18

Time to Shrug!!!!

Posted by H6163741 8 years, 11 months ago to Economics
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So, my husband and I each had pay increases of about $1000/month this year. My weekly check went up $4; his went DOWN $20!! Also, per the IRS, we would each need to claim 0 exemptions AND have an extra $400/month taken out of our checks in order to come out 'even' at the end of this year!!


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    Posted by Snoogoo 8 years, 11 months ago
    I feel your pain, the same thing happened to me this year as I got kicked into another bracket.. take home pay goes down as production goes up. The system is set for failure. Everyone is so bewildered why people are choosing not to work and this is why. Why work when you can make more on welfare than you can working and paying taxes? It's enough to drive you crazy.. I know a lot of productive, bright, principled people who are suffering deep personal depression because of this right now.
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    • 10
      Posted by Mamaemma 8 years, 11 months ago
      Snoogoo, you have expressed something very important. I have struggled most of my life (since I read Atlas) to keep a positive attitude as I watched my country change. The last 8 or so years have been especially difficult, as I have had to accept multiple encroachments of my freedom at work.
      I can only imagine what it must be like for a young person. I am 62, but I often wonder what it will be like for my children.
      The thing that has kept my afloat is to constantly think about all the wonderful things in my life.
      There's an old saying, "It's impossible to be depressed when you're counting your blessings".
      Just as in Atlas, it's the bright, principled people who are suffering. The moochers have never been happier!
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      • Posted by Crushmore 8 years, 11 months ago
        Great Post! It is a struggle to stay positive when it seems that the looters are winning but when the time comes they will lose and you will be the better for staying upbeat for your family and yourself.
        "Keep on keepin on." Joe Dirt
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      • Posted by BeenThere 8 years, 11 months ago
        Some 25 years ago, in a social setting conversation with a liberal leaning college professor, I responded, "And what will happen when the rational, productive people either quit or simply reduce their productiveness while retaining their work?" Her answer was, with condescending confidence, "Oh, that will never happen!"

        I have said for decades that the root of all irrational people is "I (or we) can get away with it." The "it" they want to "get away with" is life, never grasping (as AR so frequently expressed)
        that fear of death is NOT equivalent to loving life, and most particularly one's own life.

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  • Posted by $ Lauerp 8 years, 11 months ago
    Rated but different, my family has private insurance through Humana which we have had for years. We like them and our very high deductible policy.

    Obamacare doubled our premiums from $500+/mo to $1100/mo. The policy adds the usual Obamacare coverages that are required but that we don't need or want. So between this incremental yearly cost of $6500 and the 3.5% surcharge on dividend income, the donkeys lead by BHO and their ACA sure have made life more expensive for my family of 5.
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  • Posted by iroseland 8 years, 11 months ago
    it must be tax time.. 8^)

    I kind of gave up last week.. Last year we had the best year yet. We seriously blew the doors off all previous years. The result though is pretty sad. The federal income tax is now the equivalent of a fully loaded audi A3's sticker price. Which means we get to write a check in a couple of days. So, apparently an Audi A3 in value was not enough.. No, for us to be able to say we payed our "fair share" we in fact need to write a check.
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    • Posted by m1tmc 8 years, 11 months ago
      I have somewhat shrugged, already, so I don't have that level of income now and I hate, I Hate, I HATE paying or doing taxes, but I learned that with most occupations I could find ways to avoid the taxes with desirable purchases or small business start-ups with personal benefits within the same year. For instance: farm not making a dime allowed to write-off $6-$8 thousand dollar 4 wheeler including mower deck for mowing new orchards. Some of these situations may have been eliminated, but I hate to someone having to pay exorbitant amounts if desirable alternatives exist. Just a thought.
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  • Posted by jimslag 8 years, 11 months ago
    I know the problem, I have it also. My wife and I live in different states, so I have to file Married, Filing Separately. My normal paycheck is under the limit but my military retirement pay takes me over in to the 33% bracket. Neither place takes out enough, so I wind up paying every year to make up the difference. I determined that I am going Galt at the end of 2016, selling everything and buying a one way ticket out of Dodge. I claim single 0 and have an additional amount taken out of my military pay. Not enough though, so at the end of next year, I go from 6 figures to the low, low 5 digits. With moving out of the country, my living expenses will drop also and will be debt free by June of next year. Shrug it is.
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  • Posted by Wonky 8 years, 11 months ago
    Definitely pack away as much as possible into 401k/IRA to bring down your adjusted gross. I printed out my social security statement for kicks the other day. What a joke.
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    • Posted by Snoogoo 8 years, 11 months ago
      I was thinking about that, but aren't you just delaying the tax to a later date?
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      • Posted by NealS 8 years, 11 months ago
        I started to put my two cents in here but instead will save it for that book some of have told me I need to write. It was huge.

        What I'd like to say to those still working though is SYM, "Save Your Money". Find a specific percentage and save it, period. I saved in a 401K the most I could that would take the biggest advantage of the company’s contributions. I saved personal funds as well in the bank when the banks used to pay interest. And I bought all the company stock I could at 85% of current value, thanks to the company I worked for. And finally I bought some rental property, always owning at least a four-plex, and or a rental house or two. I did without a lot of things I really wanted, but then again, I was too busy to enjoy them anyway.

        Today in retirement, some of my friends tell me they can't afford this, they can't afford that. It's getting so they can't afford me anymore. I tend to hang out with those friends that can afford what we like to do, we go out to eat a lot, take cruises, buy collector items, like guns and stuff, and just plain have a good time. And I finally got that Corvette that I've always wanted since I was in high school. My sister had her two Corvettes back then, but she doesn't have any now. I help her out on occasion now as she’s had some hardships, but we live our own lives.

        Today I find my 1040's reporting more income than I ever had while working and I only draw a little over the minimum of my required IRA withdrawal. And my IRA still continues to grow. In the early years of retirement, before I was making more, I moved money and just paid the darn taxes from my IRA to a Roth IRA. That falsely inflated my income. I did this in fear of increased tax rates. I also sold all my company stock at $90/share with an average cost of $19/share, and just paid the darn taxes. This I did in fear of increased capital gains taxes. The balance is now mine to enjoy. That stock has recently been up to $170/share, thank goodness I bought some more of it after my big sale. My only stock recommendation, find what you think is a good company and ask yourself, "Will it be around 20 years from now?" (The best advice I ever got from Warren Buffett).

        These days, with the biggest earning I've ever shown on my 1040's I now have to draw extra cash out of my IRA in order to pay the additional income tax. It really hurts, but it's a whole better than the alternative. In any case there is no better advice than “Save Your Money”. Taxes will never go away.
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        • Posted by Snoogoo 8 years, 11 months ago
          Great advice, if you write your book I'll buy it. I have 35 working years ahead of me to save, but I am trying to come up with a plan other than just the 401k.
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          • Posted by NealS 8 years, 11 months ago
            Rental property - strip mall, small units like a 4-6-8-plex, whatever you can handle, just don't get too big and don't panic when the market goes down, it always comes back. These investments let others pay for them for you. At first they might cost you a little, then you improve them, or upgrade them, and the rents go up, inflation makes the biggest gains for you. If you have a good cash flow, pay them off early in the mortgage if possible. At least make some extra payments early, it saves a lot of interest. Interest is nothing more than rent, you are renting someone else's money. When you get close to retirement sell for cash and let someone else take over the headaches.

            And stock in those companies that are going to be here more than 20 years from now.

            I can already tell you'll do just fine. It's obvious just by you being here in the Gulch with these people, and not on the other side. Put together a plan and stick to your convictions. There will some ups and downs, but they are all just temporary. Just remember to live when you retire, some people forget what they put so much aside for.
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    • Posted by $ jdg 8 years, 11 months ago
      I wouldn't now. Obama has proposed seizing or heavily taxing retimement accounts. Savings need to be put in a place and form where they can't be found and grabbed.
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  • Posted by khalling 8 years, 11 months ago
    what are you going to do about it?
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    • Posted by 8 years, 11 months ago
      Work part time and spend more time with my daughter.
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      • Posted by $ jlc 8 years, 11 months ago
        This is a good answer. Keep up the quality of your production, but rein in the quantity until you are below the trigger value.

        Back in the 1980's, I ratcheted back my work hours to the minimum full time (32 hrs per week) to keep below a tax cuttoff point. I made about 20 dollars less per paycheck (I forget the actual amount) than the people working 40 hrs at the same pay rate.

        Another possible solution is to talk with your boss about taking the raise in some sort of unofficial benefits (work from home 2 days a week; come in an hour later each day to miss traffic) that are not metered - instead of the $ raise.

        Jan
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      • Posted by Ibecame 8 years, 11 months ago
        I shrugged 15 ago when I reached 45, but leading up to that it occurred to me that the moochers write parts of the tax laws for themselves. I took on a second job of studying the tax codes and learned how to reduce my taxes by a lot. I don't do anything that might get me in trouble or trigger an audit, but I pay a lot less taxes than most. I invested the money I saved, which is what put me in a position to Shrug.
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        • Posted by 8 years, 11 months ago
          Awesome! Any suggestions?
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          • Posted by Ibecame 8 years, 11 months ago
            I'm not an Attorney, or CPA unfortunately which means that if I give you advice, I would be breaking the law. However, one of my favorite books on the subject was written by my Tax Attorney (who is also a CPA). Check out, What Your CPA Isn't Telling You: Life-Changing Tax Strategies by Mark Kohler. He also has a free podcast every week on Blog Talk Radio and all of the past podcasts are available on iTunes. Like anything else in life the rule I go by is take the time to understand what you are doing, create a plan and follow it, and then review and revise your plan. The tax laws change, and you have to keep up with the changes.
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  • Posted by strugatsky 8 years, 11 months ago
    No doubt this has occurred to some that the situation we're in is not by happenstance? Look at the facts: our education system is completely destroyed, from grade school through college – the system graduates morons incapable of anything of value; the workforce is mostly destroyed and contaminated with “needs” and benefits, while incapable of standing on their own feet; half of the adults in the country are out of the workforce completely, mostly on welfare or in an illicit economy. To receive tons of “benefits,” one has to simply lower oneself to the bottom and ask – the latest from Puerto Rico – SSI disability benefits for not knowing English! It is truly hard to imagine that all these are independent actions; I think it is more believable to see it as a planned dumbing-down of the nation, leading to the group in power grabbing complete control. As fantastic as that may sound, the facts seem to support this perhaps not so crazy of view. This is not unprecedented – the Spartan’s killed off the brightest of their slaves and almost all slave-owning societies forbid education for the slaves. Except for the Mamluks, who conquered their masters. Our new masters will not repeat that mistake. Will the ever increasing taxes on the remaining producers lead to an eventual stop of the production and to a collapse, followed by the complete takeover by the people orchestrating this? A conspiracy theory or reality?
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    • Posted by 8 years, 11 months ago
      I am convinced that Obummer is a Muslim 'plant' specifically engaged to destroy the USA. Why fight with bombs and guns when you can accomplish more with the stroke of a pen in an executive order?
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      • Posted by strugatsky 8 years, 11 months ago
        There is no doubt at all that he is a Muslim. There is a video of him saying that the most beautiful thing that he has ever heard was an imam's call to prayer - only a Muslim could have said that. He is also a Marxist, which, although it sounds like an oxymonon, is not uncommon among many "progressive" Muslims. But the real issue, to me, at least, is why so many Americans are supporting and glorifying him? Who's behind the brainwashing? This has begun long time before Osama; he fits the role well, but is there more to it?
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  • Posted by term2 8 years, 11 months ago
    I think we all "shrug" in our own ways. I stopped making medical devices after the FDA started getting into the swing of regulating them. When the death tax came back in, I changed my desires to save money and would prefer to die penniless. Not spend so much time making money and giving up the other things in life- only to give half of what I saved to the government when I die.
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    • Posted by CircuitGuy 8 years, 11 months ago
      You can still leave $5 million, but they dick around with it every year so you can never be sure.
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      • Posted by $ jdg 8 years, 11 months ago
        You can also give your heirs slightly less than the gift tax exemption each year (I believe it is now $13,000/year per recipient) without having to report anything, and without it counting toward your estate. Of course this doesn't work with larger units of property such as real estate.
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      • Posted by term2 8 years, 11 months ago
        Obama is trying as hard as he can to cut that death tax exemption back. If you are married to a citizen (has to be a citizen), you can give them the chance to spend it before its taxed. But I dont think the exemption amount is indexed to inflation, so they are probably hoping that it will be cut back on its own.
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  • Posted by freedomforall 8 years, 11 months ago
    If you can, you should consider changing from employee to consultant. (But it may still not be economically sound due to cost of "benefits.")
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    • Posted by 8 years, 11 months ago
      Funny. That's exactly what I'm planning to do. My benefits are all through my husband's job anyway. But what about the self-employment tax?
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      • Posted by freedomforall 8 years, 11 months ago
        In my experience Self Employment Tax is more than made up for by the expensing of costs as a business. Example, You have two cars and one is reserved for entirely business use.(Not absolutely required but better if possible.) If your office is not at the clients location your drive to the client may become deductible. Some travel expenses are more easily deductible. Expenses for your office are deductible (although home office expenses are limited.) You also should make your services available to more than just one client to retain your small business tax treatment. You can become more knowledgable by downloading IRS Pub 17 (individual) and Pub 334 (small business) and Pub 535(business expenses.) Be aware that these are the IRS suggestions that don't really give the leeway that the law does, but if you get familiar with some of this you will be able to better understand what your tax preparer tells you to do. Its not rocket science, but it does take some time to understand. At least the payment for understanding is lower taxes, and that is not taxable;^)

        BTW, did you know that wall street traders have a special filing method so they don't have to pay Self Employment tax on trading profits?
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  • Posted by $ MichaelAarethun 8 years, 11 months ago
    And every comment makes the case for an end user consumption tax at point of final sale only.

    In truth the last buyer is the only one who pays the tax on goods and services and only after paying the income tax. The rest is bogus.
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  • Posted by jabuttrick 8 years, 11 months ago
    I am getting very tired of the tax situation and am considering retiring simply to reduce my income. I already went part time and that helped but this year was the worst because my wife passed away in 2013 so I was now single again for tax purposes for 2014. The result was a disaster. I just wrote my biggest check ever to the feds. I'm almost ready to give up except I love my job. What to do?
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  • Posted by Temlakos 8 years, 11 months ago
    I am like the professor of economics denied tenure because he held, and taught, that one cannot spend more than one takes in. I'm just waiting for the word that a lineman's job is available in a real, physical community.
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  • Posted by radical 8 years, 11 months ago
    The time to shrug was years ago. If you'd read "AS" and paid attention to what was going on around you, you would be much closer to the Gulch than you are now.
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