So anybody done with their taxes yet? Did the Obama tax increase slam you? Was it a blip? Or did you make out better than ever?

I won't be done for a couple of weeks at least, but I'll be reporting results here when I'm ready.

Well, I'm done with this years returns. My rate went up from last year, but I'm still in a very sweet spot

Our last 11 years of rates:
2003: 23.6%
2004: 25.8%
2005: 26.3%
2006: 26.4%
2007: 28.4%
2008: 26.5%
2009: 26.5%
2010: 17.7%
2011: 13.1%
2012: 4.5%
2013: 6.45%

The above numbers are calculated as: (Total Tax Paid) / (Adjusted Gross Income). These numbers just include federal tax and does not include state or local taxes.

So to tie it into politics: my Federal average tax rate during the Obama years (2009-2013) was 13.56%
My average tax rate during Bush years as 26.17%. Wha??? But how can that be???

As I explained previously the decline in my rate is due to my own personal circumstances rather than federal policy. Maybe one lesson is that without fundamental reform of the tax code, the only changes that even the Obama tax increases make are at the margins.

Anybody else want to share how the Obama tax increases impacted you?

The whole concept of having to 'do your taxes' is completely alien to me. Tax is just something that comes out of my pay packet automatically each month, I never even think about it.

I think I end up taking home about 3/4 of what I make, but that's just a rough guess.

I thought you were an overpaid member of our bloated public sector? If you move in to the 40% tax bracket you should do a tax return (if not every year, for the first one or two or if things change). I had to do it while I was a councillor as it was a second job, and I am doing them at the moment because I wwnt into the 40% bracket and then changed jobs. But both times I started I volunteered as I knew I had a liability.

It's not a big hassle for us because PAYE does most of the work and we have far fewer exemptionsa and allowances than they do in the US. If you live off investment income (which seems to be where geojanes is) then it would be a bit more complex here too. But it takes a short time online once you have all the paperwork you need. My wife had to do one last year because she got PPI compensation.

Sassenach wrote:The whole concept of having to 'do your taxes' is completely alien to me. Tax is just something that comes out of my pay packet automatically each month, I never even think about it.

I think I end up taking home about 3/4 of what I make, but that's just a rough guess.

Most people in the US have no idea what they're paying either. But that doesn't stop people from having very strong opinions, which I truly don't understand.

danivon wrote:If you live off investment income (which seems to be where geojanes is)

I have a roughly equal mix of wage and non-wage income. But I should also say that we did give a large amount to charity the past two years, and that money is generally not taxed and can really impact your effective rate.

geojanes wrote:

danivon wrote:If you live off investment income (which seems to be where geojanes is)

I have a roughly equal mix of wage and non-wage income. But I should also say that we did give a large amount to charity the past two years, and that money is generally not taxed and can really impact your effective rate.

Here we are encouraged to contribute the tax savings of charitable giving to the charity, although you can take the tax advantages yourself (either by contributing out of salary or by claiming back in a tax return).

I thought you were an overpaid member of our bloated public sector?

Haha ! No, I'm very much an underpaid member of our bloated public sector. I almost certainly earn less than anybody else who posts here.

The charitable giving rule is another one of the sacred cows of the American tax system, which in my view is absurd, especially as it regards religious institutions, since most everything you give your church/temple/mosque/whatever, is not taxable. I think about the absurdity a few years ago of the ground zero mosque: it was subsidized by every American by not having to pay any real estate taxes or income taxes, and by allowing donors to deduct their gifts on their tax return.

In high tax places like NYC, schools, both public and private, are also guilty of gaming the system. In Manhattan most "good" schools have very active PTAs that raise, annually, in the seven figures to support programs in the school. In the private schools this is a way to shift some of the money from tuition (which is not deductible) to charitable giving (which is deductible), and in the public schools these slush funds go to ensure that all public schools are not, in fact, resourced equally. Charitable giving can really move the needle on effective rates, but not all charitable giving is created equal.

I'm personally guilty of supporting both these groups: my synagogue and my kids' schools, both of which have large chunks of the total charitable giving. Doesn't seem that altruistic when viewed through that lens, does it?

geojanes wrote:Well, I'm done with this years returns. My rate went up from last year, but I'm still in a very sweet spot
2013: 6.45%

The above numbers are calculated as: (Total Tax Paid) / (Adjusted Gross Income). These numbers just include federal tax and does not include state or local taxes.

11.65% this year for us.

That actually represents the second year in a row in which our total percentage has increased.

Sassenach wrote:

I thought you were an overpaid member of our bloated public sector?

Haha ! No, I'm very much an underpaid member of our bloated public sector. I almost certainly earn less than anybody else who posts here.

Possibly. I don't actually think the public sector is that bloated - tge waste in the private sector is just hidden far more effectively.

geojanes wrote:Doesn't seem that altruistic when viewed through that lens, does it?

Not really. It also makes me wonder whether the high level of charitable giving by Americans, particularly the rich, is less an indication of moral superiority than it is about avoiding taxes.

danivon wrote:moral superiority than it is about avoiding taxes.

Moral superiority? Because of high rates of charitable giving? Bwahahaha!!!! Change the tax code and see what happens!

So is Buffet a hypocrite for backing the Burger King/Horton deal given the inversion plans?

Archduke Russell John wrote:So is Buffet a hypocrite for backing the Burger King/Horton deal given the inversion plans?

Not really. He is quite honest in pointing out how his class uses the rules to macimise profit. His job as an investor (especially of other people's money) is to do just that. But the issue is the rules, which he does not control. There is a small amount of hypocrisy, but it's not like he ever said people should not do what he does - he says that the govermment should change the rules

The right are desperate to attack the man because he is seen as a class traitor.