JOHN DOESN'T SWEAR! - more on taxes

Since I have shared my thoughts on taxes I have gotten some emails along with the comments others post on my blog and facebook page. Some agree and wanted to contribute more ideas, some disagree; including my sister. I found it particularly interesting when I got a comment from someone I don't even know. I debated posting the comment or not, but I was totally impressed that John clearly stated his opinion without even one swear word So, here it is:

john said...
(This is my comment that John has issue with...) but a person at a 33% tax rate only has $0.67 per dollar left to spend. Not to mention the fact that the person paying 33% often no longer qualifies for child credits, eligibility for Roth or Trad. IRAs, and they get none of the government sponsored assistance programs that they pay 33% percent of their earned income to provide to those who pay little or no tax.
(This is John's reply...)Boo-hoo? If you are in the 33% tax bracket, you are pulling down between 164K and 357K per year. You don't need special assistance. Those things are for the people who DO need it. After paying your 33% on $164000 - not even counting deductions - you are left with $9000/month to scrape by on. cry me a river. secondly, you are making a big deal about small business owners paying HALF to the government... you should point out that it's only half the PROFIT. And many small business owners have enough write-offs to have very little profit. I should know, I am one.I think we should cut spending, starting hereUS Military spending 2008.
April 16, 2009 9:32 PM

If I were to meet every single person in this country and talk politics with them, I believe I would find common ground on at least one subject. Likewise I could likely find a point of debate. Politics is one of the topics were are trained to avoid in business because people get so hot about these things.
With John, I agree that the government is gushing money into military that could be trimmed of some fat. Even the guy recently taken and held hostage by pirates might agree with that. But when our military saved the day and effectively got the point across that American Citizens are not to be toyed with and saved this man from his attackers, he may now feel that the military spending is justified...?
As for a small business owner's deductions, I would say "Yes, there are many deductions." But I would point out that each business owner has to make their own call; is it worth it to spend more to claim more deductions? I say "no." Is it worth it to claim deductions that are not legit to save on taxes? I say "no." And again, If anyone as a business owner were audited by the IRS, would you loose sleep over it? To that, again I say "no." I have nothing to hide. I do not overspend to save money on taxes, nor do I claim bogus deductions. I had an opportunity to build or locate a commercial space for operations, and I chose instead to take more profits and work out of my home. Everyone thought I was insane, because their is an apparent expectation that business must be done a certain way to be successful. I do not take the road most traveled in any aspect of my life. This is no exception. I want to show profits and as I strive to restrict my spending, as our government should, I have a bit of surplus, not debt, as our government should.

Thanks for not swearing John, whoever you are. I would love to know how you came across my blog and became so impassioned as to set me straight. I'm guessing you are a friend of a friend who was intrigued by by post title. DOES ANYONE KNOW JOHN???

Oh and John, you are not alone in feeling that the lower tax bracket is for those who need it... I had another comment emailed to me that is as follows...

"It sounds like you had quite a tax day. Nobody likes tax day. It's a total drag, but it is what it is.

About Social Security: The last hike in the SS deduction rate was under Bush Sr (15.3%) and Reagan took it from under 10% up to more than 15%. These raises had a lot to do with the up and coming baby boomers approaching retirement age and unfortunately, over the years, many administrations "borrowed" funds from SS and never paid it back. If it had been left alone, there would be more than enough for the baby boomers and then some. The good news - you can deduct up to half the payment on your taxes!

http://www.infoplease.com/ipa/A0004658.html

I disagree with a flat tax rate. Someone who makes only 20K per year would miss that $3000 per year a whole lot more than someone who makes $1,000,000 ($150,000). Additionally, if those same people have families and are the sole provider, then it's far easier for a family to make it on $850,000 than $17,000. Also, 90% of Americans make less than $200K per year and got tax cuts in the recently implemented plan.

I hope all is well with you and yours. Take care of you!"

Aww! See people are so nice about their differing opinions. I love that people can disagree and still be tight.

Here is my reply...

I am pleased that you shared your thoughts with me, so I am replying in good spirits. The capitol letters are not 'yelling at you' they are merely an expression of my passion for the subject. Here goes...
If that person you spoke of, making $20k per year wasn't getting WIC, food stamps, welfare money, free health care and subsidized housing you might be right. However this person making $20K may also have 3 kids. They pay in $3000 for taxes, but they are getting over $3000 per kid as a tax credit (government handout). That person is already getting subsidies valued at well over $3000 per month THEN they get a government tax credit check in April for another $6000. That is insane!

An employee of mine told me she just got a HUGE pay raise from Obama for being on welfare. She is getting a free education to boot. She even qualifies for free child care. (There are a few other little perks for you that I didn't include above! Now add that dollar value to what I calculated above. Swallow that. Take your time if you must. It's hard for me to get down, too.) This particular employee only works for me 10-12 hours per week. She comes in to work these hours over three days per week, because this is all she says she can work. Yet, she will not come to work! She repeatedly misses one to two days a week. Today, she just asked me for an entire week off so she could work on some court paperwork! There is no motivation for these people to work. As it is, this girl paid in a very minimal amount for taxes, about 10% of 18K. So she paid in $1,800, but then she got credits for 4 children. So ultimately she paid in nothing and got over $12,000 in FREE money for doing squat. ON TOP OF WHAT I'VE ALREADY LISTED ABOVE AS HER GOVERNMENT PROVIDED BENEFITS.
I am not saying Obama started this mess, but I am disgusted that he has increased their benefits. And I am disgusted that he continues to promise more to the 'poverty stricken' while making the top earners out to be wicked and greedy. Especially when the top 10% of earners are paying 90% of all taxes collected.
A life on government subsidies may not be all roses, but every citizen of this country has a choice. People come to this country with nothing, people like Oprah have come up out of the ashes of their childhood and are making something of themselves. This is a result of taking responsibility and accountability for what YOU, personally become.
These people on assistance need to take accountability and stop handing their vote to the guy who promises to put more cherries on top of their welfare cupcake!
And guess what, my business is a corporation. I am an employee of my corporation. As an employee I pay 7.5% for SS, and my corporation pays the other 7.5% of my SS. A corporation CANNOT deduct anything for SS. A small business owner that is making any decent living is going to incorporate because of liability. So much for that tax deduction. I guess that one is hanging out somewhere with my ineligible child credits.
As it is, this employee I spoke of (which gets paid nearly twice of Washington's already top rated minimum wage for a job that I allow her to bring her children to) has no motivation to work and is still is getting $12,000 in free money in April along with HUGE value in Government assistance.
I on the other hand am working my tail off and making two small businesses successful I am rewarded by paying a fortune to a government that wants more. Do you really believe that the government is going to be a better steward of my money than I am? I have no idea what the tax cut you spoke of is about ($200 and less). I sure didn't feel any tax cuts. I do know that the stimulus has increased welfare benefits and unemployment benefits substantially only since Obama was elected. How is that getting paid for other than to increase what I pay? What a nice guy he is. Truly. LOVE YOU!"

So John again, back to the people who need the lower tax rate...how do you think the recipients of these huge checks in April are handling their tax credits? I can tell you from experience that that money becomes BLOW money for most. I should know, because as you've said to me ..."I've been there." And just recently I was listening to a group of people share their plans for their AWESOME APRIL CHECKS. They are planning to buy nicer things than I own. But whatever...as you and so many other's feel...they deserve it!