My annual tax rant:
In my 1040 instruction booklet this year, I counted 20 of those little (and not so little) worksheets on things like alternative minimum tax, ira deductions, child tax credit, earned income tax credit, itemized deductions limitations etc etc etc. I didn't have to fill out most of them of course - but this is way too much.
The thing that gets me really ticked off is the itemized deductions limitation worksheet. If your income is too high ($145,950 for a joint return and half that for single) your itemized deductions are limited and you have to use the worksheet to see how much of your itemized deductions you can use. You go through a few little calculations and end up multiplying your adjusted deductions by 3%. Then this amount is how much you subtract from your itemized deductions - for us it was $300 and change that we had to subtract out. The impact on our taxes was to make them higher by about $100.
Though this isn't much it galls me. Two reasons.
One - if your tax liability is in the tens of thousands anyway, why do they have to try to chisel out another 100 bucks?
Second - is the reason for the limitation. Why should your itemized deductions be limited because you make too much money anyway? All our itemized deductions are legitimate. I have receipts for them. The only reason for the limitation is because the government thinks we're "rich" and wants to stick it to us a little for being "rich". They want to play robin
hood, taking away from us rich robber barons who probably "never worked a day in our lives", as Democratic National Chairman Howard Dean said about Republicans recently, and giving it to the "Poor" we're probably oppressing.
In reality, we're not rich - we're not even in the top income tax bracket. But even if we were, we ought to still be allowed all our real legal deductions. Higher income people pay taxes at a higher rate as it is.
That's okay with me - but why do they have to slap insulting little takeaways on you if you make too much? This is only a little adjustment to our overall tax liability but it angers me cause I figure some liberal tax committee staffer was just looking for a way to stick his finger in my eye.
Man, how mad would I be if I had to fill out the AMT worksheet? I would be foaming at the mouth. I am uncomfortably close to having to fill out the AMT Form 6251. Which reminds me why the AMT exists. Because about 25-30 years ago, the news media released a story saying X number of millionaires had no income tax liability. There were legal
reasons why some rich people paid no taxes - mostly tax-free municipal bonds. Which yield lower interest rates than taxable bonds and serve a public purpose - allowing government institutions (including schools, hospitals, toll roads, bridges, etc etc) to borrow at a lower interest rate, saving local tax payers money over the long run.
But some people were fooled into supporting a legislative "fix" of the non-existent problem. Now as a direct result many high middle income people are being hit with something sold as a tax on millionaires. Whenever you hear people talking about "taxing the rich" or "income
inequality" hold onto your wallet cause this talk is all part of a plan to stick it to you. You're not rich, you think? Well, wait a couple decades and you'll find out the government will treat you like you are.
Inequality isn't a problem anyway. An economy which doesn't produce jobs or opportunities to better yourself if you want is a problem. But there are always going to be people who take advantage of opportunities and those who don't. So most inequality is just a result of the choices people make. |
