Revolution is in the Air

On 6/21/2016 7:46 AM, W. Wesley Groleau wrote:
On 06-21-2016 01:40, Phil W Lee wrote:
It's so normal that I find it difficult to conceive of any other.
Is it really so primitive in your tax systems that if (for example)
there is a tax increase threshold at $30,000, a man earning $30,001
actually has less take home than one earring $29,999?

No, that is NOT the case. Here, for example, are three of the brackets
from a recent year:

10% 9,275.00
15% 37,650.00
25% 91,150.00

What this means is that if my AGI¹ was $9275, my taxes would have been
$927.50. If it was $9300, they would have been that amount plus 15% of
$25, or $931.25. So, the overall percentage is higher, but the
take-home is NOT less. Income increased $25, taxes increased $3.75

However, the taxes withheld _can_ be somewhat shocking in certain
circumstances. When you have a lot of overtime, or a special bonus, the
amount withheld is computed as if that paycheck were the amount you get
every time. So in those cases, your take-home can actually be less for
that paycheck. But that tends to be refunded when you file the year's
return.

¹Adjusted Gross Income: income minus certain adjustments, most of which
are unavailable to 95% of the population. And actually, there are
additional exemptions/deductions on the AGI before tax is computed.

Precisely. I suspect that John and others are concentrating on the take
home pay in one check, and quietly ignoring their actual tax bill.

I do agree, though, that if the system were designed properly, even one
paycheck should not be affected as John describes.
--
- Frank Krygowski

On 06-21-2016 16:16, Frank Krygowski wrote:
On 6/21/2016 7:46 AM, W. Wesley Groleau wrote:
However, the taxes withheld _can_ be somewhat shocking in certain
circumstances. When you have a lot of overtime, or a special bonus, the
amount withheld is computed as if that paycheck were the amount you get
every time. So in those cases, your take-home can actually be less for
that paycheck. But that tends to be refunded when you file the year's
return.

Precisely. I suspect that John and others are concentrating on the take
home pay in one check, and quietly ignoring their actual tax bill.

I do agree, though, that if the system were designed properly, even one
paycheck should not be affected as John describes.

Well, the current system means that the payroll department can apply a
single simple formula (or table) to each check. To avoid the problem I
described would require them on each check to predict the person's
income for the whole year. When bonuses (like mine) are based on
unpredictable factors, that would be impossible. And in some
industries, they can't predict how much overtime will happen in the future.

--
Wes Groleau

On Tue, 21 Jun 2016 10:16:04 -0400, Frank Krygowski
wrote:

On 6/21/2016 7:46 AM, W. Wesley Groleau wrote:
On 06-21-2016 01:40, Phil W Lee wrote:
It's so normal that I find it difficult to conceive of any other.
Is it really so primitive in your tax systems that if (for example)
there is a tax increase threshold at $30,000, a man earning $30,001
actually has less take home than one earring $29,999?

No, that is NOT the case. Here, for example, are three of the brackets
from a recent year:

10% 9,275.00
15% 37,650.00
25% 91,150.00

What this means is that if my AGI¹ was $9275, my taxes would have been
$927.50. If it was $9300, they would have been that amount plus 15% of
$25, or $931.25. So, the overall percentage is higher, but the
take-home is NOT less. Income increased $25, taxes increased $3.75

However, the taxes withheld _can_ be somewhat shocking in certain
circumstances. When you have a lot of overtime, or a special bonus, the
amount withheld is computed as if that paycheck were the amount you get
every time. So in those cases, your take-home can actually be less for
that paycheck. But that tends to be refunded when you file the year's
return.

¹Adjusted Gross Income: income minus certain adjustments, most of which
are unavailable to 95% of the population. And actually, there are
additional exemptions/deductions on the AGI before tax is computed.

Precisely. I suspect that John and others are concentrating on the take
home pay in one check, and quietly ignoring their actual tax bill.

Frank, when I was a single Airman there wasn't anything except an
actual tax bill. There were no deductions for anything. Or perhaps a
better way of saying that was there were no deductions available to
me.

I do agree, though, that if the system were designed properly, even one
paycheck should not be affected as John describes.
--
cheers,

John B.

On 6/21/2016 4:48 PM, W. Wesley Groleau wrote:
On 06-21-2016 16:16, Frank Krygowski wrote:
On 6/21/2016 7:46 AM, W. Wesley Groleau wrote:
However, the taxes withheld _can_ be somewhat shocking in certain
circumstances. When you have a lot of overtime, or a special bonus, the
amount withheld is computed as if that paycheck were the amount you get
every time. So in those cases, your take-home can actually be less for
that paycheck. But that tends to be refunded when you file the year's
return.

Precisely. I suspect that John and others are concentrating on the take
home pay in one check, and quietly ignoring their actual tax bill.

I do agree, though, that if the system were designed properly, even one
paycheck should not be affected as John describes.

Well, the current system means that the payroll department can apply a
single simple formula (or table) to each check. To avoid the problem I
described would require them on each check to predict the person's
income for the whole year. When bonuses (like mine) are based on
unpredictable factors, that would be impossible. And in some
industries, they can't predict how much overtime will happen in the future.

Yes, you're probably right. Maybe I should have said "if the system
were designed perfectly..." - with the understanding that nothing is
ever perfect.


--
- Frank Krygowski

On 6/21/2016 8:29 PM, John B. wrote:
On Tue, 21 Jun 2016 10:16:04 -0400, Frank Krygowski
wrote:

On 6/21/2016 7:46 AM, W. Wesley Groleau wrote:
On 06-21-2016 01:40, Phil W Lee wrote:
-snip taxes-

Frank, when I was a single Airman there wasn't anything except an
actual tax bill. There were no deductions for anything. Or perhaps a
better way of saying that was there were no deductions available to
me.
-snip-

You should have made a contribution to your congressman in
exchange for a half sentence special tax break added to an
unrelated bill. That's what everyone else did.

And so here we are...


--
Andrew Muzi
www.yellowjersey.org/
Open every day since 1 April, 1971

On Wed, 22 Jun 2016 07:33:44 -0500, AMuzi wrote:

On 6/21/2016 8:29 PM, John B. wrote:
On Tue, 21 Jun 2016 10:16:04 -0400, Frank Krygowski
wrote:

On 6/21/2016 7:46 AM, W. Wesley Groleau wrote:
On 06-21-2016 01:40, Phil W Lee wrote:
-snip taxes-

Frank, when I was a single Airman there wasn't anything except an
actual tax bill. There were no deductions for anything. Or perhaps a
better way of saying that was there were no deductions available to
me.
-snip-

You should have made a contribution to your congressman in
exchange for a half sentence special tax break added to an
unrelated bill. That's what everyone else did.

And so here we are...

Contribution to my congressman? Good Lord Man. I was a lowly Airman
stationed in Japan, no money for contributions. In those days on
payday one first went to the Base Exchange and bought two cartons of
cigarettes, one tube of tooth paste, a packet of razor blades and 3
bars of soap. Then, having become self sufficient for the next month
one could spend whatever was left on Booze and Broads.
--
cheers,

John B.

On Wednesday, June 22, 2016 at 5:34:03 AM UTC-7, AMuzi wrote:
On 6/21/2016 8:29 PM, John B. wrote:
On Tue, 21 Jun 2016 10:16:04 -0400, Frank Krygowski
wrote:

On 6/21/2016 7:46 AM, W. Wesley Groleau wrote:
On 06-21-2016 01:40, Phil W Lee wrote:
-snip taxes-

Frank, when I was a single Airman there wasn't anything except an
actual tax bill. There were no deductions for anything. Or perhaps a
better way of saying that was there were no deductions available to
me.
-snip-

You should have made a contribution to your congressman in
exchange for a half sentence special tax break added to an
unrelated bill. That's what everyone else did.

And so here we are...

A special tax break would be so cool! A pop-up box would appear on Turbo Tax saying "are you Andrew Muzi?" "If so, you may qualify for a substantial tax break. Let's check!" Or you fill in your name, and the program says "I see that you are Andrew Muzi. Let's calculate your savings!" Turbo Tax purchasers across the nation would be saying, "who the f*** is Andrew Muzi?" Think about all the hits on your website. You need to start your lobbying efforts immediately -- write it off as a business expense.

-- Jay Beattie.