Tuesday, April 17, 2007

Tax Time: Who Are Your Dependants?

I am mailing my taxes in today, and accompanying the paperwork are two nice sized checks for the US Congress, and their leaders Nancy Pelosi and Harry Reid, to divvy up and spend. This is the first year since 2000 I have mailed my taxes in. I have used TurboTax Online in the past and sent in my return electronically so that I can quickly get my refund. This is the first year I will owe taxes ever in my life, so why hurry up the process?

As I filled out the 2007 1040-ES (I now have to pay estimated taxes for 2007 due to the start of my own business, so had the pleasure of filling out two tax packages this spring) I pondered the lines regarding dependants. Who are my dependants? The form allows me to claim myself, my spouse and my children. The underlying concept is that the government is kind enough to allow me to list all those that are sustained by my earnings and list them in order to shelter some of my income from taxes.

If you really think about it, the number I should be allowed to place there is far greater than the 6 I am allowed. Allow me to point out two related stories:

1. The top 50% of earners in the US pay 96.54% of all Federal Income Tax. N-I-N-E-T-Y S-I-X percent. Look around you. The other person you see is not paying taxes. YOU are.

2. According to a news story released yesterday, economist Gary Shilling’s recent research showed that slightly over half of all Americans – 52.6 percent – now receive significant income from government programs.

Interesting…funny how those numbers seem to be related somehow.

So, by my figuring, I should be able to list somewhere around 150,000,000 dependants. So, my deductions for dependants should be about $450 billion dollars. Using that figure, I estimate the US Government owes me a refund of about $449+ billion dollars. Stupid? So is the tax code. And so are the politicians that run congress that are at this very moment planning the largest tax increases in the history of the country.

Hold on to your britches. Your pants are about to be ripped off.

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