Taxes (was Coburlin. he used to be Burlin?). Message #31 Posted by bill platt on 15 Mar 2005, 10:13 a.m., in response to message #30 by Frank Boehm
In the US, you are required to report income. It does not matter where it comes from; technically, all income must be reported (though some categories are unofficially left alone--except when someone is dragged in for something else--then the IRS goes over you with a fine tooth comb).
Most states also have tax requirements: and here it varies, but many have both an income tax and a "sales" tax. If you buy anything, from anywhere, your state may require (though few ever check up for small stuff) you to pay the 6% or so tax. (I paid it last year, for my calculators). If you sell, you are not required to collect it, unless you are registered as a business and have a sales tax number.
The US federal tax code has different income categories, and one is "hobby" which is what many who dabble in stuff have to claim as. Hobbies are limited in what losses you can offset, whereas businesses may offset all losses against gains. The point of the hobby category is to prevent all citizens from becoming "businesses" just to support their favorite hobbies---if you have a business, and it does not make a profit 2 (3? can't remember) out of every 5 years, then you are forced to report as a hobby.
So, you see, your average U.S. citizen probably pays just as much tax, as a percentage of income, as a European, yet the European is a "socialist" and the american is a "capitalist". Go figure. The Federal budget is about 1/3 of GDP, and yet we are not socialist? Nope.
The only real difference between Europe and the U.S. (regarding taxes) is that in Europe, the Rich pay their fair share, wheras in the U.S., the wealthy pay at a lower rate than the worker (28%) since they only make "investment" income and pay into social security only up to that level paid by a person making $88,000. And they take advantage of the many legal "tax shelters" to get the rate even lower.
When I was married with no children, with two working, family income $40,000, which is at the lowest "marginal" rate, we paid, in total of federal, social security, medicare, state, sales tax, property tax, personal property tax, 45% of our income.
John Forbes Kerry paid about 10% against his gross income last year.
Republicrats and Demopublicans are the same here, too. Neither will actually reduce government (though interestingly the Clinton era was more frugal than either of the Bush years).
So much for truth in government and taxes.
Regards feom the West side of the pond.
Bill
Edited: 15 Mar 2005, 10:14 a.m.
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