Skip to main content

Tax showdown: Dante Atkins v. Mitt Romney
When Ted Nugent saw the title of this week's endeavor, he was momentarily excited. Until, that is, he found out that the last words were "class tax return" instead of "school girl." But I digress.

On April 17, millions of Americans found themselves relieved—not just of the burden of having to worry about tax returns for another year, but also of some of their money, which was due and payable to the Internal Revenue Service. Others, perhaps more fortunate, found themselves filing returns documenting the refunds owed to them. Tax policy has, of course, become a frequent public policy discussion recently: terms like "effective tax rate," "Buffett Rule," and "payroll tax extension" keep on being thrown around, and those of us with less familiarity than others may have a hard time understanding what it's all about. So in honor of tax day, I shall use my own tax return to document why progressive tax reform is exactly what we need right now. As a side benefit, I also get to have a head start on releasing my tax returns for when I run for president in 20 years (just kidding). And along the way, we get an answer to the question: who paid a higher share of his income in taxes? Dante Atkins, or Mitt Romney?

I'm what could be considered a typical middle-class taxpayer. Last year, I used a form 1040A to process my federal tax return. I use this form because my taxes are too complicated to use the much shorter 1040EZ, but not so complicated as to need the full form 1040. Last calendar year, I made a total of $49,500. Most of this income came from two jobs. In addition to that, I received a comparatively much smaller amount in what's called "non-employee compensation." What's the difference? Well, when you're a regular employee of a business, you automatically have income and payroll taxes deducted from your regular paycheck. When you're an independent contractor, you don't. That income is still taxable, but you just have to count on paying whatever taxes are owed when you file your return, as opposed to having it withheld for you by your employer. But the bottom line is, I had three "jobs"—which, in the words of George W. Bush, makes me uniquely American.

I'm just a renter, so I don't get to claim the types of mortgage-interest deductions that homeowners use to significantly lower their tax bills—I get to claim the so-called "standard deduction" that just about everybody gets, and that's about it. After factoring that in, the IRS said that for the year, I owed $5,256 in federal income taxes. Fortunately for me, my employers had withheld much more than that from my paychecks over the course of the year and sent it to the IRS on my behalf: a total of $6,074. This means that whenever the IRS gets around to processing my return—and provided I did all of my math correctly—I will end up receiving a refund of $818, and will end up having paid a hair over 10.6 percent of my income in federal taxes.

But that's not the end of the story—it could have been substantially higher. You see, during the course of the year, I had saved up enough to be able to contribute $3,500 to an Individual Retirement Account, or IRA for short. Because of how the tax code works, any amount I contribute to an IRA every year (in my case, up to a limit of $5,000 for the 2011 tax year) is deductible from my income, meaning I don't have to pay taxes on it. These IRA's can usually be invested either in FDIC-insured cash deposits or in securities, as you see fit. Put another way, the government will pay you to put more money in the hands of the banks—money that I won't be able to access without penalty for another 30 years, but that the banks can use right away to make more money for themselves. Consequently, even though I made $49,500 last year, I only owed taxes as if my income were $46,000. The difference between those two tax bills? $875. The government literally paid me $875 to invest my own money. If I hadn't made those IRA contributions, I would have ended up owing money, instead of getting back a comparatively substantial refund—and I would have ended up paying around 12.4 percent of my income in federal taxes.

Now, even 12.4 percent doesn't seem very high. So given my income tax rate, why would someone like me complain that when someone like Mitt Romney pays an effective tax rate of about 13.9 percent? The answer lies in the fact that federal income taxes aren't the only federal taxes I pay. Like most everyone else who gets paid wages, I also pay Social Security and Medicare taxes—payroll taxes, for short. The tax rate for these doesn't fluctuate: it's 4.2 percent for Social Security, and 1.45 percent for Medicare. Not that these taxes are equitable either: In 2012, only the first $110,100 of wages will be taxed for Social Security and Medicare. That means that I pay payroll taxes on all of my income, but someone who makes a million a year pays those taxes on only a tenth of that.

All in all, I ended up paying $2,754.38 in payroll taxes in 2011. When you combine that with the income tax owed, you end up with $8,010.38, resulting in a total effective tax rate of roughly 16.2 percent.

Let's finalize this point: as it is, I pay a larger share of my income in federal taxes than does Mitt Romney. Remember that Mitt Romney pays virtually nothing in payroll taxes, because the type of capital gains income that Mitt Romney makes isn't taxed for Social Security and Medicare. Even worse, that discrepancy would have been even larger if the government hadn't paid me to set aside my money in ways that allow people like Mitt Romney to grow even wealthier. That system is fundamentally unfair. This is exactly why we need fixes like the Buffett Rule and the payroll tax extension that President Obama fought so hard for: the average American taxpayer deserves to know that someone in Washington realizes that Mitt Romney shouldn't be paying a smaller share of his income than someone like me.

Your Email has been sent.
You must add at least one tag to this diary before publishing it.

Add keywords that describe this diary. Separate multiple keywords with commas.
Tagging tips - Search For Tags - Browse For Tags


More Tagging tips:

A tag is a way to search for this diary. If someone is searching for "Barack Obama," is this a diary they'd be trying to find?

Use a person's full name, without any title. Senator Obama may become President Obama, and Michelle Obama might run for office.

If your diary covers an election or elected official, use election tags, which are generally the state abbreviation followed by the office. CA-01 is the first district House seat. CA-Sen covers both senate races. NY-GOV covers the New York governor's race.

Tags do not compound: that is, "education reform" is a completely different tag from "education". A tag like "reform" alone is probably not meaningful.

Consider if one or more of these tags fits your diary: Civil Rights, Community, Congress, Culture, Economy, Education, Elections, Energy, Environment, Health Care, International, Labor, Law, Media, Meta, National Security, Science, Transportation, or White House. If your diary is specific to a state, consider adding the state (California, Texas, etc). Keep in mind, though, that there are many wonderful and important diaries that don't fit in any of these tags. Don't worry if yours doesn't.

You can add a private note to this diary when hotlisting it:
Are you sure you want to remove this diary from your hotlist?
Are you sure you want to remove your recommendation? You can only recommend a diary once, so you will not be able to re-recommend it afterwards.
Rescue this diary, and add a note:
Are you sure you want to remove this diary from Rescue?
Choose where to republish this diary. The diary will be added to the queue for that group. Publish it from the queue to make it appear.

You must be a member of a group to use this feature.

Add a quick update to your diary without changing the diary itself:
Are you sure you want to remove this diary?
(The diary will be removed from the site and returned to your drafts for further editing.)
(The diary will be removed.)
Are you sure you want to save these changes to the published diary?

Comment Preferences

  •  The tax rate for these doesn't fluctuate (6+ / 0-)

    Well uh yeah except they did for this year.

    •  What doesn't fluctuate (1+ / 0-)
      Recommended by:

      is that Romney evidently pays no Social Security/Medicare taxes on his $10M or so a year in income.

      Because his income is not like most everybody else's income -- carried interest, capital gains, dividends, interest, etc. -- but not wages and salaries, that are subject to regular income tax rates, and another 8 percent or so for SS and Medicare.

      Great catch on that, Dante.

      As a half-billionaire, Romney will never need Social Security and Medicare the way the 99 percent will.

      But that he doesn't pay into those essential social programs, while giving $1M or so tax-deductible to the Mormon Church every year, is really remarkable.

      Hopefully, the Obama campaign, and the national media, will recognize that this is an issue that really matters to taxpayers who are not multi-millionaire Wall Street tax evaders.

      A public option for health insurance is a national priority.

      by devtob on Sun Apr 22, 2012 at 06:34:06 PM PDT

      [ Parent ]

      •  not income. (1+ / 0-)
        Recommended by:

        Get the law changed.  The House needs more Dems, and the Senate could use a few more too.

      •  Social Security & Medicare (1+ / 0-)
        Recommended by:
        Ed in Montana

        Actually I'd be willing to bet that at some point in his life Mitt did pay into SS & Medicare and is now vested.  This means that he will collect from these programs, even though he only paid into them for 10 years.  Meanwhile as a self employed person I have to pay both halves (employer & employee which means I pay more than Bill Gates or Warren Buffet or Mittens)  until I'm 65.  Such a deal!

    •  A factoid correction - Medicare tax has no cap (2+ / 0-)
      Recommended by:
      Zack from the SFV, elfling

      So FICA stops at 106 and change, but Medicare tax keeps going and going.  So it is actually rather inequitable at higher incomes, and why higher earners would have good reason to bristle at " means testing" for something that that have paid into at a far higher rate than low earners.

      The Elephant. The Rider. The Path. Figure those out and change will come.

      by Denver11 on Sun Apr 22, 2012 at 09:41:12 PM PDT

      [ Parent ]

      •  Otoh, I'm betting that the higher up (0+ / 0-)

        one gets on the income scale, the less of a percentage "wages" are in one's income, as we see in Romney's return. Your concern for the welfare of unfairly treated Medicare tax payers is duly noted, however.

        "Lone catch of the moon, the roots of the sigh of an idea there will be the outcome may be why?"--from a spam diary entitled "The Vast World."

        by bryduck on Mon Apr 23, 2012 at 08:40:04 AM PDT

        [ Parent ]

        •  You know, explaining someone's thought (0+ / 0-)

          process is not necessarily worth throwing sarcasm.

          My ex-mother-in-law was easily making 6 figures when she retired.  She paid into Medicare her whole working life.  She feels just as entitled to Medicare benefits as anyone else.  In her mind, why should she get fewer services just because she also has investment income?

          I don't agree with her, but I see her point of view.  Vilifying her won't get her on our side, understanding her might make compromise possible.

          People like Mitt, who were born with a silver spoon (or is it foot?) in their mouth think about money differently than people like my ex-mother-in-law who remembers the depression vividly, worked very hard her whole life to make sure she wasn't a burden on her family when she retired.  She doesn't think about Medicare as a percentage of her income paid in tax while she worked.  She thinks of it in total amount over n-years buying a guaranteed benefit.  Reducing a benefit that she paid for isn't going to seem fair to her; just as taking away a pension from a union doesn't seem fair to me.

          •  But she isn't getting fewer services, is she? (0+ / 0-)

            She's getting the same Medicare as anybody else, no?
            I apologize for being snide; if you had explained more fully, I would certainly not have jumped to my conclusion about your motives.

            "Lone catch of the moon, the roots of the sigh of an idea there will be the outcome may be why?"--from a spam diary entitled "The Vast World."

            by bryduck on Mon Apr 23, 2012 at 10:11:20 AM PDT

            [ Parent ]

            •  Not if we start means-testing Medicare /eom (0+ / 0-)
              •  Exactomundo .... (0+ / 0-)

                All of my income comes from taxable wages, and I pay without complaint the same 1.45% of wages into Medicare as the person making much less than I am.  And when both of us are 65, we will both (as it stands now) get the same access to health care services at the same price.  But if you tax the high wage income earner at the same rate as the low wage income earner to cover the same set of services, and THEN on top of that, "means test" that same high earner, you will generate an increased sense of unfairness and "anti welfare-ism" attitudes.

                One could even argue (but I wouldn't), that because poorer health status is correlated with lower incomes, then those with lower incomes should pay a HIGHER percentage of their wages into the Medicare Trust Fund.  [NOTE - I would argue that the far better approach would be to address those issues that lead to poorer outcomes for lower income strata by ensuring (i.e. insuring) early and equal access to preventive, educative and interventional health care to all citizens.]

                The Elephant. The Rider. The Path. Figure those out and change will come.

                by Denver11 on Mon Apr 23, 2012 at 07:50:10 PM PDT

                [ Parent ]

              •  Oh, absolutely. Nowhere do I advocate (0+ / 0-)

                for that . . .

                "Lone catch of the moon, the roots of the sigh of an idea there will be the outcome may be why?"--from a spam diary entitled "The Vast World."

                by bryduck on Tue Apr 24, 2012 at 08:42:18 AM PDT

                [ Parent ]

        •  I think you have to get pretty high up the income (0+ / 0-)

          scale to get to the point you referenc.  I think you will find though that the vast majority of even the 1% are getting their annual income from W-2 wages.  It is only the truly ridiculously wealthy that actually live off of their capital gains and interest income.

          The Elephant. The Rider. The Path. Figure those out and change will come.

          by Denver11 on Mon Apr 23, 2012 at 07:54:34 PM PDT

          [ Parent ]

  •  But Mittens is creating jobs with his money! (13+ / 0-)

    Jobs like multiple nannies to raise his kids; stable hands, groomers and trainers for his family stables; financial consultants and lawyers to hide his money in offshore and Swiss bank accounts; car elevator repair men; and a whole new shift of workers at the Ohio Arts plant to build more Etch-A-Sketches.

    Romney/Sauron 2012 - One Party to bring them all and in the Darkness bind them!

    by Fordmandalay on Sun Apr 22, 2012 at 04:10:07 PM PDT

  •  In a sort of related thought, I wonder if some of (20+ / 0-)

    the reason the republican base is ever-shrinking has to do with their decimation of the middle class.  Not that the people are necessarily blaming them as much as they should - thanks to general media "both sides are responsible for this" blame spreading and the ongoing assault on truth by Fox.  

    We regularly see analyses that say the republicans lose base as the population becomes less white, and as younger people part ways with them on social issues.  But by so strongly supporting the 1% at the expense of the middle class, they're also killing off one of their paths to electoral success.  

    When we had a healthy middle class, it was easier for people to imagine themselves someday being in a higher tax bracket, and even easier to imagine that their kids would do better than they would.  There was more reason to support these lower taxes for higher earners if you could somehow picture yourself being affected someday.  You'd care more about inheritance taxes if you could see yourself actually leaving an estate to your kids.

    Now older people look at their retirement accounts and wonder if it will be enough to get by?  If you're fifty, you're probably figuring you won't be retiring at 65 and just hope you can afford to stop working at 70... maybe.  You don't know if you can count on Medicare.  And God help you if you lose your job over age fifty.

    Younger voters don't see the same job opportunities that existed a generation ago, and are going to have to work a long time paying off student debt before they can ever think of saving for old age.  There isn't the same kind of opportunity as a generation or two ago - you can work your ass off, but it's not going to help you get ahead unless you're one of the anointed few.  

    By cutting so many people off from climbing the economic ladder, the republicans have made it easier to point out the essential unfairness of the system they're supporting.  Will Democrats actually use the opportunity to point that out?

    Well, that's the big question, isn't it.

    •  Doesn't Mattr If Theirs Shrinks If Trnout Does Too (8+ / 0-)

      Those young people for example who helped so much to put Obama over the top stayed home in tragically high numbers 2 years ago, and in addition to them being significantly disenfranchised this year by Republicans, I'm not seeing signs they've re-energized.

      Women shifted Republican 2 years ago, and I just saw a poll showing white women overall support Romney at this moment. So his lead with women would be minority women and they have been a sub energized constituency.

      Are they and more white women going to be energized this year by the war on women? Not if Democrats don't tell them about it.

      We are called to speak for the weak, for the voiceless, for victims of our nation and for those it calls enemy.... --ML King "Beyond Vietnam"

      by Gooserock on Sun Apr 22, 2012 at 04:40:22 PM PDT

      [ Parent ]

      •  Dems are apparently in need of Powdermilk Biscuits (4+ / 0-)

        ... gives shy persons the strength to stand up and do what needs to be done.

      •  New/young voters stayed home (2+ / 0-)
        Recommended by:
        Shockwave, Ed in Montana

        in the 2010 mid-term because they always do.

        They have not yet developed the voting habit, and are not as interested in Congressional races in part because they are moving around.

        The Obama campaign was able to motivate young people in 2008, and the 2012 campaign is surely well aware that they have to work harder to get young people out this year.

        The recent student loan interest-rate messaging will help.

        As will, IMHO, the inequality messaging.

        Like you pay more in Social Security taxes than Romney.  

        A public option for health insurance is a national priority.

        by devtob on Sun Apr 22, 2012 at 06:58:56 PM PDT

        [ Parent ]

  •  Filing a tax return, such as we know them, (10+ / 0-)

    is in some ways "uniquely American". Most civilized countries deal with taxes as automatic deductions and returns are not filed.

    Personally, I would prefer just having it taken out. Were our tax system streamlined, and deductions simplified so that the tax can be calculated before your paycheck is ever issued, things would be easy.

    We often hear the cry that doing this would put accountants and tax men and women out of business. Baloney. What it would do is make sure people like Mitt Romney pay their fair share.

    Santorum: Man on Dog; Romney: Dog on Car. Ren and Stimpy: Dog on Cat

    by commonmass on Sun Apr 22, 2012 at 04:18:19 PM PDT

  •  There is another factor for the 1% (15+ / 0-)

    and that is not all of their income is taxed.
    Normally someone in Mitts income range has their company pay for their car, phone, computer, other computer, office supplies, many meals and travel expenses, etc., etc. etc.  He takes a ream of paper home for the kids and all is good, the janitor does it and it is theft.
    Then there are the many many deals made that never make it on any books.  Having worked commercial construction for many years, I have seen the sweetheart deals to clients.  So those who can afford the most pay the least.

    These capitalists generally act harmoniously and in concert to fleece the people, and now that they have got into a quarrel with themselves, we are called upon to appropriate the people's money to settle the quarrel. Abraham Lincoln

    by Nailbanger on Sun Apr 22, 2012 at 04:19:34 PM PDT

  •  having kids pays (3+ / 0-)
    Recommended by:
    wordene, Angie in WA State, devtob

    If it wasn't for the child tax credit I would have gotten back a few hundred dollars but thanks to a $3000 credit for 3 kids I got back almost $3500 dollars. You realloy get pelized when your kids grow up.

    •  Unfortunately, the Child Tax Credit starts (2+ / 0-)
      Recommended by:
      BachFan, devtob

      to be reduced to nothing as you start getting close to 100K in income.

      On the other hand, if your kids grow up and go to college, there are some deductions for you paying for their tuition and/or loans.

      -8.88, -7.77 Social Security as is will be solvent until 2037, and the measures required to extend solvency beyond that are minor. -- Joe Conanson

      by wordene on Sun Apr 22, 2012 at 04:29:00 PM PDT

      [ Parent ]

      •  There is no deduction for a child's tuition (0+ / 0-)

        The most important way to protect the environment is not to have more than one child.

        by nextstep on Sun Apr 22, 2012 at 06:35:45 PM PDT

        [ Parent ]

        •  hope credit and lifetime learning credit. (1+ / 0-)
          Recommended by:
          Zack from the SFV
          •  American Opportunity Tax Credit (0+ / 0-)

              The Hope Scholarship Credit was the Clinton version. The American Opportunity Credit is the Obama version.

                Every time we get a new Democratic President the education credit gets renamed. Also Obama brought in the Making Work Pay Credit, which was replaced for 2011 and 2012 by the Payroll Tax Holiday.

                I am just glad tax season is over and I get my life back. I am an Enrolled Agent (a type of tax professional) and life gets hectic between late January and mid-April. Being a tax geek is like being a farmworker: you have to peck the apples while they are on the trees...

            Diehard Swingnut, disgruntled Democrat, age 53, new CA-30

            by Zack from the SFV on Sun Apr 22, 2012 at 11:34:31 PM PDT

            [ Parent ]

    •  Think it's still cheaper (1+ / 0-)
      Recommended by:
      wide eyed lib

      .. by a long way! ...  to skip the kids and pay the tax... :-)

      Fry, don't be a hero! It's not covered by our health plan!

      by elfling on Sun Apr 22, 2012 at 11:45:52 PM PDT

      [ Parent ]

  •  Also, the employer pays social security and (4+ / 0-)
    Recommended by:
    BruceMcF, jck, devtob, elfling

    medicare tax; for self-employed persons they have to pay both, thus making their effective tax rate much higher, assuming they don't make more than the social security minimum.  Employed persons effectively pay this tax as well, its just that they don't see it as a tax because it's not written on their statements.  

    The employers however definitely have to pay it, and it amounts to a a tax on hiring someone.  Wonderful tax code we've got there.

    You have exactly 10 seconds to change that look of disgusting pity into one of enormous respect!

    by Cartoon Peril on Sun Apr 22, 2012 at 04:20:31 PM PDT

  •  don't forget all those other taxes such as (2+ / 0-)
    Recommended by:
    chujb, devtob

    sales taxes or for me property taxes and so on which are not progressive and which I have little chance to influence.

    •  Property taxes in NY are (0+ / 0-)

      awful -- $5K a year and up for a basic suburban house.

      They are not based on income, just on the alleged value of the property.

      And they go up every year, by 5 percent or so.

      A public option for health insurance is a national priority.

      by devtob on Sun Apr 22, 2012 at 07:24:20 PM PDT

      [ Parent ]

    •  That's the real killer (1+ / 0-)
      Recommended by:

      It's sales tax that hits the majority of people the worse.

      The claim that there are people who pay no taxes is bunk.

      "The real wealth of a nation consists of the contributions of its people and nature." -- Rianne Eisler

      by noofsh on Mon Apr 23, 2012 at 04:21:52 AM PDT

      [ Parent ]

  •  The government didn't effectively pay you anything (6+ / 0-)

    An IRA or 404K is just a moratorium on paying that $845.  You'lll pay taxes in 30 years when it comes back to you at whatever rate the tax code is in 30 years, which could be higher.

    "Americans, while occasionally willing to be serfs, have always been obstinate about being peasantry."

    by Glinda on Sun Apr 22, 2012 at 04:35:10 PM PDT

    •  Write-offs (1+ / 0-)
      Recommended by:

      Don't forget the EMPLOYER gets to write-off every penny that he pays the EMPLOYEE, these are know as his/her Business Expenses, so by all means if the Employer paid more he could write-off more... This is the great LIE that JOB CREATORS can't have their taxes raised, because they won't have money to pay the EMPLOYEE, because it's all written off.

    •  But you get interest on those deferred taxes ... (3+ / 0-)
      Recommended by:
      Angie in WA State, devtob, elfling

      ... when if those funds were taxed immediately, the taxed portion would be unavailable to earn interest, which is the actual brib... err, "inducement" to park your funds with the bank.

      Support Lesbian Creative Works with Yuri anime and manga from ALC Publishing

      by BruceMcF on Sun Apr 22, 2012 at 05:11:15 PM PDT

      [ Parent ]

      •  Or, if you choose, a mixed fund (0+ / 0-)

        You can lose everything.  The 2000 and 2008 debacles halved the value of the money in my 401K and my investment risk level category was only moderate to low the second time. I am just now getting back to having what I initially put in, which was a transfer from a previous job's. pre-401k retirement account.

        I am no fan of 401Ks.  They're a cash cow for the slimy investment banks.

        I'd rather pay the taxes up front and control my own money.

        "Americans, while occasionally willing to be serfs, have always been obstinate about being peasantry."

        by Glinda on Mon Apr 23, 2012 at 11:30:41 AM PDT

        [ Parent ]

  •  Not really. (9+ / 0-)
    The government literally paid me $875 to invest my own money.
    You are ultimately taxed on this money when you (or your heirs) eventually withdraw it from the IRA.

    So while you might end up paying a lesser tax rate on the money, and you can invest it without it being taxed as it accrues (if it does), you ultimately pay some taxes on that money.

  •  misunderstanding (11+ / 0-)

    "Others, perhaps more fortunate, found themselves filing returns documenting the refunds owed to them."

    They're not more fortunate.  They get a refund because they paid more in taxes than they owed, and so the government had that money as an interest free loan for ±4 months.  

    People who feel fortunate to make interest-free loans can contact me directly.  ;-)

  •  Mitt's"the correct income tax & not a dollar more" (1+ / 0-)
    Recommended by:

    will cost him the election after the cogent and deliberate debate that will happen on his 13 percent taxes paid.

    DID he EARN IT, like the dude for Smith Barney said, WE EARNED IT.

    DID HE EARN IT, GAME SET MATCH for the Billionaires

    80 % of success is showing up

    Corporate is not the solution to our problem

    Corporate is the problem

    by Churchill on Sun Apr 22, 2012 at 04:43:10 PM PDT

  •  OT: "Ted Nugent" should never appear (1+ / 0-)
    Recommended by:

    except in the phrase "confessed child molester Ted Nugent"

    The Internet is just the tail of the Corporate Media dog.

    by Jim P on Sun Apr 22, 2012 at 04:47:00 PM PDT

  •  Thank you so much for this diary, Dante. (2+ / 0-)
    Recommended by:
    Angie in WA State, devtob

    You made the whole thing as clear as can be for me.  Now I can share it with others.

    There are few things more dreadful than dealing with a man who knows he is going under, in his own eyes, and in the eyes of others. Nothing can help that man. What is left of that man flees from what is left of human attention. James A. Baldwin

    by avamontez on Sun Apr 22, 2012 at 04:57:00 PM PDT

  •  Apart from problems with the appalling tax (5+ / 0-)

    structure, it is intimidating to think that someone making above the average salary of a college graduate in the US, responsibly setting aside nearly 10% of their income, could truly struggle in retirement, especially without employer contributions or a pension.  My parents fortunately are not really in this situation, but one large reason my mom continues to work after having plenty of years to retire is because of the health care costs they would face in the interim until medicare kicks in.  

    The Democrats need to focus on and link tax structure, health care reform, and financial regulation as pieces of the same puzzle.  There is no excuse for not letting the Bush tax cuts expire.

  •  You need a tax preparer (5+ / 0-)

    The article is good and the points are well made, but there are some real error in there.. a few too many to go into detail.

    You need some help from a tax preparer.  Not knowing the details, but guessing from what you provided, I'd bet you paid too much. You may need to file an amended return. No rush o that. You have until tax deadline day 2015 to amend this year's taxes.

    I'm not a professional tax preparer, but I did analyze and correct (yes,really) tax returns for the IRS for 7 years.

    Don't pay more than you should. The tax code happily lets folks overpay.

    •  hmmm...would love to know what makes you think so (1+ / 0-)
      Recommended by:
      Zack from the SFV

      I'll contact you.

      oops. I hope the gate wasn't too expensive.

      Twitter: @DanteAtkins

      by Dante Atkins on Sun Apr 22, 2012 at 09:28:18 PM PDT

      [ Parent ]

      •  One mistake you made (1+ / 0-)
        Recommended by:

          is that you filed a 1040A. If you have self-employment (independent contractor) income you need to file a 1040 and also a Schedule C or C-EZ. Using the Sch C allows you to take expenses against your independent income. If you have a net profit of over $400 then you have to file Schedule SE to figure the Self-Employment tax (which is how you pay SS and Medicare taxes on nonemployee income. Part of the SE tax you pay is an adjustment to income (deduction on the front page of the return) for which you also need a 1040, not a 1040A.

             If you have more questions you can contact me, but I will be kicking back in the desert until next weekend. Time to look at wildflowers instead of tax forms...

        Diehard Swingnut, disgruntled Democrat, age 53, new CA-30

        by Zack from the SFV on Sun Apr 22, 2012 at 11:43:54 PM PDT

        [ Parent ]

        •  I should mention that I am a tax geek (0+ / 0-)

            with 22 years of experience. I would be happy to talk taxes with you though I am not especially looking for more work right now. I'll be back in L.A. by May 1.  

          Diehard Swingnut, disgruntled Democrat, age 53, new CA-30

          by Zack from the SFV on Sun Apr 22, 2012 at 11:49:42 PM PDT

          [ Parent ]

  •  As a Couple We're Slightly Above Him Despite (1+ / 0-)
    Recommended by:

    being only 35th percentile in income. The biggest chunk of our income is my sole prop artisan business and of course I must pay both halves of social security tax on that, while I think he pays neither half on all his income from investment.

    We are called to speak for the weak, for the voiceless, for victims of our nation and for those it calls enemy.... --ML King "Beyond Vietnam"

    by Gooserock on Sun Apr 22, 2012 at 05:12:38 PM PDT

    •  That's the great thing about this diary (0+ / 0-)

      It's the first time I've read anywhere that Romney does not pay the Social Security/Medicare tax that the 99 percent pay every week.

      Small business types like you pay twice what employees pay, and half-billionaire Romney pays nothing.

      The Obama campaign has focused on Romney's relatively low income tax rate.

      But at least he's paying some income taxes, while evidently he is paying no Social Security/Medicare taxes at all.

      Maybe the campaign is saving it for October -- a killer TV ad about the rich guy who pays no Social Security/Medicare taxes who wants to kill Social Security and Medicare.

      A public option for health insurance is a national priority.

      by devtob on Sun Apr 22, 2012 at 07:45:18 PM PDT

      [ Parent ]

  •  If you add in the money we pay to private (1+ / 0-)
    Recommended by:
    Angie in WA State

    corporations, like health insurance that people from more civilized countries receive from their taxes, our tax bill is higher yet.

    We get much less for it.

  •  I am a homeowner and I don't (0+ / 0-)

    get to claim the interest as a deduction on my taxes, so don't feel too bad. Not all homeowners get to claim that deduction anymore.

    All knowledge is worth having.

    by Noddy on Sun Apr 22, 2012 at 05:23:14 PM PDT

  •  Why are you "just kidding" about running (1+ / 0-)
    Recommended by:

    for Public Office.

    More importantly, why in the world are you waiting another 20 years to do it!

    You are exactly whom the Left needs to be running in elections now.

    Get 'er done, will ya?


    * * *
    I like paying taxes...with them, I buy Civilization
    -- SCOTUS Justice O.W. Holmes Jr.
    * * *
    "A Better World is Possible"
    -- #Occupy

    by Angie in WA State on Sun Apr 22, 2012 at 05:30:33 PM PDT

  •  Mitt paid more than you... (0+ / 0-)

    Why are you occupied by the percentages? He paid well over $1M in taxes and wasn't the money he used to buy those stocks already taxed?

    •  Mitt's money is mostly in deferred compensation (0+ / 0-)

      Not so much that he's investing his own money and getting some return on it. He's being paid for investing other people's money a long time back.

      Even if it was a result of his cash investment, income made from investment is taxable... and losses are deductible.

      If I pay the plumber to fix my bathroom, I pay him for his labor with my post-tax money, and he pays taxes on it.

      Ironically, if I have a slacker nephew and I give him $5k to do nothing as a gift, that is not taxable to him. If I have him fix my plumbing, it's taxable.

      You can start a business without capital, but you can't start a business without labor.

      Fry, don't be a hero! It's not covered by our health plan!

      by elfling on Sun Apr 22, 2012 at 11:53:17 PM PDT

      [ Parent ]

  •  Since you bring up Ted see vid of his crappy (0+ / 0-)

    draft board experience when he passed up a chance to be patriotic.  Motor City Madman to Motor Mouth Madman.


    Never promote men who seek after a state-established religion; it is spiritual tyranny--the worst of despotism. It is turnpiking the way to heaven by human law, in order to establish ministerial gates to collect toll. John Leland

    by J Edward on Sun Apr 22, 2012 at 05:46:49 PM PDT

  •  I don't believe there's such a thing as a (0+ / 0-)

    "middle class" tax return or any other return based on much of anything.  Every one is unique because our tax code is so voluminous and complex and applies in different ways to different people almost regardless of their income level.

    You made a good point, and I'm not arguing that.  I'm simply saying that people of similar income levels can pay widely varying taxes....

    I pay income taxes in two states and have 6 types of income..none reported on a w-2.  I also keep very close track of every legitimate deduction.   I do my own taxes.  

    Also, as just an example, lots of people have deductible medical expenses or forms of income that get a different treatment than either w-2 or capital gains income...

    The tragedy of our tax system is that it favors the wealthy and it's so complex that most people don't bother to understand the nuances available even if you're not wealthy.

    The longer I live, the clearer I perceive how unmatchable a compliment one pays when he says of a man "he has the courage to utter his convictions." Mark Twain

    by Persiflage on Sun Apr 22, 2012 at 05:47:09 PM PDT

  •  NUm... a disagreement with the premise, not the (1+ / 0-)
    Recommended by:
    johnny wurster

    Big picture. First, your premise is incorrect. Capital gains are profit made from an investment, not earned income. Two, The answer ISN'T a new set of rules for the IRS and taxpayers to figure out (The Buffet Rule). Just raise/alter the cap gains rate/regulations.  It is really rather simple. He isn't paying less fed taxes on actual income. He IS taking advantage of the current regulation. Change the regulation, don't make new ones.

    •  Mitt is working through a loophole (0+ / 0-)

      where many people who work on Wall Street get paid via "capital gains" instead of through a salary, even though their own money is not at risk.

      Fry, don't be a hero! It's not covered by our health plan!

      by elfling on Sun Apr 22, 2012 at 11:54:50 PM PDT

      [ Parent ]

  •  Oh good, financial literacy comes to the DK site (0+ / 0-)

    Because the underlying thesis of the diarist is correct: that the tax code is very skewed toward the rich. It is also, by the way, very skewed to reward rich debt. poor people who pay the predatory interest on credit cards and payday loans get no break & are screwed.

    An empty head is not really empty; it is stuffed with rubbish. Hence the difficulty of forcing anything into an empty head. -- Eric Hoffer

    by MichiganChet on Sun Apr 22, 2012 at 05:49:23 PM PDT

    •  Skewed toward the rich? (2+ / 0-)
      Recommended by:
      MichiganChet, johnny wurster

      I agree, any progressive system is skewed toward having the rich pay more. The only reason I believe it's ok for someone to pay 15% on capital gains is because they already paid 30% income tax on the amount they used to purchase the stock on which they're now collecting dividends.

      •  I think you understand me just fine (4+ / 0-)

        That if you are rich, the tax deck is heavily stacked in your favor. And I pay capital gains tax too.
           I have been filing my own returns from my $7000/year days until now when I make more than 20x that. So I know whereof I speak.
           Yes I am familiar with that argument. It falls apart when you have a substantial portfolio and reinvest the proceeds on which you paid 15% toward the purchase of any security, the profit or dividends thereof will be taxed at. .  .15%. And of course there is the subject of carried interest, which is primarily why the Mittster pays less than 15% on income he never paid personal income rates in the first place.

        An empty head is not really empty; it is stuffed with rubbish. Hence the difficulty of forcing anything into an empty head. -- Eric Hoffer

        by MichiganChet on Sun Apr 22, 2012 at 06:13:32 PM PDT

        [ Parent ]

  •  It's good to see Obama trying to help the 99% (0+ / 0-)


    Perhaps he can call on the White House to stop fighting for more Free Trade Job Outsourcing Deals like the one the White House did in 2011 (of course Obama was powerless to stop the White House).


    There is a reason that Obama's Chiefs of Staff come from Wall Street Banks. And it has nothing to do with Change We Can Believe In.

    by Johnathan Ivan on Sun Apr 22, 2012 at 06:14:56 PM PDT

  •  Great post Dante! (0+ / 0-)

    I lived off my 401K last year, unemployed, and ended up paying a butt load in taxes this year.  It SUCKED!

    I wasn't on public assistance like unemployment, food stamps, etc..., I pulled my weight and got the shit kicked out of me for trying to put my life back in order.

    This was never where I anticipated being at this stage in my life, but forget Mittikens, he doesn't give two sh#ts about anyone but himself.

    Again, thanks for this great post..

    "A weed is a plant whose virtues have not yet been discovered." Ralph Waldo Emerson

    by Yo Bubba on Sun Apr 22, 2012 at 06:37:06 PM PDT

  •  A more accurate calculation (0+ / 0-)

    would add to income the employer's cost of Heath and Life insurance, Social Security and Medicare.  These are all components of the economic value of your compensation.

    Counting Social Security the same as Income taxes is distorted, as the benefits you are eligible to receive are based on what you paid in.  If you are a Tea Party member who believes Social Security is bankrupt and you will never receive benefits then you should add Social Security to Federal Income Taxes.

    When calculating taxes, you should also include the employer portion of Medicare and Social Security taxes.

    Finally if you own state or local income taxes, these should be added as well.  This taxes are not optional and they are a tax on your income.

    The most important way to protect the environment is not to have more than one child.

    by nextstep on Sun Apr 22, 2012 at 06:51:51 PM PDT

    •  What if you know Social Security (0+ / 0-)

      is doing just fine, but expect the republicans to find a way to kill it before you can retire?

      I'm 32, with a big load of student loan debt. Unless something goes really well for me, I don't expect to retire for at least another 33 years. That's an awefully long time for republicans to try to kill it...

  •  When or if you ever retire (0+ / 0-)

    that is when you will pay the taxes on your IRA contributions, plus growth, unless the bible humping circumcised penis heads just steal it from you like they have done twice in the last decade. Fuck them, spend your money on dope and whores just like they did with mine. At least you'll get something for being their bitch.

  •  Pls remind Thugs its the GAINS taxed, as in (2+ / 0-)
    Recommended by:
    lastlegslaststand, bryduck

    capital gains, and so not 'double tax' as the original money put in is by defintion not a gain.  After all, its a capital gains tax.

    Sorry, heard this nonsense yet again on CNN and sick and tired of the stupid and lack of ability to challenge even blatant misuse of English.  

  •  IRAs suck compared to defined pensions (0+ / 0-)

    There is no way in the world that the vast majority of us will ever get as good a return as people used to get from defined pension plans.  The least these right wing bloodsuckers could have done for us is to guarantee some minimal return on our money.  But alas, what we are left with is IRA's, 401K's and annuities which all are paying low interest rates right now.  

    "The real wealth of a nation consists of the contributions of its people and nature." -- Rianne Eisler

    by noofsh on Mon Apr 23, 2012 at 04:18:04 AM PDT

  •  The fraud of mortgage interest deduction (0+ / 0-)

    Since I bought a house nigh on to 10 years ago, the mortgage interest deduction has been a ridiculous slap in the face.

    I'm sure it works out for people with much larger and more expensive homes, but in no year have I ever paid more in mortgage interest than my standard deduction, meaning I probably aught to be renting rather than owning.

    I'm not the only one in this situation either, and it has always irked me that the mortgage deduction is everyone's A#1 go-to argument for home ownership.

    •  Yeah (0+ / 0-)

      When I was looking at houses, the realtor (whom I liked otherwise) had charts showing why buying a home was such a great deal because of the interest deduction, writing off the full amount of the interest + property taxes. I tried pointing out that in my price range, it wasn't likely to amount to much more than the standard deduction, but I'm not sure I got through.

  •  You fool (0+ / 0-)

    Where's your account in the Grand Caymans?

    Only little people pay taxes, to quote Leona Helmsley.

    “I never bought a man who wasn't for sale.” Senator William Clark D-MT 1901-1907

    by Ed in Montana on Mon Apr 23, 2012 at 02:03:05 PM PDT

Subscribe or Donate to support Daily Kos.

Click here for the mobile view of the site