Stupid Tax Tricks

[dougo]

I'm working through my income tax forms, and I just realized something amusing/frightening: for the lowest income bracket, the federal capital gains tax rate (5%) is smaller than the Massachusetts capital gains tax rate (5.3%)! In the past, my state income tax has always been less than half of my federal income tax, but because such a large portion of my 2003 income was capital gains (and my earned income was very small, consisting only of 6 months of grad student stipend), my effective income tax rate (i.e. fraction of adjusted gross income) is 4.6% state and 6.0% federal. That's just wacky!

Hm, I guess this means less of my money went to national defense (e.g. invading Iraq) and more of it went to local schools (and the Big Dig?). That's fine by me.

[I bet an enterprising reader can reverse-engineer my adjusted gross income from the above data. I'd offer a prize to anyone who can figure it out (within, say, 5%), but I have to pay my tax bill in the near future so all you'll get is the pride of seeing your username in my journal...]

Comments

Re: Your Income

[mshonle.livejournal.com]

Yeah, the discretionary spending (i.e. all spending that isn't "madatory") is split half and half with defense. When people suggest we cut the defense budget to pay for other things, it's just a very small picture. Even though I'm a Greenish guy, I would like to see social security privitized... after the money needed to not default to those we already promised social security is aquired we could fund better education, healthcare/food/housing for all of the poor (i.e. those who can't afford it), and we'd kind of be in a nice socialist-capitalist-like space where theres huge incentives to work (food and housing doesn't give you "stuff" and people like stuff).

If I were to cut the defense budget for anything, it would be to famine relief. There's a huge AIDS problem in Africa people don't like to talk about. But cutting defense for social programs is a little strange, give that the current social budgets are alreayd out of whack.

(The opinions expressed in this message are subject to change.)