Friday, April 14, 2006

Taxing Times 

Just a reminder for those of you who haven't done your taxes yet: because April 15th is on a holiday weekend, you get until Monday to file. (For once, I've actually filed before the deadline -- whoo-hoo!)

But, as you're either bitching and moaning about what you owe, or planning how to spend your refund (if you haven't yet), chew on this news:
Vice President Dick Cheney and his wife... overpaid the tax man and are looking for a $1.9 million refund.
Which begs the question, how do you overpay by that much? Or, rather, how much did you make in order to overpay by that much? Well, here's how, paraphrasing the article: Their adjusted gross income was $8.82 million -- but they somehow managed to write off charitable contributions (isn't there a 2% limit?) and knock that AGI down to $1.95 million. Net taxes, $529,636.

Yeah, that's a lot of taxes, but I'd love to be able to make 78% of my income vanish before filing time. Effective tax rate, 6% based on the full gross; 27% based on the adjusted gross. Note that the higher figure is the tax bracket for people who make less than $91,400 per year. The top rate is 35%. Six percent is less than people who make under $7,300 would pay. And does anyone who isn't listed as a dependant on someone else's return make less than $7,300 a year?

As for where Cheney's (and everyone else's) taxes go, out of that $529,636, $153,594.44 went to the military; $21,185.44 went to education.

Oh -- BTW, neither Texas nor Wyoming have state income taxes, so the Cheneys luck out no matter which of those states they're officially living in, the Constitution and Presidential election rules notwithstanding. Unlike those of us in, say, California, who get to pay up to an additional 9.3% to the state, assuming you make over $ 40,346 per year. The average rate here is 5.05%.

The only state with a higher top rate is Vermont, at 9.5%, which has a much higher bottom rate, 3.6%, than California's 1%. Suck on that, Jim Jeffords and Patrick Leahy...

In case you're wondering, a breakdown of how state tax rates compare is here. Your mileage may vary.

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