Is it time to join the 47% of Americans who pay no taxes?

[citrine]

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Originally Posted by ERD50 Who said this? Everyone!? I think it is more accurate to say that some of us don't think we should pay for someone else's decision to become a parent. Tax - Free Tax Tips and Free Tax Calculators - H&R Block® BTW, a single with $30,000 wage, no dependents will pay ~ $2,280 in FIT. MFJ $60,000 total, with two kids will pay $1,465 in FIT. How do you feel about a couple making 2x more than you, paying less in taxes? Shouldn't they contribute their 'fair share'? Those kids are probably using more govt resources than no kids. -ERD50

I think of it as investing in the future of our country and our world. I have been blessed in life and don't think in terms of "me" vs. "them". My salary of 30K is for one person whereas the family has multiple individuals. What I don't understand is that people who make a LOT of money think that they should be able to bypass taxation. I think that attitude is going to be the ruin of our world. Maybe, I am alone in thinking that we should all try to help each other instead of hoarding our individual assets.

[youbet]

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Originally Posted by haha I think the more non-voters the better. I would prefer one voter only- me. TV crews would follow me to the polls, and Brian Williams would interview me to find out who I chose. And can you imagine the payola? Ha

Here in Chicago, we have payola for everyone....... Or at least for everyone who votes the way the ONE PERON tell 'em to!

[scrabbler1]

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Originally Posted by haha I think the more non-voters the better. I would prefer one voter only- me. TV crews would follow me to the polls, and Brian Williams would interview me to find out who I chose. And can you imagine the payola? Ha

What you wrote reminded me of the man (played by Kevin Costner) in the 2008 movie, "Swing Vote" in which one man's vote did decide the presidency. The media and the candidates followed him around for days until he cast his actual vote.

[ERD50]

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Originally Posted by citrine I think of it as investing in the future of our country and our world. I have been blessed in life and don't think in terms of "me" vs. "them".

I still don't see why those with kids should be paying less taxes to invest in the same future. That's what I'm not getting.

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My salary of 30K is for one person whereas the family has multiple individuals.

And multiple $30,000 incomes in my example.

Hey, what if I want to have some expensive hobby, that costs money too. Some hobbies even benefit society. So I can pay less tax too? It costs me more to live than you, due to my hobby. Hobbies are optional, and kids are optional. Remember, I do have three kids, this isn't a ' don't have kids' line, this is a 'take responsibility for your choices' line.

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What I don't understand is that people who make a LOT of money think that they should be able to bypass taxation. I think that attitude is going to be the ruin of our world.

Who are these people you refer to? All people who make a LOT of money? Posters seem to keep making up these straw-man groups to knock down in some attempt to make their points sound valid.

I think that the vast majority of people, even those who make a lot of money, support a 'progressive' tax system. Yes, everyone will try to get their tax bill to the legal minimum, some will even break the law to do it, like Timothy Geithner. I am not aware of anyone actually promoting a general policy that says the rich should pay zero FIT. Got any links to a survey on this or something?

Do you skip the legal deductions that you can take?

And let's not forget that (The Tax Foundation - Summary of Latest Federal Individual Income Tax Data ):

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In 2007, the top 1 percent of tax returns paid 40.4 percent of all federal individual income taxes

So it isn't happening. I know the response is usually 'they have most of the wealth, they should pay most of the taxes', but regardless, they ARE paying, and you are saying they think they shouldn't pay anything. They sure aren't very good at getting their wishes. I guess they are not as powerful a group as some make them out to be. Maybe they need to organize, The 'Fraternal Order of Rich People Who Want to Bypass Taxes'?

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Maybe, I am alone in thinking that we should all try to help each other instead of hoarding our individual assets.

I don't think you are alone at all. Some of us want to see that help done with some semblance of 'fairness' and efficiency and effectiveness. And some of us think people should first take responsibility for themselves, and look for help second. I think the govt is currently providing too much 'help' to too many, and in the process I am certain that they are not providing enough those who really need it. I'd like to see better focus.

-ERD50

[youbet]

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Originally Posted by ERD50 I still don't see why those with kids should be paying less taxes to invest in the same future. That's what I'm not getting.

So, what aspects of FIT that are unique to kids bother you? (Don't include personal exemptions as those are not unique to kids but rather apply to any dependent.)

I'm just not aware of these HUGE tax breaks for kids people keep whining about. Yes, low income parents probably have significantly lower taxes, as a percentage - trivial in absolute dollars, due to the child care credit if they use it. But for a middle class couple, say a couple engineers both working, the delta in taxes due to kid specific tax reductions seems minimal.

I'm guesing you're confusing the lower rate for MFJ vs single and the use of personal exemptions with savings from kids. Neither of those are kid specific.

[ziggy29]

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Originally Posted by youbet So, what aspects of FIT that are unique to kids bother you? (Don't include personal exemptions as those are not unique to kids but rather to any dependent.)

Yes, but the vast majority of dependents are the taxpayer's children.

You know that couple who is in the news about once a year for having another kid, who have something like 18 kids now, and they keep coming? Between exemptions and "per child" tax credits, I once calculated that this couple can earn over $160,000 without owing one cent in federal income tax.

How people can think this is acceptable is beyond me, personally.

[haha]

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Originally Posted by ziggy29 You know that couple who is in the news about once a year for having another kid, who have something like 18 kids now, and they keep coming? Between exemptions and "per child" tax credits, I once calculated that this couple can earn over $160,000 without owing one cent in federal income tax. How people can think this is acceptable is beyond me, personally.

Not only unacceptable, but extremely common.

[youbet]

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Originally Posted by ziggy29 Yes, but the vast majority of dependents are the taxpayer's children. You know that couple who is in the news about once a year for having another kid, who have something like 18 kids now, and they keep coming? Between exemptions and "per child" tax credits, I once calculated that this couple can earn over $160,000 without owing one cent in federal income tax. How people can think this is acceptable is beyond me, personally.

So, are you saying that the credits for dependents should be eliminated altogether or that credits for dependent adults (you take in your aging mother saving the state thousands annually in Medicaid and get a credit for her as a dependent) should be maintained and only credits for kids be eliminated?

How can you point out that few dependents are adults (relative to kids) and in the same breath give an example of a couple with 18 kids? Yeah, adult dependents are probably "rare" but not nearly as rare as having 18 kids.

Come on........

[ERD50]

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Originally Posted by youbet I'm just not aware of these HUGE tax breaks for kids people keep whining about.

It started out with me commenting how low my own FIT has been, due to the various credits. Kids, dependent deductions, and edu credits were a big part of it for me. I have not run the numbers in the same year, but I guess these get phased out at higher incomes. I know that the previous year, when I triggered a big cap gain, deductions and credits got phased out very quickly, and my tax bill was up around 15% of AGI, and that seems more 'real world' to me. As much as I gripe about our govt, I do recognize that they need to collect taxes to do what needs to be done, and 15% of a fairly high income in that year does not seem out-of-line, ballpark-wise.

On principle, I just don't see why we should be subsidizing people like me who paid $24 in FIT in 2008 on ~ $84,000 AGI. I'd prefer to see safety net stuff applied where it is needed, and not just some broad-brush tax code.

And just to be clear, it is sort of an odd whining I'm doing, because I'm saying that I (and people in my situation) should have been paying more tax in that year.

-ERD50

[ziggy29]

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Originally Posted by youbet So, are you saying that the credits for dependents should be eliminated altogether or that credits for dependent adults (you take in your aging mother saving the state thousands annually in Medicaid and get a credit for her as a dependent) should be maintained and only credits for kids be eliminated?

Another false dichotomy here -- maintaining the status quo or completely eliminating tax subsidies for children are not the only options.

[youbet]

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Originally Posted by ziggy29 Between exemptions and "per child" tax credits

Other than child care credits, which phase out with income, what "per child" tax credits are you referring to?

[youbet]

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Originally Posted by ERD50 It started out with me commenting how low my own FIT has been, due to the various credits. Kids, dependent deductions, and edu credits were a big part of it for me. I have not run the numbers in the same year, but I guess these get phased out at higher incomes. I know that the previous year, when I triggered a big cap gain, deductions and credits got phased out very quickly, and my tax bill was up around 15% of AGI, and that seems more 'real world' to me. As much as I gripe about our govt, I do recognize that they need to collect taxes to do what needs to be done, and 15% of a fairly high income in that year does not seem out-of-line, ballpark-wise. On principle, I just don't see why we should be subsidizing people like me who paid $24 in FIT in 2008 on ~ $84,000 AGI. I'd prefer to see safety net stuff applied where it is needed, and not just some broad-brush tax code. And just to be clear, it is sort of an odd whining I'm doing, because I'm saying that I (and people in my situation) should have been paying more tax in that year. -ERD50

You're still not mentioning kid specific tax breaks ERD50. I'm sitting here looking at my son's 1040 (I still have some hours to modify it for him). He has 3 rugrats: 4, 8 and 9. Other than a few paltry bux saved due to child care credits (most phased out), no kid specific savings. Thanks for mentioning the education credits, but due to the age of these kids, they don't apply. In fact, I don't think the education credits are kids specific at all. Right?

Have you gone back to the $30k single vs. $60k couple with kids example and removed the confounding caused by the non-kid specific savings due to filing MFJ? I think you're getting that confused with kid specific tax breaks.

Are you in favor of removing personal exemptions altogether.......... elderly dependents, handicapped adult dependents, etc?

[ziggy29]

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Originally Posted by youbet Other than child care credits, which phase out with income, what "per child" tax credits are you referring to?

Well, I realized I made a math error in the $160K "no tax" calculation, it's actually a little over $120K since the "per child" tax credit phases out completely at over $130K, but here it is:

TurboTax® - Child Tax Credit

(my emphasis added below)

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If you have children who are under age 17 at of the end of 2009, you can get a $1,000 tax credit per child on your tax return. A tax credit reduces your tax bill dollar-for-dollar, so three qualifying children, for example, can cut what you owe Uncle Sam by $3,000. The credit may be limited if your income exceeds the levels listed below. And the credit does not affect the exemptions you take for dependents—worth $3,650 each in 2009. The child tax credit is in addition to those exemptions.

If you didn't know about this and you have dependent children, either you earn a lot of money or you need to file an amended return to get the credits refunded to you.

[youbet]

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Originally Posted by ziggy29 Another false dichotomy here -- maintaining the status quo or completely eliminating tax subsidies for children are not the only options.

Zig, please....... Not trying to be argumentative here. Just trying to understand all these HUGE tax savings my fellow posters are referring to. I'm sitting here looking at my son's return (in TurboTax) and his three rugrats haven't saved him much. A few bux, capped by the phase out, for child care expenses. I hate to press the send button if there is a nice, ripe, HUGE piece of low hanging fruit I'm missing.

You said most dependents were tax payer's children. OK, that seems intuitive so I wouldn't even bother lookin' up the numbers. I'm just wondering if you want to eliminate all personal exemptions or just kids as personal exemptions. It isn't that uncommon for folks to support another adult (elderly parent, handicapped sibbling, etc.) and I'm wondering if those would be eliminated too along with the kids.

[haha]

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Originally Posted by youbet It isn't that uncommon for folks to support another adult (parent, handicapped sibbling, etc.) and I'm wondering if those would be eliminated too along with the kids.

No, just kids. Who needs the next generation anyway? Once the decision to be childfree is made, why not go all the way?

[youbet]

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Originally Posted by ziggy29 Well, I realized I made a math error in the $160K "no tax" calculation, it's actually a little over $120K since the "per child" tax credit phases out completely at over $130K, but here it is: TurboTax® - Child Tax Credit (my emphasis added below) If you didn't know about this and you have dependent children, either you earn a lot of money or you need to file an amended return to get the credits refunded to you.

Thanks Zig.

OK on your calculation error...... understandable. I think more importantly, you should probably state the percentage of people who have 16 kids. Your example really doesn't emphasize that the case you're calculating would be extremely, extremely rare.

On the Child Tax Credit...... yeah, I'm up on that one. Unfortunately, it phases out for my son. They're middle class, a couple of engineers, and earn over the $110k limit. In fact, I think two engineers from decent schools would start at more than that right out of university.

Also, the Child Tax Credit is not unique to kids.

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you can also claim the credit for siblings, step-siblings and half-siblings that live with you.

Before you say it, however, I'm sure kids would be the bulk of it.

[youbet]

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Originally Posted by haha No, just kids. Who needs the next generation anyway? Once the decision to be childfree is made, why not go all the way?

Errrrrr....... Ahhhhhhh....... Hmmmmm.......

Ya, sure, why not?

[ziggy29]

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Originally Posted by haha No, just kids. Who needs the next generation anyway? Once the decision to be childfree is made, why not go all the way?

"May We Live Long and Die Out":

VHEMT

[audreyh1]

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Originally Posted by youbet On the Child Tax Credit...... yeah, I'm up on that one. Unfortunately, it phases out for my son. They're middle class, a couple of engineers, and earn over the $110k limit. In fact, I think two engineers from decent schools would start at more than that right out of university.

Well, there you go. Your son and his wife make too much money to get the some of the juicier tax breaks available for kids in families with slightly lower incomes.

In 2007, $113K AGI put a household in the top 10% of tax paying households.

Households with two degreed married professionals in high paying jobs are a minority in the tax paying population. Not many households start right out of university with that kind of salary, and there are a huge number of family households with only one or no university degree.

Audrey

[youbet]

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Originally Posted by audreyh1 Well, there you go. Your son and his wife make too much money to get the some of the juicier tax breaks available for kids in families with slightly lower incomes.

When you say "some of the jucier tax breaks"....... we're only talking about one, right? People keep BS'ing about all these breaks, but not calling them out. Well, Zig called out this one that we're discussing, but that's it so far.

A $1k credit per kid is what you meant by "HUGE?" BTW, they don't have to be your kids in the traditional family sense according to the TurboTax info Zig thoughtfully referenced in his post.

Help here Audrey. I'm trying to dip into some of this big bux kids-specific savings everyone is talkin' about before pressing the send button. You're just teasing.......