco. You're not going to be seeing massive support for it, either.

they'd rather post on ILX.

For example, "Many in the upper middle class have high incomes, but little investment. Yes, they are technically part of the 'investor class' but they don't put all that much money into the market, so the shift is a net cost to them."

Actually, the upper middle class (and middle class) have quite a bit of money in the market--just not in individual stocks. 401(k) plans, pensions, tuition plans (a la 529s), money market funds, etc. constitute an enormous component of investment and grow tax-free. The federal tax burden is not one of consumption, it is calculated much more on income. The overall tax burden has shifted towards consumption, but that is because of taxation policy on a local level, not federal. Even federal consumption taxes that individuals endure (on sin items, for example) are relatively minor compared to the amount paid on income (assuming the individual is paying federal income taxes.)

probably, but not as much as if you didn't do your federal, I would think.

I think I fucked up my state stuff by filing online with turbotax; I didn't have enough to pay everything, it said I had to file an extention for the remainder (which i can pay after I get my federal return), but then I wasn't sure if turbotax filed that extention for me or I had to print something out or what the fuck.

I am going to an accountant next year because other people get out of paying this much in taxes, they must be able to do the same for me. But it blows. On paper, yes, we make a lot of money, but we don't own property or a house or have children or have high medical bills, so we can't itemize beyond the standard deduction as far as I can see. We still wind up right on the cusp which dumps us into a higher tax bracket.

If I could change anything it would be this withholding BS for married people whereby you have to have extra withheld beyond claiming 0 or you owe tons of money. The second you tick "married" they withhold LESS even though you will owe MORE. This is fucking stupid and fucked up. I hate it.

No, the shift towards consumption is a product of changes in state and local taxes.

income from 401(k)s, including dividends, is subject to the federal income tax, so people whose 'investment' is primarily in 401(k)'s are penalized from the shift from investment to income.

Only in the case of withdrawal are they taxed, and the resulting tax burden would have to assume the same tax bracket as when the deferrment occured. This isn't likely, which is why you will have arguments over what the net effect is. Do you have an idea why the article you linked doesn't address this? I do. But if you can show me statistics that further explore my point, I would like to see them.

Freelancers, don't forget your quarterlies tomorrow.

...fuck, this is inconvenient timing.

It was twice as inconvenient a few minutes after that post when I realized I'd forgotten to pay my 2Q estimated taxes back in June.

My wife still hasn't paid the $4K in taxes we still owe, even though I remind her once a week about it.