Archive for March, 2008

March Tax Bite

March 31, 2008

Social Security: $499.10
Medicare: $116.72
Federal Income: $636.88
Virginia Income: $400.14
Communications: $7.07
Utilities: $5.93
Week 9: $0.70 (partial week)
Week 10: $175.37
Week 11: $23.71
Week 12: $59.97
Week 13: $15.21
Week 14: $3.93 (partial week)

Total: $1,944.73
Year-to-date total: $10,861.06

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Maryland’s Troublesome ‘Tech Tax’

March 30, 2008

Last year, Maryland lawmakers slapped a 6 percent sales tax on computer services in a special legislative session. The tax caused an outcry and now lawmakers are rethinking it because “the tax is more trouble than it is worth.”

Dropping the tax will cost the state $200 million it can’t afford, however, so officials will have to find a solution. Another tax — raising the income tax on people making more than $1 million a year — is an option, but the encouraging news is that lawmakers also are looking instead at ways to … cut spending. Imagine that!

Maybe one day the tax hikers will realize that most taxes are more trouble than they are worth and start reining in the profligate spending all across America.

Tomorrow’s Online Music Tax

March 29, 2008

The latter part of this quote from an article in Portfolio.com is overblown: “It’ll be a government-approved cartel that collects money from virtually everyone — often without their knowledge — and failure to pay their tax will ultimately result in people with guns coming to your door.”

But the underlying criticism of a proposal to add a $5 fee to people’s Internet service in order to license music downloads is on the mark. It’s a horrible idea, another hidden tax that would punish people who don’t use the Internet to download music just because the music industry has stubbornly resisted changing its business models for the 21st century.

Tax Bite, Week 13

March 29, 2008

It’s amazing how much money you can save on taxes a week when you cut back on driving and don’t have to buy groceries. This week’s numbers compared with last week’s, for instance, really show what an impact government has on the family pocketbook. Less taxation with representation!

UPDATE: I take it all back. I just found another receipt in the checkbook. Kimberly did go grocery shopping this week, boosting that tax from 3 cents for the week to $3.14.

March 23-29
Gasoline: $7.23
Groceries: $3.14
Eat-In/Other: $3.37
Sales: $1.47

Weekly total: $15.21
Year-to-date total: $9,193.78
(includes monthly tax bite)

Render Unto Uncle Sam And Aunt Virginia

March 29, 2008

The men in our congregation have been gathering one Saturday morning a month for devotionals. We also usually go out for breakfast at the IHOP near the church building after we meet.

Today was the day for this month’s devotional, and we made that breakfast run. I ordered the breakfast sampler, a feast that added 41 cents to our family tax bill. The good news is I won’t be hungry the rest of the day.

I suppose I shouldn’t complain about taxes after a Bible study. After all, Jesus himself said to “render unto Caesar the things which are Caesar’s.” Uncle Sam prints the money, so he and Aunt Virginia are entitled to their cut.

On the other hand, God blessed America with a democracy that gives us the freedom of speech — and the freedom to blog. Unlike Caesar, Uncle Sam and Aunt Virginia welcome whining and complaining. I wouldn’t want to disappoint them.

Terminating Taxes

March 29, 2008

Gov. Arnold Schwarzeneggar, who long ago abandoned his pretense of being even a moderate Republican, is wavering in his commitment to terminate tax proposals in California:

Aides contend that the governor has kept his word on that key GOP issue by raising fees, not taxes. But the fees he has backed — including some amounting to billions of dollars that were included in his failed healthcare plan — are essentially the same thing, say many Republicans and antitax groups.

The governor, who in January promised, “I will not raise taxes on the people of California,” later said he agreed with the nonpartisan legislative analyst’s suggestion that the state collect more tax money by cutting or reducing some “loopholes.”

This month, he said “everything is on the table” in budget negotiations with the Capitol’s dominant Democrats. He cited as an example a demand by state Senate President Pro Tem Don Perata (D-Oakland) to increase sales taxes.

Exercise May Be Bad For Your Financial Health

March 27, 2008

Well, it will be in Rhode Island if Democratic Rep. Arthur Handy gets his way. He has proposed expanding the sales tax to include health-club memberships, as well as expensive clothing, landscaping and legal services.

I love this quote from Gov. Donald Carcieri: “All they’re doing is taxing just about everything that moves.”

The good news is that even Handy’s own party doesn’t support his plan. If he can’t win the backing of tax-and-spend Democrats, his odds seem pretty slim. The bad news is that Carcieri, a Republican, is open to the idea of more fees.

I Always Vote ‘No’ On Tax Initiatives

March 27, 2008

So should the voters of Shrewsbury, Mass.

Stand firm. Don’t let the bureaucrats browbeat you into higher taxes by throwing ballot initiative after ballot initiative at you until you finally cave:

Even though they have rejected every request for a Proposition 2-1/2 override put before them, Shrewsbury voters will again be asked to approve a $1.5 million proposal that would eliminate some school fees and potentially save jobs.

The call for the tax increase is slated for the May 6 town ballot.

Last May, a $5 million override was narrowly rejected, 5,568 to 5,160, in an election that drew 52 percent of Shrewsbury’s registered voters. In 2004 and 2005, overrides were rejected by large margins. The town has never approved raising taxes by overriding Proposition 2-1/2, a state law that limits annual increases to 2.5 percent of a community’s total tax levy.

A Revolutionary Idea

March 25, 2008

Florida is considering a Taxpayer Protection Amendment that “would force politicians to get voter approval for any new tax or fee on both the state and local level.”

We, the people representing ourselves by deciding whether we want higher taxes or fees? How Revolutionary! On the other hand, it’s an awfully sad statement about America today that taxpayers need “protection” from the people they elect to represent them responsibly.

America’s Tax Place In The World

March 24, 2008

The United States is a world leader when it comes to corporate taxation — and that’s not a good thing. We rank No. 2 among developed countries, and nearly half of U.S. states have corporate tax rates higher than top-rated Japan.

The Tax Foundation has the scoop in a new report. (Hat tip to Instapundit)

Lest you say “I don’t care about corporate rates as long as the government isn’t taxing me personally,” remember the business world’s penchant for passing the tax bucks along to consumers.

You eventually pay the tax bill in the form of higher prices on goods and services. That truism is most obvious at the gas pump but also on utilities, communications and other bills. Big Business can escape the tax man; Joe Six-Pack of Soda can’t.

A Complex And Voracious ‘Tax Machine’

March 23, 2008

That’s what New Jersey has built, according to this analysis:

Within a single generation, New Jersey has built one of the most complex, voracious and extensive tax machines in the nation to support its spending.

The $50 billion fusion of sales tax, income tax, property tax and a variety of fees, from those collected from beach badges to tire recycling, touch almost every aspect of daily life in the Garden State.

Note to self: Never move to New Jersey.

Tax News Roundup

March 23, 2008

I didn’t find the time to blog the tax news last week, so here’s a roundup of links to some of the tidbits sent my way via Google news alerts:

Gas taxes aren’t high enough for Rep. John Dingell, D-Mich. His twisted fantasy is to raise them 50 cents a gallon. But his ultimate goal is to cut gas consumption, so that’s OK, right? More frightening are the polls results showing that “28 percent would pay up to 50 cents [a gallon] more, 10 percent would pay more than 50 cents and 8 percent would pay more than a dollar.” Are those people insane?

— Ah, the old raise-fees-instead-of-taxes shell game. Politicians sure do love to play it.

— Residents of Montgomery County, Md., here in the D.C. region are facing a jump in property taxes of as much as 8 percent. Residents in neighboring Prince George’s County also could see higher taxes.

— There must be something in the New Jersey water. In Swedesboro, higher taxes could cost residents another $400 a year. The school board in Salem wants to increase the school tax rate by 4 cents. And East Brunswick is seeking a state waiver so it can increase a proposed tax levy. But wait, is it true that Middletown is actually thinking of trimming taxes? What a bunch of mavericks!

— Fort Wayne, Ind., Mayor Tom Henry wants to raise local income taxes on his constitutents.

— Mayor John Moak of Newburyport, Mass., is eyeing a presumably temporary tax hike to cover school costs and “other” projects. Temporary — yeah, right.

— Think your taxes are bad? Have sympathy on the folks who live in Princeton, Wis., where the bureaucrats want to slap a tax hike of 87 percent on residents.

— Here’s a bit of encouraging news, at least from the perspective of an anti-tax guy like me: “Despite the dire [budget] conditions, only a handful of states are seriously considering general tax increases or even modest hikes on the wealthy to close the gaps. Lawmakers say they fear such actions would only further stress the economy.” Guess what they’re doing instead? Cutting spending. What a novel idea!

— More good news: New Castle County Executive Chris Coons is taking a break from two straight years of tax hikes. Officials in Hopkinton, Mass., actually voted against a tax hike. And some people in Virginia will get a tax-hiking reprieve, too.

Big Government a victim? I don’t think so. (Hat tip to Marginalizing Morons)

— I like to see bureaucrats looking for ways not to increase taxes further instead of the opposite.

— Smart voters like those in Loveland, Ohio, just say no to tax hikes — even when it means cutbacks at schools.

Tax Bite, Week 12

March 22, 2008

March 16-22
*Gasoline: $7.57
Groceries: $5.13
Eat-In/Other: $5.97
Sales: $41.97

Weekly total: $59.97
Year-to-date total: $9,178.57
(includes monthly tax bite)

* I worked from home two days this week, and my parents have been playing chaffeur to the family in their van. We’re also a one-car family for now, so the burden from gas taxes should be a little less for a while.

Taxing The Shirt On My Back

March 22, 2008

When I was at Men’s Wearhouse yesterday, Kimberly and Elli picked out a purple shirt to go with the purple-and-black tie Elli had found for me. I vetoed the choice of shirts — but only because of the $50 pricetag. As I told the salesmen, no self-respecting redneck pays $50 for a shirt!

So today, I did what any self-respecting redneck does when on the quest for Sunday-go-to-meetin’ clothes: I went the J.C. Penney in Manassas and found a shirt that looks just as nice for about $20.

I also bought two other dress shirts while there because my white-collar working wardrobe hasn’t changed much in the past three years or so. It’s time for a little colorful variety. Add the dress socks and a second tie because of a great sale and the tax bill came to $5.35.

Tax Day Is Just Around The Corner

March 22, 2008

Yes, it’s that time of year again, when the bureaucrats of the IRS and the Virginia Taxation Department force average Dans like me to spend hours upon hours completing tax form after tax form.

I worked through some of the forms earlier this year to estimate our bill or refund. But after realizing that we’ll actually owe a small amount of money to the IRS, I delayed the final run-through until yesterday. It took me four-and-a-half hours to complete all of the forms! Every time I thought I was making progress, I hit a line that directed me to a new form.

Part of that is because we are able to claim the adoption tax credit. The paperwork to get that credit, and the related “additional child tax credit,” is particularly egregious and mind-boggling. I’ve always been tempted to hire an accountant and save myself the headaches, but I suffer through it to save a few hundred bucks.

I also have to complete a bunch of extra forms because I registered one of my blogs, AirCongress, as a limited liability corporation. I hired an accountant to complete those forms for me last year, but this year I saved a little money by doing the work myself, with the forms from last year as a guide.

My work on income taxes this year won’t be included as part of the 2008 annual tally for this blog because it was for the tax year 2007. But here are the totals, in case you’re curious: $404 in federal income taxes (almost non-existent because of the adoption credit and our mortgage interest and other itemized write-offs) and $2,915 in state income taxes.

Uncle Sam would have taken $5,161 from us if not for the adoption credit. We’ve now exhausted that benefit from our 2005 adoption of Catie and will have to pay the full federal tax amount minus itemized deductions for 2008. That’s actually a good thing for purposes of this blog because it will result in a more accurate picture of the federal tax bite.