Doing My Taxes

You hate doing your taxes, right? I do too, but I also like it. I find myself playing with various tax tables. I prefer the paper ones that smell of newsprint. But I settle for the on-line ones and print the ones that I really want to get close to.

Today’s output from this time-waster: America has achieved a flat, totally regressive income tax. I knew it, but now I know it for real. It took some effort, because there is no table for the capital gains tax, the one rich people pay. You have to find the right form to figure out the rates and brackets.

Wealthy people, most of whom get the bulk of their income from dividends and appreciation of stocks, bonds and other investments, (rather than salary) pay only 15% income tax. This "capital gains" tax rate was first slashed to 20%, then more recently down to 15%. (It’s even lower – 5% -- at modest income levels.)

So the wealthy pay the exact same 15% tax rate that I pay. Along with other modest-income folks. We have a flat tax, except for the poor. And consider this: The right wants to lower the capital gains down to zero; I haven’t heard the Democrats counter by proposing to raise it. Could I soon be in a higher tax bracket than the Fords and DuPonts?

I don’t know whether to laugh or cry. So I move on to my State Forms.

I find a cool chart with all 50 states compared.

Michigan is one of six states which has a flat income tax (3.9% flat rate). Four of these Worst Six are so-called blue states: Massachusetts, Pennsylvania, and Illinois, along with Michigan. Blue means what now, exactly? We have to register our guns? Could we trade that gun thing for a progressive tax?

Nearby Ohio has a steep progression, from .7% to 7% (the latter starts at $200K adjusted gross income). California has brackets from 1% up to 9%. Do ya think all the movie stars will re-locate to Livonia? Some states (including Tennessee) tax only dividends and capital gains, not wages. The most conservative state in the USA, Utah (70% for Bush), has tax brackets from 2.3% to 7%. We need more Mormons around here. Maybe not, I don’t want to have to go to Toledo for beer. And I need one right now.

I gotta get out of these damn tables.