Let me tell you how it will be
There’s one for you, nineteen for me
Should five percent appear too small
Be thankful I don’t take it all
It’s That Day once again in the US, when the bill for living here comes due. Unless you work under the table, or your income comes from capital gains and you’ve had previous offsetting losses, or you just decide that you aren’t going to pay income tax. We haven’t – yet- reached the point where there’s a 95% tax bracket, although if you make enough, and live in a high tax state, you could pay upwards of 53% of your income in state and Federal taxes. Only Denmark, Sweden, and Portugal are higher, and not by much. On the other hand, the minimum personal income tax in Denmark is nearly 37%, compared to 0% in the US. Most of the Middle Eastern oil states don’t levy a personal income tax. Of the places you might actually want to live, Switzerland has a 13% maximum rate.
I paid my annual taxes last week, and didn’t get bitten as hard as I had feared, but paying my Q1 taxes today was a far different story. I’ve owned several cars that cost less than the amount on the check I wrote to the Feds. Yes, I had a good Q1, and I did make the money, but sending it all in at once was still painful. This is exactly why Federal payroll withholding was introduced in 1943. There was a war to pay for, and instead of having people write increasingly large annual checks to the government, it was rightly decided that people wouldn’t object so much if a little bit was taken out every pay period.
I was actually thinking ahead to next year, when most people in the US will have to indicate whether they have health care insurance on their Federal tax forms. I find this extremely objectionable, and don’t plan on doing so. I know that there are penalties for not complying with the law, but I wondered what the penalty was for not filing a tax return.
There may be a loophole.
The penalty for failing to have health care insurance will be $96 for an individual in 2014. This rises to $235 in 2015 and tops out at $695 in 2016. As best I can determine, the penalty for not filing a tax return, assuming the taxpayer isn’t in arrears, is $135. The IRS is focused on collecting unpaid tax, so most penalties are some percentage of the unpaid amount. If the tax payments are current, then they can have the $135. Starting in 2015, it’ll be cheaper than the insurance penalty.
I’m not in any way a tax or legal expert, so if you elect to go this route, you’re on your own. Note that I advocate paying the taxes owed, I just don’t think it’s anyone else’s business whether I have health insurance, and I resent being told I have to buy a product as a condition of drawing breath. I expect to have a major medical policy this year, and we’ll see if that satisfies the Feds. If not, then that’ll be an interesting day.
Today in History
1738 – Bottle opener invented
1850 – City of San Francisco incorporated
1861 – Federal army (75,000 volunteers) mobilized by Pres Lincoln
1865 – Pres Lincoln shot by John Wilkes Booth at Ford’s Theater
1900 – An early 50 mile race is won by an electric car in over 2 hrs
1910 – Taft is 1st pres to throw out a 1st ball at a baseball game
1912 – Titanic sinks at 2:27 AM off Newfoundland as band plays on
1947 – Jackie Robinson goes hitless in his major league debut
1952 – Franklin National Bank issues 1st bank credit card
1955 – Ray Kroc starts McDonald’s chain of fast food restaurants (Illinois)
1997 – Baseball honors Jackie Robinson by retiring #42 for all teams