One of the miraculous things about the Obama candidacy is that we can support him for months--whether by giving, volunteering, standing on our respective internet soapboxes and shouting our views to the heavens, or merely voting--and then find out something new about him or his platform that makes us fall in love all over again.

Believe it or not, Obama has a serious plan to help restore Americans' confidence that old age will not leave them destitute. If the war incites my generation's outrage like nothing else, then surely the thought of what awaits us at the end of our working lives triggers our despair more than Armageddon itself (for us, after eight years of George W. Bush, Armageddon is the mere stuff of Will Smith movies).

Retirement is the issue so ugly for us that even the contemplation of it dispirits us before we even consider actual solutions. Thinking about it provokes a dread that overwhelms reason. Hope is pretty alien to this territory.

(More of my anti-DD rants :-) )

I don't know why I go ever there.  Perhaps it's the occasional good article by Todd or Chris.  Ever the glutton for punishment, I head over there today and what do I see?  Jerome complaining that Obama is hypocritical.

In his classic baseball book Ball Four, former MLB pitcher Jim Bouton entitled the Appendix to the book "Tell Your Statistics to Shut Up."  While Bouton was reflecting his frustration with his obtuse Seattle Pilots (now Milwaukee Brewers) manager, I have always loved that title as a reflection of the attitude of those who refuse to accept the truth, even when it is presented to them in irrefutable black and white.

I use the title now to present the statistical truth which refutes the lies of George W. Bush, John McCain, Charles Gibson and other right-wingers regarding Capital Gains, the Stock Market, and Ordinary Americans.

Read more.

Amidst the current economic downturn, states legislatures across the country are faced with some of the tightest budget crunches in recent memory.  According to theCenter on Budget Policy and Priorities,There are currently 20 states facing a combined budget shortfall of $35 billion in 2009, with 8 more projected to enter the red in 2010.  With over half the country’s states facing immanent deficits and the rest struggling to stay in the black, the temptation in most statehouses has been to "tighten up the belt," slashing spending on crucial social services and trimming back the public workforce wherever possible.

This slapdash strategy is  a recipe for disaster.  At a time when private spending is already plummeting, laying off state workers and cutting off help to those in need is the last thing our ailing economy needs.  A far more humane and farsighted solution would be to seize the current economic challenges as an opportunity to create a fairer tax system; one  that would increase state revenues, extend help to those most in need, and ask corporations and the wealthy to do their fair share to help the country through tough times.

Welcome to Frugal Fridays where we share money saving tips, discuss living frugally and generally talk about personal finance issues.  I'm a terrible procrastinator, so I haven't started my taxes yet at all, but I know that some people are already started (or even finished) so I figured I better not delay any longer before writing a tax help diary.  If it turns out that I learn anything surprising and helpful when I actually do my own taxes, I may come back to this topic later.  

It's time to trot out my standard disclaimer:
I am not a financial professional.  I'm just a consumer who tries to be educated.  Take anything I say with a grain of salt.

Today I took the time to read through Barack Obama's Blueprint for Change. Much of it I agree with wholeheartedly; some of it I agree with with reservations. There is one thing in it that bothers me, though, and it's a beef I have with many politicians, not just Obama. And that is the apotheosis of the "middle class," which I am not convinced is a useful category anymore.

Instead, I believe it's better to think in terms of four socioeconomic categories that reflect actual financial circumstances rather than social aspirations: poverty, subsistence, comfort and luxury.

Uniform Definition of a Child A boyfriend can now claim the dependency exemption of his girlfriend's child (retroactive to 2005, amend those returns!) IF the girlfriend is not required to file a tax return AND either does not file a return or files only to obtain a refund of overwithheld income taxes. If she files to get EIC whether or not she claims her children, then he cannot claim her children.  It appears to be possible to voluntarily give up a claim to EIC and file solely for refund of overwithheld taxes.  There are other wrinkles to the new dependency rules, so you should consult a tax advisor if your situation seems out of the ordinary (whatever that means).

A shocking ballot initiative in Massachusetts shows both the contuining Reagan legacy in shaping politics and the failure of the Clinton era to bring an end to the Reagn anti-government narrative.

According to the IRS, in 2001 tax cheats failed to pay $353 billion in income taxes they owed. That's a huge number—almost $1,200 per man, woman and child—and I doubt it's gotten smaller during Bush II's reign.

You don't really see anybody up in arms about it, though, do you? According to David Cay Johnston's terrific 2003 book, Perfectly Legal: The Covert Campaign to Rig Our Tax System To Benefit the Super Rich - and Cheat Everybody Else, there's a bipartisan "gentleman's agreement" in Congress to not push too hard on tax enforcement. Any bets on who owes the bulk of that $353 billion? Somehow I doubt it's destitute waitresses failing to report a couple of hundred bucks in tips.

But I digress. Obviously, the government could really use that $353 bil, and I know how to get it...

Yesterday I posted a question diary, "Is a Flat Tax Viable? (Statistician Needed)". It got only one recommendation for posting, but it stirred up a lot of discussion.

What I had sought was someone to spell out numerical details as to why a flat tax sytem could/couldn't work in this country. I got a lot of gut responses, for the most part. But, I did get a lot of interesting comments that make sense regarding, basically

It's not the tax rates that's confusing & costly, it's deciding what to count as income.

(more over the fold)

OK, I'm last the person you'll hear saying that I think we are overtaxed, especially in my family's income bracket.  I'm all for a true progressive tax system, provided the money is spent wisely (another debate for another time).

But my lastest discovery and foray into the wonderful world of the federal tax code has left me a little hot under the collar.  And it has to do with the little thing called the Alternative Minimum Tax (AMT) that we hear so much about.

OK, I'm looking for a little professional help here. And, no, not as in "a psychiatrist", though some of you may disagree ;-)>

I've found this link on the IRS web pages. It's a multitude of Excel spreadsheets with the statistics of incomes, returns and taxes submitted in prior years to the IRS.

Here's what I'm trying to figure out (and I'm not sure all of the necessary data is there to do this) ...

I'm trying to determine if a flat tax would save this country money and headaches.

(more over the fold)

Woohoo! Two more months to procrastinate!

Over the weekend, I gathered together my various financial records, such as they are, for the hideously unpleasant task of actually filing my income tax return. Back in April, I thought about doing my return, but was seduced by a slinky Form 4868, batting its eyelashes and promising me four whole months to goof off, if only I paid what I guesstimate I will owe in the end. I've been down that road before; in fact, it's the exception to the rule if I file in April. Why, I remember "back in the day" when Form 4868 was a full page! Now it's just name, Social Security number, and what you think you owe, clean and efficient, down to a third of a page. As a kid, I was notoriously tight-fisted with my money, so my parents were somewhat surprised that it's not so much the paying tax that I object to as the damned paperwork. I was quite surprised, though, to find out that what used to be a four-month extension is now six months. I have all the way until October to file!

  The corporation is a relatively new economic structure that has displaced individuals, partnerships and, in some cases, the state itself (think of Exxon Mobil in Nigeria), as the major engine of social development. This has been a mixed blessing in that it has enable all kinds of products and services to come to market that might not have otherwise been possible, but on the other hand, it has also contributed to the growing gap between the rich and all the rest of society...a gap that is a dagger aimed at the heart of any government claiming to be a democracy in anything other than name only. Following is some ways to tweak the corporate structure to better serve the long term intested of society at large.

The key fiscal policy at the heart of the progressive movement (and most of the Democratic Party) is a progressive income tax. Wealthy people should pay more of their income and poorer people should pay less of their income in order to create economic opportunity for all and place the tax burden to finance our governments on the shoulders of the people who can most afford it.

In order to raise taxes on high incomes (above $200,000 annually, as an example), we need the ability to impose a progressive income tax rate. The federal government has this ability, thanks to decades of advocacy from progressives several generations ago. Some states do. My state of Illinois does not, and neither does Michigan.

The Democratic Speaker of the Michigan House is looking to change that and asking voters to amend the constitution. This is a very good thing and something we civic-minded progressives ought to support and embrace.

Having just filed your income tax returns you might be interested: recently The Wall Street Journal had a series recently purporting to prove that the wealthy pay MORE than their share of taxes.

There were a number of things wrong with their argument:

By "We"  I mean those of us with incomes in seven figures and wealth in eight (dollars only, please)  And "We" includes our virtual brothers, the multinational corporations who provide our funds, who have an interest in increasing those clauses in the tax code disparaged with the term, "loophole."  

We can only go so far by lowering the published tax rate of those of us whose hard work, diligence and honesty has enabled us to realize the American dream of perpetual wealth---(What "estate tax" it's a "death tax.")  It looks like we only have another two years of clout in Washington to seal what we have gained, so we better get these benefits deeply entrenched so they can't be rooted out by the mob who will be taking over in '09.  The trick is to do this below the public's radar, but that G_d damn New York Times, may have spilled the beans.

It's that time of year again. Uncle Sugar has his hand out looking for your $$$. I absofreakinglutly despise the income tax in this country. I am the quintessential McUSA citizen. And I wouldn't even think about trying to do taxes without assistance.  Normally I stress reality over philosophy, but on taxes I can be just as irrational as anyone