Paying Taxes?

[josephga]

my grandfather was a big time moonshiner thats how he had such a large farm. they would make and sell moonshine when crop seasons were poor. I've never tasted it but heard it was better than what most legal operations sold..

[Xander]

Good for you young man. As a fellow tax paying citizen I appreciate the teamwork you show by paying along with some of the rest of us

 

Evading taxes is too much work. Al Capone was caught only because he didn't pay his taxes.

 

Plus -- paying taxes is good practice for when I get a real job and start diversifying my income into assets

[instudiocity]

my grandfather was a big time moonshiner thats how he had such a large farm. they would make and sell moonshine when crop seasons were poor. I've never tasted it but heard it was better than what most legal operations sold..

Some of that stuff coming out of the hills and hollars of North Alabama and North Georgia make the legal stuff taste NASTY... guess that's what happens when the EPA and the FDA get a say so in making good hooch!

[josephga]

Some of that stuff coming out of the hills and hollars of North Alabama and North Georgia make the legal stuff taste NASTY... guess that's what happens when the EPA and the FDA get a say so in making good hooch!

 

I even remember popcorn sutton. there's a great documentary on him

[Frequentflier]

Was it Al Capone the Feds were able to convict on tax evasion more easily than some of his other illegal activities?

 

I think there are several activities that should be legalized, regulated and taxed. While I don't smoke 420 it seems it should be on the list. All forms of companionship should also be regulated and taxed. However, if someone is making money and not paying taxes on it I'm not going to even reach for my violin if they get caught, fined and sent to prison for tax evasion. I've worked since I was 15 and paid taxes all along the way. Never was I guess "smart enough" to have income that wasn't reported on a 1099, W-2 or paid by check in a traceable fashion. So didn't have a choice but to pay anyway. I don't think its at all fair that others who have apparently the self granted "option" not to report income and pay taxes should get away with it. I also find nothing "noble" about someone who says "make it legal" and I'll pay. What's next, "if the government spends money the way I think it should, I'll pay taxes"? This ranks up with the equally dumb comment that "if people like Warren Buffett want to pay more in taxes they can make a voluntary tax payment". Why should I "volunteer" to pay more when others choose to cheat? How far do you think the military would get, or the police or the fire departments if taxes were "voluntary". If you don't want to pay to live in the greatest country (in my opinion) on the earth and benefit from lets say the bulk of it's services (military, fire, police, roads/bridge, safe skies for flying), move somewhere else. If taxes are too high, protest and complain in an adult, responsible and civilized fashion. Choosing to break the law through tax evasion is none of these. I'll add though that Americans should get more permits to protest and should regularly take to the streets to protest the incompetence of Congress.

[instudiocity]

I'm sorry but this comment was so ignorant I couldn't let it go. If by "sock it to the rich" you mean charge us (yes I'm part of the over $250 K crowd) a Federal tax rate on the over $250 K income equal to what we paid when President Clinton was in office I'd say you have a warped definition of "sock it to us".

What's even weirder to me is that the top 1% pays 40% of all Federal Income tax - the $250K crowd pays 4 TIMES as a percentage than wage-earners in the lowest bracket. And 52% of all Americans pay NO Federal income tax. Guys like you cheer having your earnings confiscated. You're getting Royally RAPED (without the kisses) for your success and still volunteering more? Weird!

 

Why in the hell you think you deserve to pay more to this corrupt government will forever make no sense to me. If, however, the federal government wanted to tax the same percentage of income - equally - no matter how much or how little one earns - FAIRNESS might prevail and then we might vote for representatives who will spend our money more responsibly.

[josephga]

I agree with growing weed. imo the only reason the government doesn't like it is because it's hard to regulate because you can grow it from a seed and it cuts them out of a piece of the pie.

[Xander]

Why in the hell you think you deserve to pay more to this corrupt government will forever make no sense to me. If, however, the federal government wanted to tax the same percentage of income - equally - no matter how much or how little one earns - FAIRNESS might prevail and then we might vote for representatives who will spend our money more responsibly.

 

"Fairtax" is a regressive taxing system and would not be a good idea.

 

We need MORE tax brackets with more sensible tax rates per bracket. The obscenely wealthy SHOULD be paying a higher tax rate, because the fact of the matter is (And I'm not opening this up for debate) that the OBSCENELY wealthy DON'T work for their money on average - they simply play tennis, hire escorts, and have their money managed by a third party. Whether they are grossing 40m a year or 100m a year will not change their quality of life. And if it does -- boo fucking hoo.

 

My only fear is that if we increase the taxes on the obscenely wealthy, the military-industrial complex will only grow larger.

[Xander]

I agree with growing weed. imo the only reason the government doesn't like it is because it's hard to regulate because you can grow it from a seed and it cuts them out of a piece of the pie.

 

Until Monsanto starts Marijuana GMOs

[Edward]

Frequantflier. I am not sure you understood my comment. If you did you are the ignorant one. When an escort brags he does not pay income tax on his earning from escorting and then is fully supportive of the higher taxes for those making over $250K. I find that hypocritical.

[Frequentflier]

I will add that if you can't afford an additional 3 to 4 % on your income over $250 K you aren't rich.

 

I understood the part about President Obama supposedly trying to sock it to the rich quite clearly.

[Frequentflier]

Apologies for using "ignorant" and I've edited the comment accordingly.

[JustASailor]

"Fairtax" is a regressive taxing system and would not be a good idea.

 

We need MORE tax brackets with more sensible tax rates per bracket. The obscenely wealthy SHOULD be paying a higher tax rate, because the fact of the matter is (And I'm not opening this up for debate) that the OBSCENELY wealthy DON'T work for their money on average - they simply play tennis, hire escorts, and have their money managed by a third party. Whether they are grossing 40m a year or 100m a year will not change their quality of life. And if it does -- boo fucking hoo.

 

My only fear is that if we increase the taxes on the obscenely wealthy, the military-industrial complex will only grow larger.

 

I wonder how many "obscenely" wealthy there actually are in the US because none of the much abused one-percenters that I know are what used to be called the "idle rich." Even if you start with 380k per year, taxes, school-age children, and aging parents cut that figure down pretty quickly.

 

Anyway, the fastest way to scare rich people out of your country is to tax them obscenely. Have you seen the Parisian real estate market lately? A glut of rich-people houses up for sale because all the have's are decamping to Luxembourg and Switzerland, they and their money. (And, naturally, the houses are being gobbled up by wealthy foreigners who pay no income tax.)

[Kevin Slater]

paying taxes is good practice for when I get a real job and start diversifying my income into assets

 

I would encourage you to look into starting some form of investmenting today. At your age, an annual contribution to an IRA, whether Roth or traditional, will make a huge difference later on. The younger you start, the longer compound interest has to work in your favor, and now is the best time to establish good savings habits. In general, the tax structure is extremely favorable for those with modest incomes who manage to save even a little.

 

If you do decide to explore a bit, one simple, easy to read book to cover the basics is The Elements of Investing. http://www.amazon.com/The-Elements-Investing-Burton-Malkiel/dp/0470528494

 

Kevin Slater

[Xander]

I would encourage you to look into starting some form of investmenting today. At your age, an annual contribution to an IRA, whether Roth or traditional, will make a huge difference later on. The younger you start, the longer compound interest has to work in your favor, and now is the best time to establish good savings habits. In general, the tax structure is extremely favorable for those with modest incomes who manage to save even a little.

 

If you do decide to explore a bit, one simple, easy to read book to cover the basics is The Elements of Investing. http://www.amazon.com/The-Elements-Investing-Burton-Malkiel/dp/0470528494

 

Kevin Slater

 

Yes, investing money is on the to-do list. But you must understand - I went from being homeless to where I am now through escorting and proper money management. I've got my own list of priorities -- I'm still busy trying to save money for next semester's textbooks while taking care of my daily expenses. I still don't have enough money in the bank to cover 6 months of expenses --- escorting is going to get me by for another 2 years (tops) then I'm out of the game and getting 80k/year starting salary. I am a business student and I know the power of interest

 

Anyway, the fastest way to scare rich people out of your country is to tax them obscenely.

Scaring rich people away is not of concern to the general welfare of this country. Scaring the *businesses* away is.

 

Not like any of it'll matter in 5 years when we are back in a bubble economy

[bigvalboy]

At your age, an annual contribution to an IRA, whether Roth or traditional, will make a huge difference later on. The younger you start, the longer compound interest has to work in your favor,

 

Sound advice...........Though I do understand the financial burden you are under. Just keep information like this in your back pocket, and you will remember it when the time comes. Most likely it will put you ahead of the game. Good Luck...

[Walker1]

In this country, tax evasion is a more serious crime than murder and any assorted crimes. The govt has become a self devouring beast.

[Mariner45]

In this country, tax evasion is a more serious crime than murder and any assorted crimes. The govt has become a self devouring beast.

 

Well, prosecuting murderers and assorted criminals don't bring tens of thousands of dollars into the system, do they?

 

I've been audited twice, mainly due to the fact that I'm part of a company that brings in a respectable portion of money. Never had to pay any more, since I keep good records.

 

But let's face it. The amount of money that the average escort probably makes a year (excluding say the top 10%) are not worth the man hours and effort to go after their spare change even if they do cheat or evade their taxes. Their chances of an audit if they under report are slim to none.

[Kevin Slater]

But let's face it. The amount of money that the average escort probably makes a year (excluding say the top 10%) are not worth the man hours and effort to go after their spare change even if they do cheat or evade their taxes. Their chances of an audit if they under report are slim to none.

 

That sounds about right to me. Then again, it wouldn't be terribly hard to identify who that top 10% might be, and going after them might be very worthwhile. But I suspect IRS finds tax cheats not from culling successful escorts, but from spending and deposit patterns unsupported by tax returns, regardless of the source of the income. For what it's worth, I've read that the IRS estimates 57% of self-employment income goes unreported. (http://www.nytimes.com/2006/04/02/magazine/02wwln_freak.html?pagewanted=print&_r=0)

 

Kevin Slater

[Mariner45]

That sounds about right to me. Then again, it wouldn't be terribly hard to identify who that top 10% might be, and going after them might be very worthwhile. But I suspect IRS finds tax cheats not from culling successful escorts, but from spending and deposit patterns unsupported by tax returns, regardless of the source of the income. For what it's worth, I've read that the IRS estimates 57% of self-employment income goes unreported. (http://www.nytimes.com/2006/04/02/magazine/02wwln_freak.html?pagewanted=print&_r=0)

 

Kevin Slater

 

That percentage is absolutely unreal, Kevin. WOW!

But actually, the IRS recently released a report on how they select people for audits. Self employment was one of the criteria, but especially if they report lots of deductions, repeat net losses, or clearly have a lifestyle not compatible with their income. The IRS really only looks at purchases over 10,000 dollars. They don't look at your average deposits and purchases unless they get a real red flag.

[Guest]

Do the IRS enforce tax on illegal activity ???

 

If prostitution is illegal then they are capitalising off the illegality of a profession

 

Prostitution itself isn't illegal in the United Kingdom but certain aspects of it are and the Inland Revenue in the UK tend to leave the sex industry alone except where significant amounts are being made. Once someone is ascertained to have been making money from illegal gains they are subject to a proceeds of crime order to seize their assets

 

The IRS most definitely enforces taxes on illegal activity. There are also extremely stringent laws protecting the privacy of tax returns. No way would or could the IRS report to law enforcement authorities that income was gained illegally. In any case, that would be extremely stupid and counter-productive. Of course, being an escort per se is not illegal. It's only illegal if the escort agrees to perform sexual activity for a certain sum of money. There is no need to go into detail when reporting income on one's income tax forms. One just has to put one's profession as escort (or whatever) and then put in what one made. All the IRS cares about is that the taxpayer reports his income accurately (and pays his taxes, of course). They don't care about the details about what you did to whom.

[gallahadesquire]

As far as raising money and watching for "entitlements": Could someone explain to me why there's a cap on the amount of income that is taxed for Medicare and Social Security?

 

Roughly $110,000 seems a very low ceiling for cessation of paying taxes. Why not just make it on the entire amount earned? My financial adviser says that would cure the Social Security debt / collapse.

[Kevin Slater]

Could someone explain to me why there's a cap on the amount of income that is taxed for Medicare and Social Security?

 

There is no maximum contribution limit (or cap) for Medicare. Only Social Security is capped at $110,100.

 

Kevin Slater

[Kevin Slater]

Could someone explain to me why there's a cap on the amount of income that is taxed for Medicare and Social Security?

 

Roughly $110,000 seems a very low ceiling for cessation of paying taxes. Why not just make it on the entire amount earned? My financial adviser says that would cure the Social Security debt / collapse.

 

It's difficult to apply a discrete set of logic to a complex legacy such as Social Security-- no one party sat down, thought it out, and came up with the system. That being said, I'd guess that one reason might be that Social Security is commonly viewed as a forced savings plan: government takes from your wages and gives that money back to you in your golden years. Presumably, after your first ~$110k, you can be trusted to invest the rest of your own dollars. Social Security is merely insuring a safety net, not your complete retirement plan. That only earned income (wages) is taxed and unearned income (dividends, interest, capital gains) is not might support that interpretation.

 

Personally, I'd rather Big Brother get the hell out of my retirement planning, but that's just one of many political views that would make me unelectable.

 

Kevin Slater

[jawjateck]

Paying taxes??? This will be my last substantial year paying taxes.....woohoo!!!!! I'm going into semi-retirement next year, just keeping a few clients for side work and minimal income. My goal is to have income so low that I no longer pay income taxes (or very little), and can perhaps even qualify for the earned income tax credit, and tax credits to pay for my health insurance. Happy days are almost here!