stj@calmasd.UUCP (Shirley Joe) (02/12/85)
Question: What's the difference between big difference between SOs
living together and SOs married?
IRS: The married ones are poorer because they get to pay more taxes.
My SO and I were married in 1984 (April 15th, as a matter of fact) after
living together for 1.5 years. We decided in that 1.5 years, that we
loved each other and that we wanted to spend the rest of our life together
(how romantic) so we took the next logical step: We got married.
Well, last week I sat down to do our Joint Tax Return for 1984 and to
my astonishment, I found that we owed an additional $2000 in federal
taxes. Now, when we got married, we changed our W-4 forms to "married,
but withhold at the higher single rate" category. At the rate the taxes
were withheld from our paychecks, it seemed to me that everything should
balance out at year's end. Instead, I find that we must pay $2000 more in
taxes married, than we would pay if we were single (I am taking into
account the deduction for two-earner couples).
After looking at the tax tables, I figured out that married, we are at
the marginal tax rate of 38%. If we were single, both my SO and I would
be taxed at 30%. But because we are married, we cannot file as single.
There is a category of "married, filing separately" but that tax rate is
even higher than the married rate (I calculated that too).
It seems to me that something is terribly unfair here. And the
incredible thing is I don't hear anybody else complaining about it. Is
there anyone else out there that has run into the same problems? Is
there anything we can do about it? Any suggestions? Should we get a
divorce?
(I should have listened to my mother. She told us not to get married.)
Spike
{ucbvax,ihnp4}!sdcsvax!sdcc6!calmasd!stjslack@wxlvax.UUCP (Tom Slack) (02/12/85)
> Question: What's the difference between big difference between SOs > living together and SOs married? > IRS: The married ones are poorer because they get to pay more taxes. > This problem was noticed by a rather ingenius couple I read about some 10 years ago. They "solved" the problem by getting a divorce each year on December 31 and then getting married again on January 1. It was done legally with all of the formalities inherent to the state in which they lived. Not sufficient (says the IRS) I do not remember how the case ended, but I do remember that the IRS charged them with tax fraud. Also in many states the common law marriage is accepted as a marriage after some time (it is 6 months in OK). This means that in some states the IRS might have (but not likely) eventually caught up with you and charged you with filing improperly as you were in reality married even if you never filed for a certificate. Tom Slack "Always remember, it is live ammunition. KEEP YOUR HEAD DOWN!"
ecl@ahuta.UUCP (e.leeper) (02/13/85)
REFERENCES: <285@calmasd.UUCP>
You don't hear anyone else complaining about it because we've given up
complaining. We just quietly punch the wall each year.
Evelyn C. Leeper
...{ihnp4, houxm, hocsj}!ahuta!ecldgh@sun.uucp (David Hough) (02/13/85)
In article <285@calmasd.UUCP> stj@calmasd.UUCP (Shirley Joe) writes: >Question: What's the difference between big difference between SOs >living together and SOs married? >IRS: The married ones are poorer because they get to pay more taxes. > >After looking at the tax tables, I figured out that married, we are at >the marginal tax rate of 38%. If we were single, both my SO and I would >be taxed at 30%. But because we are married, we cannot file as single. >There is a category of "married, filing separately" but that tax rate is >even higher than the married rate (I calculated that too). > >It seems to me that something is terribly unfair here. And the >incredible thing is I don't hear anybody else complaining about it. Is >there anyone else out there that has run into the same problems? Is >there anything we can do about it? Any suggestions? Should we get a >divorce? > >Spike >{ucbvax,ihnp4}!sdcsvax!sdcc6!calmasd!stj There's a reason people have been complaining about the marriage penalty! Congratulations on earning comparable incomes ... if one spouse earns an insignificant amount compared to the other, the marriage penalty is not a problem. Most Congressfamilies are in this category which is why most Congresspersons are not too concerned about it. It's no more or less "fair" than most any other aspect of taxation. I used to hear about people that went to someplace like the Dominican Republic for their Christmas vacation every year and got a quicky divorce, then a quicky remarriage after New Year's... but I think one of the Reagan tax increases attempted to prevent that. You might want to look further into it to get an authoritative answer. The ultimate answer, of course, is that if the government attempted to do many fewer things, it would require much less money and lower taxes would benefit everyone even if the taxes weren't any more fair than the present ones. But that's getting into the realm of net.politics. David Hough
mark@cbosgd.UUCP (Mark Horton) (02/13/85)
The original intent of the "married, filing jointly" category was to help out married couples. And in fact, if you are married and only one of you works, you're better off being married than single, for tax purposes. This was the norm back when this rule wasn invented. Now that the norm is a two-income family, you're worse off married than single. This is known as the "marriage penalty" and it's starting to get a bit of attention. There is now a calculation in there to at least partly ease the penalty, but it doesn't compensate completely.
hrs@homxb.UUCP (H.SILBIGER) (02/13/85)
Let's put the question another way: Why should two people living together without the formality of marriage pay less taxes than a formally married couple? Whether the question is put this way, or the way it was phrased in previous questions, it is not always true. If two people are living together, not married, but one earns all the income, then they would pay more taxes than if they were married! Can anyone suggest a solution which would not have any inequities. The underlying philosophy of the present systems is that families are taxed, not individuals, and you are not a family if you are not married. (or just a family of one.) You might define a family as two individuals of oppsite sex (given that like sex individuals cannot get married under present rules in any case) who are sharing the same dwelling. This would have the advantage that they could also get benefits under each others benefit plans. What would happen then if they had to be separated for some reason, by a change in job locations for example. I would like to see some creative response to all the above. Herman Silbiger
jpexg@mit-hermes.ARPA (John Purbrick) (02/13/85)
> Question: What's the difference between big difference between SOs > living together and SOs married? > IRS: The married ones are poorer because they get to pay more taxes. The marriage tax is based on the premise that we all live as working-husband-and-housewife couples. The rationale is that husbands could avoid paying tax at higher rates by diverting half their income to their wives, so the two would each pay at a lower rate. Don't expect that the current govt. will do anything to alter this basic assumption! As you have found out, the system is monstrously unjust if both members of a couple have genuine income of their own. The fact of marriage causes a penalty, but what you "should" be doing involves the husband taking the wife as a deduction-- in other words, the rest of us would subsidize the domestic services that she (presumably) provides. Note also that housewives, as widows, can draw Social Security based on their husbands' contributions, regardless of whether they ever paid S.S. taxes themselves (actually the law is sex-blind, but not marital-status blind). The one bright spot is "Deduction for earned income when both spouses work"; it allows you to deduct 10% (I think) of the lower-paid spouse's salary from your joint income, but you will undoubtedly end up losing versus being single. The couple who got divorced each year ended up losing their case; there is a law that any transaction clearly intended primarily to reduce taxes is necessarily invalid. John Purbrick decvax!genrad!mit-eddie!mit-hermes!jpexg jpexg@mit-hermes.ARPA
red@ukma.UUCP (Red Varth) (02/13/85)
>After looking at the tax tables, I figured out that married, we are at >the marginal tax rate of 38%. If we were single, both my SO and I would >be taxed at 30%. But because we are married, we cannot file as single. >There is a category of "married, filing separately" but that tax rate is >even higher than the married rate (I calculated that too). > >Spike >{ucbvax,ihnp4}!sdcsvax!sdcc6!calmasd!stj The "marriage tax" is a consequence of three conflicting policy goals of the tax system: a progressive tax rate, the desire to tax all individuals at the same rate for the same income, and the desire to tax all families at the same rate for the same income. Example: we wish to tax those making more than $20,000 a year at 40%, and those making under $20,000 at 30%. But do we define this for individuals or families? Consider four families: (1) A two-income married couple where each earns $15,000. (2) A one-income couple where one earns $30,000 and the other works for charity, keeps house, etc. (3) A single person earning $15,000. (4) A single person earning $30,000. Now, should we tax (2) at a higher rate than (1)? If not, should we tax (1) and (2) at the same rate as (3)? After all, their average income per adult is below $20,000. But if we tax them the lower rate, (4) is penalized for being single. This was the system in effect prior to about 1970. Now we penalize two-income married couples! The kicker is that it is MATHEMATICALLY IMPOSSIBLE to resolve these three goals: we may accomplish any two, but not all three. This is one clear advantage of a uniform tax rate (flat tax) : tax considerations would not be a factor in deciding whether to marry! Paul Hightower University of Kentucky
red@ukma.UUCP (Red Varth) (02/13/85)
I, the Red Wizzard, am NOT (never have been) then poster of the previous message. He's a friend who happens to be interested in taxes, politics, etc. My terminal was handy. Sigh. Red (ukma!red)
js2j@mhuxt.UUCP (sonntag) (02/13/85)
> Let's put the question another way: > > Why should two people living together without the > formality of marriage pay less taxes than a formally > married couple? > > Whether the question is put this way, or the way it > was phrased in previous questions, it is not always true. > If two people are living together, not married, > but one earns all the income, then they would pay > more taxes than if they were married! > > Can anyone suggest a solution which would not have any > inequities. > Sure! Make income taxes independant of marital status. Simple. > The underlying philosophy of the present systems is > that families are taxed, not individuals, and you > are not a family if you are not married. (or just a > family of one.) > I think you may be reading too much into the 'underlying philosophy' of the present system. The fact is that the government doesn't like families with two wage earners (maybe because of unemployment?), and provides higher taxes to those people as an economic disincentive for this type of lifestyle. This is similar to what they do with cigarette and liquor taxes. This is just the government's way of showing it's support of working married women: tax the *^$% out of them. Just a quick rummage through my tax tables here for a numerical example: Suppose origionally, spouse #1 made $35K and paid $6,225 in federal income taxes. Suppose spouse #2 takes a job for $25K. Now their total taxes are $15,168 if filing jointly or $15,398 if filing seperately. *Or* $10,798 if they get divorced quick enough. Since most people don't want to get divorced for tax reasons, spouse #2 effectively only makes the equivalent of $19K before taxes and $16K after taxes. Since the primary wage earner in most families is still the man, it is women attempting to enter the job market who find themselves in the position of spouse #2. I guess the government just wants to keep them barefoot and pregnant. > You might define a family as two individuals of oppsite > sex (given that like sex individuals cannot get married > under present rules in any case) who are sharing the > same dwelling. > This would have the advantage that they could also get > benefits under each others benefit plans. > What would happen then if they had to be separated for > some reason, by a change in job locations for example. > > I would like to see some creative response to all the above. > > Herman Silbiger *** REPLACE THIS LINE WITH YOUR MESSAGE *** -- Jeff Sonntag ihnp4!mhuxt!js2j "Is everybody happy?" -- M. de Sade
berry@zinfandel.UUCP (Berry Kercheval) (02/15/85)
In article <399@wxlvax.UUCP> slack@wxlvax.UUCP (Tom Slack) writes: >[...] in many states the common law marriage is accepted as a marriage >after some time (it is 6 months in OK). In California, at least, for a couple's common law marriage to be legal, they must live together for a specified period AS MAN AND WIFE. If you tell everyone "We're NOT married" whenever the question comes up, you ought to be OK (no pun intended). My wife and I lived together for three years before getting married, and we checked it out. -- La musique est une science qui veut qu`on rit et chante et dance. -- Guillaume de Machaut Berry Kercheval Zehntel Inc. (ihnp4!zehntel!zinfandel!berry) (415)932-6900 (kerch@lll-tis.ARPA)
stewart@ihldt.UUCP (R. J. Stewart) (02/15/85)
> > Question: What's the difference between big difference between SOs > > living together and SOs married? > > IRS: The married ones are poorer because they get to pay more taxes. > > > This problem was noticed by a rather ingenius couple I read about some > 10 years ago. They "solved" the problem by getting a divorce each year > on December 31 and then getting married again on January 1. > ... > Not sufficient (says the IRS) I do not remember how the case ended, > but I do remember that the IRS charged them with tax fraud. There is a clause in the tax code (I don't know when it was added) that covers this. If you remarry the same person within a certain amount of time, you have to amend your tax return for the years in question as if you were married all along. Bob Stewart ihldt!stewart
jfh@browngr.UUCP (John "Spike" Hughes) (02/15/85)
I think I recall reading an article in the New York Times about the so-called "marriage tax", i.e. the higher taxation of married, both-working, couples, than unmarried, both-working, couples. Some couple had taken the matter to court, arguing that the law was an infringement of the right to the pursuit of happiness. The judge's ruling was a masterpiece of 'tongue-in-cheek' justice (although a travesty of justice itself, I think). He said something along the lines of "Rather than being a penalty for marriage, this tax structure provides an opportunity for young lovers to demonstrate, through marriage despite \higher taxes, the depth and breadth of their mutual committment and devotion." Gag. -jfh
koomen@rochester.UUCP (Hans Koomen) (02/15/85)
Why not just tax individuals irrespective of their marital status, and allow any individuals to file jointly? In other words, person A files taxes, and he can include any other individuals B who agree to file jointly, where including means adding B's income, and taking B's deductions. Any B's included except offspring under 18 must provide SS# and sign A's 1040. Surely it would be fairly easy for the tax folks to check that any B's included on a 1040 do not file a 1040 themselves. This has the benefit of simplifying things, and make it more equitable for everyone. I can include my dear old great-grandmother whom I give $x/month if she agrees. But it is NOT up to the government to make sure I'm actually supporting her! Two consenting adults ... Any comments? Would this get out of hand? Would we get tax brokers looking for human tax shelters? If we do, so what? Or should there be a ceiling on the number of allowable inclusions other than offspring? -- Hans (Koomen@Rochester.ARPA or ...!rochester!koomen.UUCP)
esco@ssc-vax.UUCP (Michael Esco) (02/16/85)
> Question: What's the difference between big difference between SOs > living together and SOs married? > IRS: The married ones are poorer because they get to pay more taxes. > > It seems to me that something is terribly unfair here. > > Spike > {ucbvax,ihnp4}!sdcsvax!sdcc6!calmasd!stj The US income tax is supposed to be a progressive tax. The idea is that those who afford it should pay more than those who can't. A married couple with two incomes of ~$30K pay more than twice as much as a single person earning $30K--- but they pay much less than a single person earning $60K. The couple pays more because they can afford to pay more. There is no such thing as a marriage penalty. The penalty is against single people, and has been for as long as I've been paying taxes. Michael Esco Boeing Aerospace
mmt@dciem.UUCP (Martin Taylor) (02/16/85)
Canadian income tax pays no attention to one's marital status,
except that if one spouse is dependent on the other, the richer
can claim a deduction from taxable income. The amount of deduction
depends on the spouse's income. That seems fair to me. There are
anomalies between common-law and certified marriage, but I don't
know what they are.
--
Martin Taylor
{allegra,linus,ihnp4,floyd,ubc-vision}!utzoo!dciem!mmt
{uw-beaver,qucis,watmath}!utcsri!dciem!mmtdave@lsuc.UUCP (David Sherman) (02/17/85)
In article <1405@dciem.UUCP> mmt@dciem.UUCP (Martin Taylor) writes: || ||Canadian income tax pays no attention to one's marital status, ||except that if one spouse is dependent on the other, the richer ||can claim a deduction from taxable income. The amount of deduction ||depends on the spouse's income. Correct. The deduction is $3,470 for 1984, and you start losing it dollar for dollar once the spouse's taxable income exceeds $490 (which makes income-splitting planning useless between $490 and $3,960 of the spouse's income). || ... That seems fair to me. Well, it's hard to say. As has been noted, there are conflicting goals which are mathematically impossible to resolve. Ther difference in the systems arises because Canada does not have joint returns - each taxpayer must file his/her own return. || ... There are ||anomalies between common-law and certified marriage, but I don't ||know what they are. "Common-law" marriage (there's no such thing, it's just a media term used for living together) does not entitle either half of the couple to claim the other. You have to be married to claim the unused portion of the spouse's basic deduction. Dave Sherman -- {utzoo pesnta nrcaero utcs}!lsuc!dave {allegra decvax ihnp4 linus}!utcsrgv!lsuc!dave
claus@inuxd.UUCP (David Claus) (02/18/85)
>The US income tax is supposed to be a progressive tax. The idea is that >those who afford it should pay more than those who can't. A married couple >with two incomes of ~$30K pay more than twice as much as a single person >earning $30K--- but they pay much less than a single person earning $60K. >The couple pays more because they can afford to pay more. > >There is no such thing as a marriage penalty. The penalty is against single >people, and has been for as long as I've been paying taxes. > > Michael Esco > Boeing Aerospace I disagree with the statement that a married couple with two incomes of ~$30K pay much less tax than a single person earning $60K. They have to pay social security tax (7.05%) on all $60K of their earnings, whereas the single only has to pay tax on the first $38K on his/her earnings. Once this is taken into account, the differnce in taxation becomes small. I wish people would realize that SS taxes are almost as large Fed taxes for a majority of the population, and they have to be consider as a general tax since they are used for other purposes besides providing retirement income. Social Security-the ultimate flat tax. Dave Claus AT&T-CP Indy
tron@fluke.UUCP (Peter Barbee) (02/19/85)
> > The marriage tax is based on the premise that >we all live as working-husband-and-housewife couples. The rationale is that >husbands could avoid paying tax at higher rates by diverting half their income >to their wives, so the two would each pay at a lower rate. Don't expect that I've been quite amused by this rash of postings claiming to know the rationale behind tax laws. I always thought the only rule governing the tax laws was that there was no rationale behind them and that they would always be unfair to someone. |-) |-) I'm curious as to why people think the government doesn't think both spouses should work. Or why they think two wage earning families are penalized with respect to one wage earning families? And finally one question (please note that this question actually concerns morality, unlike tax laws which do not); Should a two income family pay less tax than a one income family given that both families have identical incomes? Why? Later, Peter Barbee
bwm@ccice2.UUCP (Brad Miller) (02/19/85)
In article <501@homxb.UUCP> hrs@homxb.UUCP (H.SILBIGER) writes: > >Let's put the question another way: > >Why should two people living together without the >formality of marriage pay less taxes than a formally >married couple? Actually, I think singles currently pay disproportionally much of the taxes collected. Better: Tax not only income but imputed income. That is, given you are married and your wife does not work, she would still pay tax on the imputed income of the rent for her abode. Same for children. This properly moves the brunt of the tax burden to those who are most benefitting from govenment services, and lowers overall marginal tax rates. Waiting for flames, Brad Miller -- ..[cbrma, ccivax, ccicpg, rayssd, ritcv, rlgvax, rochester]!ccice5!ccice2!bwm
dave@lsuc.UUCP (David Sherman) (02/19/85)
In article <2297@mit-hermes.ARPA> jpexg@mit-hermes.ARPA (John Purbrick) writes: || The couple who got divorced each year ended up losing their case; there ||is a law that any transaction clearly intended primarily to reduce taxes is ||necessarily invalid. I'm not sure there's such a "law" (in the sense of a section of the Internal Revenue Code); I believe it's a principle of interpretation of the Code which the American courts use. In Canada, by contrast, the technical wording of the statute is what controls the law. A recent Supreme Court of Canada decision upheld the principle that, within certain limits, it's quite acceptable to take steps or enter into transactions whose sole purpose is the minimization of tax. (Of course, this is always subject to specific anti-avoidance provisions, of which the Income Tax Act has many.) Dave Sherman The Law Society of Upper Canada Toronto -- {utzoo pesnta nrcaero utcs hcr}!lsuc!dave {allegra decvax ihnp4 linus}!utcsri!lsuc!dave
dfi@ihuxo.UUCP (Dan Iuster) (02/20/85)
> Question: What's the difference between big difference between SOs > living together and SOs married? > IRS: The married ones are poorer because they get to pay more taxes. > > My SO and I were married in 1984 (April 15th, as a matter of fact) after > living together for 1.5 years. We decided in that 1.5 years, that we > loved each other and that we wanted to spend the rest of our life together > (how romantic) so we took the next logical step: We got married. > > Well, last week I sat down to do our Joint Tax Return for 1984 and to > my astonishment, I found that we owed an additional $2000 in federal > taxes. Now, when we got married, we changed our W-4 forms to "married, > but withhold at the higher single rate" category. At the rate the taxes > were withheld from our paychecks, it seemed to me that everything should > balance out at year's end. Instead, I find that we must pay $2000 more in > taxes married, than we would pay if we were single (I am taking into > account the deduction for two-earner couples). > > After looking at the tax tables, I figured out that married, we are at > the marginal tax rate of 38%. If we were single, both my SO and I would > be taxed at 30%. But because we are married, we cannot file as single. > There is a category of "married, filing separately" but that tax rate is > even higher than the married rate (I calculated that too). > > It seems to me that something is terribly unfair here. And the > incredible thing is I don't hear anybody else complaining about it. Is > there anyone else out there that has run into the same problems? Is > there anything we can do about it? Any suggestions? Should we get a > divorce? > > (I should have listened to my mother. She told us not to get married.) > > Spike > {ucbvax,ihnp4}!sdcsvax!sdcc6!calmasd!stj Yup, sounds like divorce is the only solution. After all a little piece of paper that says you're married is only a piece of paper. By the way a no fault divorce is only ~$300. Considering the $2000 you are saving the payback period is about 2-3 month. .P.S. Your mother was right. -- ~~~~~~~ / \ Dan F. Iuster / - o \ ihnp4!ihuxo!dfi ( ) | ( ) AT&T Bell Laboratories \ \_/ / ih 6n-427, x2994 \_______/ "Have a nice Day"
js2j@mhuxt.UUCP (sonntag) (02/20/85)
> In article <2297@mit-hermes.ARPA> jpexg@mit-hermes.ARPA (John Purbrick) writes > || The couple who got divorced each year ended up losing their case; there > ||is a law that any transaction clearly intended primarily to reduce taxes is > ||necessarily invalid. Under that definition, why wouldn't opening an IRA or buying tax-exempt bonds be illegal? -- Jeff Sonntag ihnp4!mhuxt!js2j "Have SEX with a beautiful, LIVE girl!" - from a pamphlet from the church of the subgenius.
jpexg@mit-hermes.ARPA (John Purbrick) (02/20/85)
> The marriage tax is based on the premise that >we all live as working-husband-and-housewife couples. The rationale is that >husbands could avoid paying tax at higher rates by diverting half their income >to their wives, so the two would each pay at a lower rate. | Why do some people think two wage earning families are penalized | with respect to one wage earning families? | Should a two income family pay less tax than a one income family | given that both families have identical incomes? | Why? I said two-income couples are penalized, and I think so because it's true: if A and B each earn $20000 a year, they pay a lower fraction of their income in taxes than they would if they were a couple with a joint income of $40000. Do you think that this causes them to pay less in Social Security taxes, as their joint income takes them over the top salary for contributions? Fat chance. Someone said that the laws were set up the way they are because congressmen (if I'd meant congresspeople, I'd have said so) mostly have economically dependent wives; that's probably right. Why are you introducing a suggestion that two-income couples might ever pay less tax? The discussion was about whether it's just that they should pay more. There have been mentions of common-law marriages here: has there ever been a case of the IRS telling a couple that they were married when the couple said they weren't, and never had been? John Purbrick decvax!genrad!mit-eddie!mit-hermes!jpexg jpexg@mit-hermes.ARPA
slack@wxlvax.UUCP (Tom Slack) (02/20/85)
> "Common-law" marriage (there's no such thing, it's just a media > term used for living together) does not entitle either half > of the couple to claim the other. You have to be married to > claim the unused portion of the spouse's basic deduction. > It may be true that if you have no marriage certificate then you cannot claim a deduction for your spouse, however "common-law" marriages have existed long before our income tax amendment. This is evident in case of abandonment. A person can claim a common-law marriage and get benefits (if she can find him). Also, I have heard it is simpler (in some states) to file for a license stating that you are already married after some time living together than it is to ask for a marriage license to get married if you are not. I am not advocating this, by the way. It seems fraught with legal tangles. All I am saying is that the legal definition does exist, and has existed for a long time. Media has little to do with it. Tom Slack By the way, in some states the bigamy laws also acknowledge common law marriages.
slack@wxlvax.UUCP (Tom Slack) (02/20/85)
> In article <2297@mit-hermes.ARPA> jpexg@mit-hermes.ARPA (John Purbrick) writes: > || The couple who got divorced each year ended up losing their case; there > ||is a law that any transaction clearly intended primarily to reduce taxes is > ||necessarily invalid. > > I'm not sure there's such a "law" (in the sense of a section of the > Internal Revenue Code); I believe it's a principle of interpretation > of the Code which the American courts use. > > In Canada, by contrast, the technical wording of the statute > is what controls the law. A recent Supreme Court of Canada > decision upheld the principle that, within certain limits, > it's quite acceptable to take steps or enter into transactions > whose sole purpose is the minimization of tax. > (Of course, this is always subject to specific anti-avoidance > provisions, of which the Income Tax Act has many.) Also, I have recently read of a case where the court ruled that it was the right (even the obligation) of the individual to try and pay as little tax as possible within the law. And because of this it is difficult for the IRS to impose stiff penaulties for minor infractions unless they can prove intent to defraud. Tom Slack
david@tekig.UUCP (David Hayes) (02/21/85)
> The US income tax is supposed to be a progressive tax. The idea is that > those who afford it should pay more than those who can't. A married couple > with two incomes of ~$30K pay more than twice as much as a single person > earning $30K--- but they pay much less than a single person earning $60K. > The couple pays more because they can afford to pay more. > > There is no such thing as a marriage penalty. The penalty is against single > people, and has been for as long as I've been paying taxes. > > Michael Esco > Boeing Aerospace First of all, a progressive tax does more than increase taxes for those who make more money. If the tax rate was flat, a percentage, then this would also make for a progressive tax, however, I think 50 percent is a little much for high wage earners. (oppressive?) You say there is no marriage penalty, however, if I were just living with a friend, the total tax paid by the two would be less than if the two were married. So what is the variable here? MARRIAGE!! Now maybe you want to tax folks by a different method, like a tax per household income, then that would be different, however, here in this country we tax individuals, the rate is determined by whether or not they are married. I think I'll adopt my wife, that ought to take care of the problem. Dave Hayes Tektronix
ajf@pyuxa.UUCP (A Figura) (02/21/85)
>John Purbrick writes: > The couple who got divorced each year ended up losing their case; there > is a law that any transaction clearly intended primarily to reduce taxes is > necessarily invalid. WHAT? Surely you jest about this "law"! E.g., I currently rent a very nice apartment, in a vary nice complex, for a reasonable amount of $. I like my apartment, and I don't, in general, like to move. However, my current situation (a single, "upwardly-mobile", young professional) results in my paying mucho-kilobucks in income tax each year. Thus, my calcualtions have shown me that I can no longer afford to ignore the tax breaks that home ownership provides. So I've decided to buy a townhouse. Now, in my case, I don't need a bigger or better home; I don't necessarily want to move; I don't necessarily want the hassles, maintenance, etc. involved with a house. I only want to save on my taxes. Thus, in my case, it is obvious what my "clear and primary intention" is for buying a townhouse. Are you telling me that because of this, the IRS will nullify my purchase or (worse) disallow my deductions? I can see some transactions (like an annual divorce) being a little questionable and probably invalid (and justly so). But nullifying ANY transaction that's primarily intended to reduce taxes? Not even the IRS could be that arbitrary? :-) And what about my IRA? I don't necessarily like the idea of putting away $2000 each year where I can't access it, even in case of emergency (except at a great penalty). Even if it is a "retirment" account, I'd much rather have the money be a little more available in case I really needed it. But, because of the tax break it provides, I still have an IRA account. Thus, my annual transaction to add to my IRA is clearly intended primarily to reduce my taxes. Does that make my IRA tax deduction invalid? If there is such a "law", then a lot of people are in for a nasty surprise from the IRS, including: - people (like me) who buy a house and take deductions on it - people (like me) who open IRA or Keogh accounts - people (like me) who buy (tax-free) municipal bonds - investors who take a voluntary capital loss to reduce taxes - people who have almost any other kind of tax shelter - businesses which claim ACRS deductions or investment tax credits - single-income couples who got married solely to take the additional $1000 personal exemption for the non-working spouse ;-) - etc. If there is such a law, I think I'm in big trouble! And, I think a good number of other USENETters are in the same boat! I wonder if there are any federal prisons with a link to the NET, so we can all keep in touch after we get locked up for tax evasion? :-)
esco@ssc-vax.UUCP (Michael Esco) (02/22/85)
> > There is no such thing as a marriage penalty. The penalty is against single > > people, and has been for as long as I've been paying taxes. > > > > Michael Esco > > Boeing Aerospace > > You say there is no marriage penalty, however, if I were just living > with a friend, the total tax paid by the two would be less than if > the two were married. So what is the variable here? MARRIAGE!! > > Dave Hayes > Tektronix Don't get me wrong folks, I'm not defending our (in the US) tax structure. But most people in this country must like it or else it would be replaced. If people want a progressive tax, they should be willing to live with it. I don't like progressive taxes, but I like even less to hear people whine about how unfair it is to *them*. I especially dislike hearing them say they want to eliminate the "Marriage Penalty" by raising the single rate in relation to the married one: don't penalize me for *really* being single. I think the major sticking point in this debate is terminology. Should unmarried couples living together be called (and taxed as) singles? Let's call them posslq's (and tax them appropriately). Don't complain about a marrige penalty-complain about the posslq loophole. Michael Esco Boeing Aerospace PS- I believe the IRS looks upon divorces for tax purposes about the way the INS views marriages of convenience.
kalm@ihuxw.UUCP (James ) (02/22/85)
> I'm curious as to why people think [. . .] two wage earning families are penalized > with respect to one wage earning families? > Later, > Peter Barbee One reason is that they BOTH pay into a FICA account (up to about $2660 apiece), although only ONE of those accounts will pay off, if any! (The insurance companies would be a lot richer than they are if they could pull that one off). The fact of the matter is that many families now NEED two pay-checks in order to provide BASIC care for all members. Some people work a full and a part-time job, or in other cases both husband and wife must bring in an income. Often even these do not provide the necessary insurance for their and their children's health needs. -- Jim Kalmadge - AT&T Bell Labs IH 4b409 8-367-4325 (312) 979-4325 ihuxw!kalm
ron@brl-tgr.ARPA (Ron Natalie <ron>) (02/22/85)
> I think I'll adopt my wife, that ought to take care of the problem. > Wait until the police arrest you for having sex with your daughter.
berry@zinfandel.UUCP (Berry Kercheval) (02/25/85)
In article <445@ssc-vax.UUCP> esco@ssc-vax.UUCP (Michael Esco) writes: >[Speaking of US Tax structure]... >But most people in this country must like it or else it would be replaced. HAHAHAHAHA. But shouldn't this be in net.jokes? Funniest thing this week... -- La musique est une science qui veut qu`on rit et chante et dance. -- Guillaume de Machaut Berry Kercheval Zehntel Inc. (ihnp4!zehntel!zinfandel!berry) (415)932-6900 (kerch@lll-tis.ARPA)
jpexg@mit-hermes.ARPA (John Purbrick) (02/25/85)
> >John Purbrick writes: > > The couple who got divorced each year ended up losing their case; there > > is a law that any transaction clearly intended primarily to reduce taxes is > > necessarily invalid. A. Figura rightly objected to the above (see quote at end). Where I said "intended primarily" I should have said "intended solely". Of course, we do all kinds of things _primarily_ to reduce our taxes, and this is govt policy, as the tax system is used to "persuade" people to do "desirable" things, such as supporting housewives. What is not allowed, though, is a sham transaction which can have no purpose but to exploit tax loopholes, and if there isn't explicitly a law about this there certainly is a body of legal precedent that effectively does the same thing. An annual divorce and remarriage is an excellent example of what isn't allowed. The IRS isn't (usually) arbitrary; you just have to understand their style of logic. decvax!genrad!mit-eddie!mit-hermes!jpexg jpexg@mit-hermes.ARPA > WHAT? Surely you jest about this "law"! E.g., I currently rent a very nice > apartment, in a vary nice complex, for a reasonable amount of $. I like my > apartment, and I don't, in general, like to move. However, my current situation > (a single, "upwardly-mobile", young professional) results in my paying > mucho-kilobucks in income tax each year. Thus, my calcualtions have shown > me that I can no longer afford to ignore the tax breaks that home ownership > provides. So I've decided to buy a townhouse. > > Now, in my case, I don't need a bigger or better home; I don't necessarily > want to move; I don't necessarily want the hassles, maintenance, etc. > involved with a house. I only want to save on my taxes. Thus, in my case, > it is obvious what my "clear and primary intention" is for buying a townhouse. > > Are you telling me that because of this, the IRS will nullify my purchase > or (worse) disallow my deductions? I can see some transactions (like an > annual divorce) being a little questionable and probably invalid (and justly > so). But nullifying ANY transaction that's primarily intended to reduce taxes? > Not even the IRS could be that arbitrary? :-) > > And what about my IRA? I don't necessarily like the idea of putting away $2000 > each year where I can't access it, even in case of emergency (except at a great > penalty). Even if it is a "retirment" account, I'd much rather have the money > be a little more available in case I really needed it. But, because of the > tax break it provides, I still have an IRA account. Thus, my annual transaction > to add to my IRA is clearly intended primarily to reduce my taxes. Does > that make my IRA tax deduction invalid? > > If there is such a "law", then a lot of people are in for a nasty surprise > from the IRS, including: > - people (like me) who buy a house and take deductions on it > - people (like me) who open IRA or Keogh accounts > - people (like me) who buy (tax-free) municipal bonds > - investors who take a voluntary capital loss to reduce taxes > - people who have almost any other kind of tax shelter > - businesses which claim ACRS deductions or investment tax credits > - single-income couples who got married solely to take the additional > $1000 personal exemption for the non-working spouse ;-) > - etc. > > If there is such a law, I think I'm in big trouble! And, I think a good > number of other USENETters are in the same boat! I wonder if there are > any federal prisons with a link to the NET, so we can all keep in touch > after we get locked up for tax evasion? :-) *** REPLACE THIS LINE WITH YOUR MESSAGE ***
ajf@pyuxa.UUCP (A Figura) (02/26/85)
Re: <403@wxlvax.UUCP> by Tom Slack: > "common-law" marriages have existed long before our income tax > amendment. This is evident in case of abandonment. > A person can claim a common-law marriage and get benefits > (if she can find him). ^^^ ^^^ What if *she* is the abandoner and *he* has to try to find *her*?
ian@loral.UUCP (Ian Kaplan) (02/26/85)
One point that no one mentions is that a two-earner family puts twice as
much effort (more or less) into earning that combined annual salary than a
one-earner family. My SO and I work a total of > 80 hours/week for the
priviledge of paying more federal taxes and twice as much social security
tax as a one-earner family. (By "work", I mean income producing activities.
Please, no flames about househusbands/wives and work. I cook, clean house,
and raise the minature human too.)
And because we must both work to survive in today's economy (no more free
rides for spouses except if you're rich) we must pay for childcare
($100/week) which is an added expense that a one-earner family normally
does not have.
(I'm not bitchin' about today's economy here. Only about the marriage
penalty.)
{"I should have listened to my mother. She told me not to get married.",
"I should have listened to my mother. She told me to marry money."}
Spike
{ucbvax,decvax,ihnp4}!sdcsvax!sdcc6!calmasd!stjpitaro@savax.UUCP (pitaro) (02/26/85)
> Question: What's the difference between big difference between SOs > living together and SOs married? > IRS: The married ones are poorer because they get to pay more taxes. > > It seems to me that something is terribly unfair here. And the > incredible thing is I don't hear anybody else complaining about it. Is > there anyone else out there that has run into the same problems? Is > there anything we can do about it? Any suggestions? Should we get a > divorce? IRS: Don't worry. We're changing the laws now so that SOs living together will pay the higher tax rate. (And you thought we'd lower the married rate. HAHAHA)
brooks@lll-crg.ARPA (Eugene D. Brooks III) (02/27/85)
> PS- I believe the IRS looks upon divorces for tax purposes about the way the > INS views marriages of convenience. But if you stay (divorced,married) there is not much the (IRS, INS) can do about either. Boy, what a predicament this could turn out to be!
laura@utzoo.UUCP (Laura Creighton) (02/27/85)
I'll just complain about taxation -- period, thak you... Laura Creighton utzoo!laura
koomen@rochester.UUCP (02/27/85)
From: Hans Koomen <koomen> Why not just tax individuals irrespective of their marital status, and allow any individuals to file jointly? In other words, if person X files a 1040, then X can include any other individuals Y who agree to file jointly, where including means adding Y's income, and subtracting Y's deductions (including standard). Any Y's included except offspring under 18 must provide SS# and sign X's 1040. Surely it would be fairly easy for the tax folks to check that any Y's included on a 1040 do not file a 1040 themselves. This has the benefit of simplifying things, and make it more equitable for everyone. I can include my dear old great-grandmother whom I give $x/month if she agrees. Of course, it is NOT up to the government to make sure I'm actually supporting her! Two consenting adults ... Any comments? Would this get out of hand? Would we get tax brokers looking for human tax shelters? If we do, so what? Or should there be a ceiling on the number of allowable inclusions other than offspring? -- Hans (Koomen@Rochester.ARPA or ...!rochester!koomen.UUCP) PS. I still think that the way to go is to abandon income tax altogether in favor of a national, combined federal, state and local VAT (with total percentage fixed constitutionally). No exceptions, loopholes, etc.; IRS only hassles bussinesses, not individuals; forces all low-income subsidies (and cuts thereof) to be explicit.
stj@calmasd.UUCP (Shirley Joe) (02/27/85)
In article <ssc-vax.445> esco@ssc-vax.UUCP (Michael Esco) writes: > > . . . I especially dislike hearing them say they want to >eliminate the "Marriage Penalty" by raising the single rate in relation to the >married one: don't penalize me for *really* being single. . . I don't remember anyone saying that. Besides, that wouldn't really solve the problem. That would just raise taxes, which is what the current administration wants to do. >I think the major sticking point in this debate is terminology. Should >unmarried couples living together be called (and taxed as) singles? Let's >call them posslq's (and tax them appropriately). Don't complain about a >marrige penalty-complain about the posslq loophole. Boy, I'd like to see the IRS try to enforce that! What about roommates of the opposite sex? What about motss? I can just see the IRS auditing you and asking about your sex life! I don't think they would touch that with a ten or twenty foot pole. > Michael Esco > Boeing Aerospace Women have only recently become a major power in the American work force. This is attributed to high inflation and the womens liberation movement in the '70's. Because of this, there is still a relatively small percentage of families that are affected by the so-called "marriage penalty." This percentage is growing steadily because women are finally attaining earning power equal to their male counterparts. The "marriage penalty" affects those couples who earn comparable incomes much more than it affects the "executive-husband/part-time-worker-housewife couple". I think that more and more couples will be affected in the future as more and more husbands and wives become equal earners. Then perhaps the laws will change, because after all, we are a democratic society. (Aren't we?????). -- Spike {decvax,ucbvax,ihnp4}!sdcsvax!sdcc6!calmasd!stj
gregbo@houxm.UUCP (Greg Skinner) (03/01/85)
>> WHAT? Surely you jest about this "law"! E.g., I currently rent a very nice >> apartment, in a vary nice complex, for a reasonable amount of $. I like my >> apartment, and I don't, in general, like to move. However, my current situation >> (a single, "upwardly-mobile", young professional) results in my paying >> mucho-kilobucks in income tax each year. Thus, my calcualtions have shown >> me that I can no longer afford to ignore the tax breaks that home ownership >> provides. So I've decided to buy a townhouse. >> Now, in my case, I don't need a bigger or better home; I don't necessarily >> want to move; I don't necessarily want the hassles, maintenance, etc. >> involved with a house. I only want to save on my taxes. Thus, in my case, >> it is obvious what my "clear and primary intention" is for buying a townhouse. I take it that, unless you are a highly-paid consultant (as opposed to the general flavor of AT&T or Bellcore employee) that you are in the same tax bracket as I am. True, I'm paying more taxes than I think I should be paying, however I don't see that as reason enough to buy a house. The hassles involved in raising the cash and/or getting the loans approved, finding people to live with you, dealing with the various utility people, etc. are just too much for me right now. Also, unless you are permanently settled (which most yuppies aren't), it just doesn't pay to buy a house unless you can get rid of it quickly. I do mind somewhat paying the rent that I pay ($490/month) but my landlord deals with all the little things other homeowners deal with (water, heat, plumbing, etc.). At this point in my life I have enough to do without taking care of a house also -- I'd like to keep it that way until I am more secure and settled. You say that you have IRA/Keogh accounts and various other ways to reduce your taxes. That seems like enough to me. I dunno ... I haven't filled out my tax forms yet so I may be in for a shock (!!) but otherwise, I don't see how right now you are buying a house mostly due to taxes. Of course, if you really want a house, by all means get one. If you can find some other yuppies to throw in with you, that's even better. I was told by a friend of mine that the best way for yuppies to go into housing ventures is together. -- ... hey, we've gotta get out of this place, there's got to be something better than this ... Greg Skinner (gregbo) {allegra,cbosgd,ihnp4}!houxm!gregbo gregbo%houxm.uucp@harvard.arpa
stj@calmasd.UUCP (Shirley Joe) (03/01/85)
In article <loral.793> ian@loral.UUCP (Spike) writes: > >{"I should have listened to my mother. She told me not to get married.", > "I should have listened to my mother. She told me to marry money."} > My apologies to my SO. Being married to you is definitely worth the extra $2000/year to the IRS. -- Spike {decvax,ucbvax,ihnp4}!sdcsvax!sdcc6!calmasd!stj
eugenez@azure.UUCP (Eugene Zinter) (03/01/85)
> > Question: What's the difference between big difference between SOs > > living together and SOs married? > > IRS: The married ones are poorer because they get to pay more taxes. > > > > It seems to me that something is terribly unfair here. And the > > incredible thing is I don't hear anybody else complaining about it. Is > > there anyone else out there that has run into the same problems? Is > > there anything we can do about it? Any suggestions? Should we get a > > divorce? > > > IRS: Don't worry. We're changing the laws now so that SOs living > together will pay the higher tax rate. (And you thought we'd lower > the married rate. HAHAHA) Perhaps it would help to write AND phone your government representatives about this. If only a few people complain, who cares? But if hundreds of thousands complain loudly AND often enough---since many government officials LIKE to be re-elected, something might be modified. Taxes should be made MORE equal. If this were done, then it would be cheaper to be married because two people share the cost of housing, etc. rather than a single person battling it out. I suppose that's the sick logic as to why married couples are taxed higher. That is---since they are financially ahead of a single person, they can be taxed more. As a simple example, I pay $335/month for my apartment. If I were married and my wife worked, we could split it and I would only have to shell out $167.50 per month. This would save me $2,010 dollars LONEe, not counting the saving in electricity, phone, etc. Thus, I suspect the government has seen fit to try to grab the savings from the married couples. Does this make sense to those with experience in this subject??? Eugene C. Zinter
rs55611@ihuxk.UUCP (Robert E. Schleicher) (03/06/85)
> One point that no one mentions is that a two-earner family puts twice as > much effort (more or less) into earning that combined annual salary than a > one-earner family. My SO and I work a total of > 80 hours/week for the > priviledge of paying more federal taxes and twice as much social security > tax as a one-earner family. (By "work", I mean income producing activities. > Please, no flames about househusbands/wives and work. I cook, clean house, > and raise the minature human too.) > > And because we must both work to survive in today's economy (no more free > rides for spouses except if you're rich) we must pay for childcare > ($100/week) which is an added expense that a one-earner family normally > does not have. > > (I'm not bitchin' about today's economy here. Only about the marriage > penalty.) > > {"I should have listened to my mother. She told me not to get married.", > "I should have listened to my mother. She told me to marry money."} > > Spike > {ucbvax,decvax,ihnp4}!sdcsvax!sdcc6!calmasd!stj *** REPLACE THIS LINE WITH YOUR MESSAGE *** There have been a lot of misconceptions about the "marriage penalty" on the net lately. A working couple do pay more social security than a single earner couple, assuming that the caps on social security are exceeded. However, the income tax paid by a two-earner couple with X total income is the same as the tax paid by a single-earner couple with X total income (actually a little less due to the working couple deduction, the ability to have higher IRA contributions, etc.) Furthermore, a married couple (1 or two earners) with X income pays appreciably LESS tax than a single person with X income. (Check the tax tables.) This in effect recognizes the added expense of the traditional arrangement of having one earner in a couple. The only marriage penalty is that a couple in which each person earns about X/2 dollars (for a total income of X) pays higher taxes than are paid by two single people with an income of X/2 each. This is an almost unavoidable by-product of a progressive tax structure, in which doubling your income results in a more than doubling of your tax bill. Thus, except for a compromise solution like we now have, there are only two ways to eliminate the marriage penalty: 1. Eliminate the progressivity in our tax rates (probably not too likely) 2. RAISE the taxes for married couple with one earner to be the same as that on a single person with the same income (ie, use the same tables). Then, every earner just pays the taxces on their earnings, regardless of marital status. This eliminates the penalty by making everyone pay the same penalty (in effect). Each of these has some fundamental problems. Bob Schleicher ihuxk!rs55611
dyb@unc.UUCP (Kent Dybvig) (03/07/85)
The marriage penalty becomes apparent when you consider the individuals.
What it really boils down to is that a member of a two-earner marriage
pays more federal income tax for a given income than any other individual.
Each individual pays a higher rate than he/she would if single or married
to a nonworking spouse. For example, if I earn $30k and I am:
(a) single, I pay approximately $5782 in income tax
(w/std deduction + $1000 personal deduction)
(b) married to a nonworking spouse, I pay approximately $4321
(std + $2000 personal deduction)
(c) married, spouse earning $30k, I pay approximately $6729
(std + $2000 personal + $2500 working couples deduction)
It is clear, then, that I am taxed at a higher rate when my spouse
works than if my spouse did not work or I were single. Does this
mean I am truly worse off financially? Perhaps yes, perhaps no --
there are extra expenses we incur and other expenses we share.
But if we had never gotten married, we'd both be paying at the rate
in (a) instead of the rate in (c), so it costs us the difference to
be married.
Kent Dybvig
...decvax!mcnc!unc!dyb {Usenet}
dyb.unc@Csnet-Relay {ARPANET}barry@ames.UUCP (Kenn Barry) (03/08/85)
> Thus, except for a compromise solution like we now have, there are only two > ways to eliminate the marriage penalty: > > 1. Eliminate the progressivity in our tax rates (probably not too likely) > 2. RAISE the taxes for married couple with one earner to be the same as > that on a single person with the same income (ie, use the same tables). > Then, every earner just pays the taxces on their earnings, regardless > of marital status. This eliminates the penalty by making everyone > pay the same penalty (in effect). Third possibility: allow everyone, married or not, to file separate returns. Then those couples who get a bad break from joint returns will have an alternative, whether or not they are married. - From the Crow's Nest - Kenn Barry NASA-Ames Research Center Moffett Field, CA ------------------------------------------------------------------------------- USENET: {ihnp4,vortex,dual,hao,menlo70,hplabs}!ames!barry
jpexg@mit-hermes.ARPA (John Purbrick) (03/08/85)
> A married couple (1 or two earners) with X income pays appreciably > LESS tax than a single person with X income. (Check the tax tables.) This > in effect recognizes the added expense of the traditional arrangement of > having one earner in a couple. > > The only marriage penalty is that a couple in which each person earns about > X/2 dollars (for a total income of X) pays higher taxes than are paid by > two single people with an income of X/2 each. This is an almost unavoidable > by-product of a progressive tax structure, in which doubling your income > results in a more than doubling of your tax bill. > > Thus, except for a compromise solution like we now have, there are only two > ways to eliminate the marriage penalty: > > 1. Eliminate the progressivity in our tax rates (probably not too likely) > 2. RAISE the taxes for married couple with one earner to be the same as > that on a single person with the same income (ie, use the same tables). > Then, every earner just pays the taxces on their earnings, regardless > of marital status. This eliminates the penalty by making everyone > pay the same penalty (in effect). > > Each of these has some fundamental problems. > > Bob Schleicher > ihuxk!rs55611 You assume that a married couple are "one flesh" and should be taxed as a unit, hence one's income is both's income. It doesn't seem to bother you that X and Y, married, are going to pay more taxes than X and Y, single. A Canadian told us that up there the tax code makes no distinction by marital status--why can't we do the same? And why didn't you offer that as an alternative? It would continue to subsidize some married people (though your alternative 2 denies this) because we'd still be supporting the housewife lifestyle--she'd be deductible as a dependant and get Social Security distributions when her husband retires/dies. John Purbrick decvax!genrad!mit-eddie!mit-hermes!jpexg jpexg@mit-hermes.ARPA
andrea@hp-sdd.UUCP (andrea) (03/11/85)
Our experience is that two people cannot successfully share (for a long
period of time) the space that one person lived in happily.
Example: single engineers around here tend to buy condos when they are
looking for both a home and a tax break. Most of those condos don't
work for two people who have hobbies, sports interest, and a lifetime's
worth of books and brickabrack. So couples end up buying a house -
and the monthly payment for the typical 3bed/2bath house around here is
just about double the monthly payment for the typical 1-2 bedroom condo.
Two people eat two people's food, wear two people's clothes, use two
people's worth of medical services and transportation, etc. - we have
not noticed any breaks. In fact, our insurance costs went up because
we added each other to our individual car insurance.
You better believe I resent Uncle Sam charging us $2-3000/year for the
privilege of filing a little piece of paper in the state capitol. But
I am not optimistic about anything happening about it. The amount of
money they'd lose would be phenomenal, and when was the last time you
saw the government voluntarily give up revenues?
Andrea Frankel, Hewlett-Packard (San Diego Division) (619) 487-4100 x4664
net: {allegra|ihnp4|decvax|ucbvax}!hplabs!hp-sdd!andrea
...searchlights casting for faults in the clouds of delusionjpexg@mit-hermes.ARPA (John Purbrick) (03/12/85)
> My tax-man told me you could file Schedule W iff you filed joint returns. Is > this true, or should I get a new tax-man ? I would like to file separately, >because my wife qualifies for a medical deduction (5% of her income - expenses > > 0). > > Perry Scott, HP-FSD Don't kill the bearer of bad news! Your tax man is right, you must indeed file jointly if you want to use Schedule W. John Purbrick decvax!genrad!mit-eddie!mit-hermes!jpexg jpexg@mit-hermes.ARPA
ark@alice.UUCP (Andrew Koenig) (03/16/85)
Andrea Frankel says: > You better believe I resent Uncle Sam charging us $2-3000/year for the > privilege of filing a little piece of paper in the state capitol. But > I am not optimistic about anything happening about it. The amount of > money they'd lose would be phenomenal, and when was the last time you > saw the government voluntarily give up revenues? The last time was in 1981, shortly after Reagan was first elected. The legislation he proposed, that was later enacted, reduced the tax rates by 25%. I don't hold out much hope of the marriage penalty going away soon, though. After all, many people believe that the Reagan administration took care of that one too, as part of the tax cuts. What was actually enacted was that married couples with two wage-earners can deduct 15% of the smaller income. Big deal. But you'd be surprised how many otherwise well-informed people think the penalty has gone away!
perry@hp-dcde.UUCP (perry) (03/18/85)
> The one bright spot is "Deduction for earned income when both spouses >work"; it allows you to deduct 10% (I think) of the lower-paid spouse's salary >from your joint income, but you will undoubtedly end up losing versus being >single. > > John Purbrick > decvax!genrad!mit-eddie!mit-hermes!jpexg > jpexg@mit-hermes.ARPA My tax-man told me you could file Schedule W iff you filed joint returns. Is this true, or should I get a new tax-man ? I would like to file separately, because my wife qualifies for a medical deduction (5% of her income - expenses > 0). Perry Scott, HP-FSD ...{allegra|ihnp4|decvax|ucbvax}!hplabs!hpfcla!perry-s
dgh@sun.uucp (David Hough) (03/20/85)
In article <3471@alice.UUCP> ark@alice.UUCP (Andrew Koenig) writes: >Andrea Frankel says: >> ... and when was the last time you >> saw the government voluntarily give up revenues? > >The last time was in 1981, shortly after Reagan was first elected. >The legislation he proposed, that was later enacted, reduced the >tax rates by 25%. If you think back, the promise was that tax revenues would actually increase enough to balance the budget and pay for the Reagan defense buildup. All this was supposed to be the result of the stimulus the economy received as a result of the lower tax rates. But as it happened, Voodoo Economics was not notably more successful than other kinds, and every year since then, there's been a Reagan tax INCREASE, to (you guessed it) balance the budget and pay for the Reagan defense buildup. David Hough