My 2010 income tax exceeds the average household income

[calmloki]

Way back when I used to do taxes for a living... and I would see where we would give someone estimated tax payment forms of $1 million PER QTR.... others would say 'it must be horrible to have to pay that much in taxes'....


I used to say "I would LOVE it if I had to pay that much in taxes".... because I would be making a LOT of money...

Sure, you want to pay as little as possible legally (at least I want to be legal).... but not any more...

Soooo, $195K in taxes... good for you.......

Been trying to find the L'il Abner cartoon in which Abner is overjoyed at the privilege of paying some taxes. Almost think the $0.25 he had to pay was more than General Bullmoose and the taxes pained Bullmoose more...

Writing big checks makes me kinda giddy as long as there's money to cover them... 'course my big checks aren't THAT big...

 

[kumquat]

My goal has always been to pay a million in income tax. I'll get there before most of you for two reasons:
1) I live in Canada where we know about progressive taxation.
2) Two reasons for what?

 

[foxfirev5]

I've had years when I paid considerable taxes and years when I paid nearly nothing. Oddly enough, the years I paid higher taxes were generally easier and less stressful

 

[scrabbler1]

When I cashed out my company's ESOP 2 years ago, my federal income tax bill slightly exceeded $50k, 3x higher than its previous high while I was working. I can't imagine what it would be like to have that kind of income every year.

 

[rescueme]

I fully support (all expenses) my long-time girlfriend of almost 9 years, and I still can't claim even "Head of Household" as far as I understand the tax rule. So I can't even claim that.

If you don't want to get married, why not just adopt your GF? ...

(I understand that's what Hef just did )...

 

[NW-Bound]

As he is only 24 now according to his profile, it is impressive that he has been supporting her since 15.

 

[Westernskies]

As he is only 24 now according to his profile, it is impressive that he has been supporting her since 15.

Jerry Lee Lewis is a E-R.org member?

 

[Danmar]

2010 is the first time that DW and I will both have a full year of income after finishing our graduate programs, and TaxCaster tells me that we will pay >$50k in federal taxes which is around the average household income. Probably old hat to many here but it seems odd to me...I don't feel "rich"...

You may not feel rich but I would hope you feel lucky. Congratulations!

 

[Danmar]

I have paid multiples of this amount in taxes for many years. Feel very lucky about it. We have a wonderful life and given that I don't complain about taxes.

 

[Jay_Gatsby]

Those who pay a huge amount in taxes do have a point - they worked hard for their money and took risks, while others chose not to do so. This is why a flat tax or a tax system based on consumption may make more sense. Under a flat tax, the rich may pay "more" in terms of total dollars, but they pay the same "share" of their income as they guy earning less. Under a consumption tax system, savers are rewarded with lower taxes, while spenders are "punished" for consuming far more resources than they need.

 

[kyounge1956]

Those who pay a huge amount in taxes do have a point - they worked hard for their money and took risks, while others chose not to do so. (snip)

There are plenty of people who work a lot harder, take much bigger risks, or both, and get a lot less money in return for their efforts than the high earners who gripe about their big tax bill, but I don't see any of the latter volunteering to change places with, say, coal miners.

 

[FUEGO]

There are plenty of people who work a lot harder, take much bigger risks, or both, and get a lot less money in return for their efforts than the high earners who gripe about their big tax bill, but I don't see any of the latter volunteering to change places with, say, coal miners.

Nor have I seen welfare louts (the beneficiaries of those paying the five and six figures in taxes) picking up the axe, breathing apparatus and helmets and hopping down the coal mine. I mean, why work when you can get by ok without working?

 

[Amethyst]

Here's a thought: Since I make more, and thus have to pay more, why don't I get preferential treatment or better benefits than someone who makes less and gets the exact same I do? J.

Hmm...what did you have in mind? A special title that everyone has to call you? Mandatory "movie-style" parking everywhere? (That's the kind where the hero always finds a space right in front of wherever he needs to be in a hurry).

My impression is that people with "your" kind of money get treated pretty special already! They get to live in the best locations, eat at the nicest restaurants, hire the smartest lawyers.
Nothing wrong with that, by the way.



Amethyst

 

[M Paquette]

Hmm...what did you have in mind? A special title that everyone has to call you? Mandatory "movie-style" parking everywhere? (That's the kind where the hero always finds a space right in front of wherever he needs to be in a hurry)

He gets to be audited first.

 

[Westernskies]

There are plenty of people who work a lot harder, take much bigger risks, or both, and get a lot less money in return for their efforts than the high earners who gripe about their big tax bill, but I don't see any of the latter volunteering to change places with, say, coal miners.

Coal mining doesn't pay as well as many other professions that require higher education, which is why some of us worked our way through college at minimum wage while our friends headed off to the mines (or factories, or construction sites) at wages of 4-6 times that amount right out of high school. The same reason we later took career-path jobs that didn't allow us to punch a time clock and be home every evening with our families. And why we looked ahead and put money into our 401K's instead of a bass boat. And why many of are fed up with having higher tax crosshairs on our backs from folks who made different choices and now begrudge us the success we worked so hard to achieve and think we "owe" them.

 

[kyounge1956]

Nor have I seen welfare louts (the beneficiaries of those paying the five and six figures in taxes) picking up the axe, breathing apparatus and helmets and hopping down the coal mine. I mean, why work when you can get by ok without working?

OK, so they object to some of the uses made of the tax revenue. So do I, and so does probably everyone else who pays taxes, but this bit about "welfare louts" is a red herring. First off, "welfare louts", by which I suppose you mean people who could work but won't, benefit not just from the taxes of people who pay five or six figures, they also benefit from my taxes, and from those of the high-school kid who works part time and pays only a few hundred bucks a year. Big earners haven't any more to complain of in this respect than any other taxpayer. The IRS doesn't put all the money collected from them into a special pile devoted entirely to welfare benefits for neer-do-wells—the same percentage of the tax I pay, or of what the high-schooler pays, goes to "louts" as of what a big earner pays. I am all for getting slackers off of welfare, but even if every last one of them got a job that paid enough so they weren't eligible for any sort of aid, high earners would still have high taxes, because social programs are only 20% of total Federal spending, and part of that 20% goes to people who are genuinely unable to work. (See the pie chart on page 100 of the 1040 form from 2009, showing Federal income and outlays, and the footnotes below.) High earners who complain about their taxes now would probably still gripe, but the fact remains that they are better off financially than the vast majority of people. They remind me of that fairy tale, "The Princess and the Pea"—they're lying on feather beds ten deep, complaining about their terrible bruises from the pea under the bottom mattress.

 

[Westernskies]

...but the fact remains that they are better off financially than the vast majority of people.

Why?

 

[Alan]

...but the fact remains that they are better off financially than the vast majority of people.

Why?

Probably a bit too subtle for this simple mind of mine I have tried living on welfare and also of living on a salary paying taxes of ~40k/year and I definitely felt financially better off in the latter situation and was MUCH happier. Or was I? What am I missing?

 

[kyounge1956]

There are plenty of people who work a lot harder, take much bigger risks, or both, and get a lot less money in return for their efforts than the high earners who gripe about their big tax bill, but I don't see any of the latter volunteering to change places with, say, coal miners.

Coal mining doesn't pay as well as many other professions that require higher education, which is why some of worked our way through college at minimum wage while our friends headed off to the mines (or factories, or construction sites) at wages of 4-6 times that amount right out of high school. The same reason we later took career-path jobs that didn't allow us to punch a time clock and be home every evening with our families. And why we looked ahead and put money into our 401K's instead of a bass boat. And why many of are fed up with having higher tax crosshairs on our backs from folks who made different choices and now begrudge us the success we worked so hard to achieve.

True, coal mining doesn't require higher education, but there are plenty of jobs that do, and pay nowhere near as much as the complainers make. I'm thinking of teachers, social workers, librarians, clergy. There are people who risk life and limb on their jobs, rather than the financial losses risked by high earners, and they aren't paid as much as the complainers either.

I don't begrudge high earners anything. I'm just fed up with hearing (from some of them) how tough they have it, or as if that wasn't enough, that they should get preferential treatment! Anyone who is making the kind of income that results in a five-digit tax hit has obviously made some smart economic choices. Equally obviously they are being amply compensated for having made them. Congratulations or kudos may be called for, but sympathy? I don't think so.

 

[haha]

Probably a bit too subtle for this simple mind of mine I have tried living on welfare and also of living on a salary paying taxes of ~40k/year and I definitely felt financially better off in the latter situation and was MUCH happier. Or was I? What am I missing?

Perhaps that much of this complaining serves as a warning. "Poor" people have a whole bureaucracy of professional complainers working for them. Those who are first in line to be expropriated at threat of criminal prosecution might as well let it be known how they feel; and also that collectively they are not exactly without the power to oppose, mitigate or even cancel this expropriation. Example, Obama's new tax bill.

Politics is a little like American football. Real estate once won tends to be at least somewhat sticky.

Ha

 

[Alan]

Perhaps that much of this complaining serves as a warning. "Poor" people have a whole bureaucracy of professional complainers working for them. Those who are first in line to be expropriated at threat of criminal prosecution might as well let it be known how they feel; and also that collectively they are not exactly without the power to oppose, mitigate or even cancel this expropriation. Example, Obama's new tax bill.

Politics is a little like American football. Real estate once won tends to be at least somewhat sticky.

Ha

I don't understand your reply to my post. WS asked why people who pay 6 figure tax bills are financially better off than people on welfare. When I was on welfare, the "whole bureaucracy of professional complainers " working for me did not make me any better off financially than when I was a high earner.

Now that I'm RE'd I am much happier than I was a year ago but I'm not better off financially.

 

[Westernskies]

True, coal mining doesn't require higher education, but there are plenty of jobs that do, and pay nowhere near as much as the complainers make. I'm thinking of teachers, social workers, librarians, clergy. There are people who risk life and limb on their jobs, rather than the financial losses risked by high earners, and they aren't paid as much as the complainers either.

I don't begrudge high earners anything. I'm just fed up with hearing (from some of them) how tough they have it, or as if that wasn't enough, that they should get preferential treatment! Anyone who is making the kind of income that results in a five-digit tax hit has obviously made some smart economic choices. Equally obviously they are being amply compensated for having made them. Congratulations or kudos may be called for, but sympathy? I don't think so.

Just who are "the complainers" you so want to categorize? I'd like you to offer a few examples, like the public servants you called out. (if my profession doesn't fall into your stereotype, are you OK with keeping my taxes at their current rates? ) I never said I have it tougher than anyone else, just that I made the financial and lifestyle choices that got me where I am today with my eyes wide open and my future financial security in mind. Paying ever-increasing tax rates jeopardizes that security, just like it would if your taxes awent up X% because lower wage earners wanted a bigger piece of your assets.
I'm just fed up with hearing (from most of them) that I somehow got preferential treatment from the government and now I need to pay a significantly higher tax rate because of it.

I don't recall ever asking for sympathy, just a fair (non-targeted) tax rate. You want me to pay more in taxes, I think I'm paying enough now.
Pretty obvious we'll never agree on this issue.

 

[Westernskies]

Probably a bit too subtle for this simple mind of mine I have tried living on welfare and also of living on a salary paying taxes of ~40k/year and I definitely felt financially better off in the latter situation and was MUCH happier. Or was I? What am I missing?

Alan, I think you may have misinterpreted my question. The "Why" was intended as "WHY are some folks financially better off than others?" I maintain it is primarily due to making better choices, financial and lifestyle sacrifices, taking some risks, and and working your tail off. Does luck have something to do with it? Perhaps, but it's hard to quantify "luck" as a taxable entity, but in my experience, the harder I worked the "luckier" I seemed to get. We've flogged the luck horse to death in other threads, so I won't belabor it here.

Maybe a better way to phrase the question is WHY did you choose FI over Welfare?

 

[haha]

I don't understand your reply to my post. WS asked why people who pay 6 figure tax bills are financially better off than people on welfare. When I was on welfare, the "whole bureaucracy of professional complainers " working for me did not make me any better off financially than when I was a high earner.

Now that I'm RE'd I am much happier than I was a year ago but I'm not better off financially.

I absolutely understand. And that was not my point. I must not have made the point. Not that there is anything wrong with that...

I was addressing another question, which I thought had been raised. "Why do heavily taxed high earners complain about taxes"; not "why are welfare recipients happier than heavily taxed high earners", which from what I have seen I would tend to agree with you, that they are not.

 

[kyounge1956]

Just who are "the complainers" you so want to categorize? I'd like you to offer a few examples, like the public servants you called out. (if my profession doesn't fall into your stereotype, are you OK with keeping my taxes at their current rates? ) I never said I have it tougher than anyone else, just that I made the financial and lifestyle choices that got me ahead of others with my eyes wide open and my future in mind.
I'm just fed up with hearing (from most of them) that I somehow got preferential treatment from the government and now I need to pay a significantly higher tax rate because of it.

I don't recall ever asking for sympathy, just a fair (non-targeted) tax rate. You want me to pay more in taxes, I think I'm paying enough now.
Pretty obvious we'll never agree on this issue.

Well for starters, let's take the OP on this thread, who "doesn't feel rich" even though he's in the top 1/1000 of one percent of incomes worldwide. And to that I would add fantasm who later in the thread described himself as " sad/angry/depressed/annoyed" by his tax bill of $195K, though he must be earning, at a guess, at least three times as much as the OP (because his tax bill is ~3x the OP's), and maybe more. By "complainers" I was referring to individuals of like attitudes, not to people in specific professions. I don't know what either the OP or fantasm do for a living, and I wouldn't expect everyone in those professions to have the same attitude about taxes in any case, any more than all the people in my line of work do. The professions I listed have in common that they require higher education and don't pay incomes in the range that result in five-digit tax bills. But I don't suppose all teachers, social workers, librarians and clergy have the same attitude toward taxes either. Some of them probably complain that their taxes are too high, and others of them think "even after taxes I have all the money I need, in fact enough for more than just the necessities—all in all, I've nothing to complain about". My remark about preferential treatment did not refer to you either, or to high earners in general, but to fantasm's suggestion in #20 that he (and other high earners?) should get "preferential treatment or better benefits than someone who makes less". Nor do I see you as asking for sympathy, but OP and fantasm certainly struck me as wanting some.

I pay a higher percentage of my income in taxes than a low wage earner, or (I'm pretty certain) than a household with children at the same annual income, and IMO that's how it should be—the low earner or the household with kids needs a bigger proportion of what they make for necessities than I (a childless single) do. I've got earnings over and above what I need to live (and to save for retirement) on, and to an even greater extent so do fantasm and the OP—and possibly you too. I think earnings that are "over and above" should be taxed before eating into what a low-income household needs for the bare necessities. If that's a targeted tax rate, you're right, we never will agree.