Police Officer Preparation & Law Enforcement Resource - Archive

Yet another thing that pisses me off. I did my youngest son in law's taxes for him this year. He's a truck driver and earned just over $30K and has two kids. They withheld only about 1200 bucks from his checks for income tax, but with the earned income credit, he got $6500 from the IRS. That's just wrong.

Then the poor slob made some remark about the rich not paying taxes. When I finished with him, he was damn near in tears.....:toetap05:

But it's damn little wonder the debt is so high if nearly half the people in this country are not only not paying taxes, but those of us that do are giving them even more money.


Nearly half of US households escape fed income tax - Yahoo! Finance (http://finance.yahoo.com/news/Nearly-half-of-US-households-apf-1105567323.html?x=0&.v=1)


WASHINGTON (AP) -- Tax Day is a dreaded deadline for millions, but for nearly half of U.S. households it's simply somebody else's problem.

About 47 percent will pay no federal income taxes at all for 2009. Either their incomes were too low, or they qualified for enough credits, deductions and exemptions to eliminate their liability. That's according to projections by the Tax Policy Center, a Washington research organization.

Most people still are required to file returns by the April 15 deadline. The penalty for skipping it is limited to the amount of taxes owed, but it's still almost always better to file: That's the only way to get a refund of all the income taxes withheld by employers.

In recent years, credits for low- and middle-income families have grown so much that a family of four making as much as $50,000 will owe no federal income tax for 2009, as long as there are two children younger than 17, according to a separate analysis by the consulting firm Deloitte Tax.

Tax cuts enacted in the past decade have been generous to wealthy taxpayers, too, making them a target for President Barack Obama and Democrats in Congress. Less noticed were tax cuts for low- and middle-income families, which were expanded when Obama signed the massive economic recovery package last year.

The result is a tax system that exempts almost half the country from paying for programs that benefit everyone, including national defense, public safety, infrastructure and education. It is a system in which the top 10 percent of earners -- households making an average of $366,400 in 2006 -- paid about 73 percent of the income taxes collected by the federal government.

The bottom 40 percent, on average, make a profit from the federal income tax, meaning they get more money in tax credits than they would otherwise owe in taxes. For those people, the government sends them a payment.

"We have 50 percent of people who are getting something for nothing," said Curtis Dubay, senior tax policy analyst at the Heritage Foundation.

The vast majority of people who escape federal income taxes still pay other taxes, including federal payroll taxes that fund Social Security and Medicare, and excise taxes on gasoline, aviation, alcohol and cigarettes. Many also pay state or local taxes on sales, income and property.

That helps explain the country's aversion to taxes, said Clint Stretch, a tax policy expert Deloitte Tax. He said many people simply look at the difference between their gross pay and their take-home pay and blame the government for the disparity.

"It's not uncommon for people to think that their Social Security taxes, their 401(k) contributions, their share of employer health premiums, all of that stuff in their mind gets lumped into income taxes," Stretch said.

The federal income tax is the government's largest source of revenue, raising more than $900 billion -- or a little less than half of all government receipts -- in the budget year that ended last Sept. 30. But with deductions and credits, especially for families with children, there have long been people who don't pay it, mainly lower-income families.

The number of households that don't pay federal income taxes increased substantially in 2008, when the poor economy reduced incomes and Congress cut taxes in an attempt to help recovery.

In 2007, about 38 percent of households paid no federal income tax, a figure that jumped to 49 percent in 2008, according to estimates by the Tax Policy Center.

In 2008, President George W. Bush signed a law providing most families with rebate checks of $300 to $1,200. Last year, Obama signed the economic recovery law that expanded some tax credits and created others. Most targeted low- and middle-income families.

Obama's Making Work Pay credit provides as much as $800 to couples and $400 to individuals. The expanded child tax credit provides $1,000 for each child under 17. The Earned Income Tax Credit provides up to $5,657 to low-income families with at least three children.

There are also tax credits for college expenses, buying a new home and upgrading an existing home with energy-efficient doors, windows, furnaces and other appliances. Many of the credits are refundable, meaning if the credits exceed the amount of income taxes owed, the taxpayer gets a payment from the government for the difference.

"All these things are ways the government says, if you do this, we'll reduce your tax bill by some amount," said Roberton Williams, a senior fellow at the Tax Policy Center.

The government could provide the same benefits through spending programs, with the same effect on the federal budget, Williams said. But it sounds better for politicians to say they cut taxes rather than they started a new spending program, he added.

Obama has pushed tax cuts for low- and middle-income families and tax increases for the wealthy, arguing that wealthier taxpayers fared well in the past decade, so it's time to pay up. The nation's wealthiest taxpayers did get big tax breaks under Bush, with the top marginal tax rate reduced from 39.6 percent to 35 percent, and the second-highest rate reduced from 36 percent to 33 percent.

But income tax rates were lowered at every income level. The changes made it relatively easy for families of four making $50,000 to eliminate their income tax liability.

Here's how they did it, according to Deloitte Tax:

The family was entitled to a standard deduction of $11,400 and four personal exemptions of $3,650 apiece, leaving a taxable income of $24,000. The federal income tax on $24,000 is $2,769.

With two children younger than 17, the family qualified for two $1,000 child tax credits. Its Making Work Pay credit was $800 because the parents were married filing jointly.

The $2,800 in credits exceeds the $2,769 in taxes, so the family makes a $31 profit from the federal income tax. That ought to take the sting out of April 15.

I would like to thank former President Bush for the child credit thing.
It made a heck of a difference on my tax REFUND.
Not to bring it up, but I didnt see anything like it from Clinton and his
Dem buddies..........

I think they need to do away with an income tax, and just do a standard sales tax on everything. Everybody pays in.

But, the government would screw that up too.

Nice news considering I paid in five digits to the feds, four digits to the state of NY and another 4 digits to the state of NJ.

Nice news considering I paid in five digits to the feds, four digits to the state of NY and another 4 digits to the state of NJ.

Same here, only I had to pay only to one state. But I'm friggin' retired!

There have been times in my early life that I didn't make much money, but I ALWAYS had to pay some income tax. It used to be that if you made anything over the standard deduction, you had to pay tax on it. That earned income credit has just gotten out of hand. My son in law getting that kind of welfare is just asinine and he's obviously one of many in this country. And thats' what it is, welfare, not "middle class tax breaks".

I would like to thank former President Bush for the child credit thing.
It made a heck of a difference on my tax REFUND.

If I'm not mistaken, that child tax credit expired after the 2009 tax year, and was not renewed by the current administration, so it may not be of help in years to come.

If I'm not mistaken, that child tax credit expired after the 2009 tax year, and was not renewed by the current administration, so it may not be of help in years to come.

Nope, it's in next years budget.

TPC Tax Topics | 2010 Budget - child Tax Credit (http://www.taxpolicycenter.org/taxtopics/2010_budget_childtax.cfm)

Apparently after 2010 it's supposed to go away, but I bet it doesn't. Obama has made noises about wanting to double it. This is an old story, but it gives his perspective on it. I think we're going to be in a world of **** if they don't quit spending and giving all these tax cuts to get votes.

Obama's Middle Class Tax Credits: What Do They Mean for You? - ABC News (http://abcnews.go.com/Business/obama-middle-class-tax-credits/story?id=9659186)

So bascially yall are saying that as a young single male I'm about to get F***** when it comes to taxes...

So bascially yall are saying that as a young single male I'm about to get F***** when it comes to taxes...

Speaking from experience, it is the only F$%&*&NG you can be sure of!

So bascially yall are saying that as a young single male I'm about to get F***** when it comes to taxes...

Or couples without kids.

The US Congress really needs to look at Greece to see our future. Trouble is, the EU isn't going to be there to bail us out.

I really doubt the Feds are going to pay attention to whats happening to Greece. There isn't any long term planning that goes on within the US government anymore.

Or couples without kids.


Tell me about it! We had to pay more than $3k in federal taxes this year (with both of us having zero deductions). Tax season sucks if you're a middle class couple with no kids and live in an apartment in a reasonably high cost of living area.

As much as the Democrats railed against it when PRESIDENT BUSH proposed and got it passed.
It might be interesting to see who jumps on the band wagon if President Obama tries to renew it.
My kids are now too old to count, so I havnt got much from it since last year.
But it was nice while it lasted.
Besides we all know we are getting rich in LEO work:skep:


Nope, it's in next years budget.

TPC Tax Topics | 2010 Budget - child Tax Credit (http://www.taxpolicycenter.org/taxtopics/2010_budget_childtax.cfm)

Apparently after 2010 it's supposed to go away, but I bet it doesn't. Obama has made noises about wanting to double it. This is an old story, but it gives his perspective on it. I think we're going to be in a world of **** if they don't quit spending and giving all these tax cuts to get votes.

Obama's Middle Class Tax Credits: What Do They Mean for You? - ABC News (http://abcnews.go.com/Business/obama-middle-class-tax-credits/story?id=9659186)

Actually, I think the Demos just railed against the capital gains tax cuts. They think that rich people should pay for everything.

Both parties have been buying votes for years by reducing taxes for the regular people. That's all nice and ****, but you can't do that and keep spending money. When people are not only NOT paying taxes, but getting thousands more back in refunds than they had withheld, that's welfare, pure and simple. And we can't afford to keep doing that.

Or couples without kids.

The US Congress really needs to look at Greece to see our future. Trouble is, the EU isn't going to be there to bail us out.

The future is inflation. Inflation through printing money and paying higher interest on government bonds. It's the hidden tax that they take from your savings/retirement/pension without ever having to raise taxes.

Actually, I think the Demos just railed against the capital gains tax cuts. They think that rich people should pay for everything.

Both parties have been buying votes for years by reducing taxes for the regular people. That's all nice and ****, but you can't do that and keep spending money. When people are not only NOT paying taxes, but getting thousands more back in refunds than they had withheld, that's welfare, pure and simple. And we can't afford to keep doing that.

Witholding is evil. Everyone should pay quarterly and manage their own money so they can do it. I don't need the nanny state to "withold" anything. I would much rather see exactly what I am paying rather than have hidden employer matching payments and witholding. I hate getting a tax refund because that means they had my money for the whole year when it could have been working for me.

I don't mind refunds for what was witheld nearly as much as the "tax credits" people get for taxes they didn't pay. There are some filers that get more money back then they paid in. Now that's welfare.

Witholding is evil. Everyone should pay quarterly and manage their own money so they can do it.

I agree, but you're talking about a society where the average credit card debt is $20,000.:rolleyes5: The mortgage foreclosures that dynamited our economy say what a bunch of financial morons Americans are. Do away with withholding and half the people wouldn't HAVE the cash on hand to pay quarterly and far less annually.

How many people use escrow to pay for their property taxes and home insurance? I pay my property taxes when they come due rather than let the mortgage company have my money for a whole year, but I suspect I'm in a small minority.

You can't do away with withholding. It does annoy me the fed penalize you if you don't let them take out enough.

The future is inflation. Inflation through printing money and paying higher interest on government bonds. It's the hidden tax that they take from your savings/retirement/pension without ever having to raise taxes.

I agree. Why it hasn't started yet is beyond me. The difference in it being a tax is it benefits no one. The government suffers from it too and will cause it to collapse. Greece is the consummate welfare state now, retirement age is 54.

Most here weren't working stiffs during the inflation period of the 70's that started under LBJ and continued through Carter. And a lot had to do with the high government spending. That's when welfare programs really started to run amok. I was getting 6 or 7% raises while inflation was double digit.

It took Reagan to MAKE people bite the bullet when he tightened down credit for a couple of years. He wasn't very popular the first two years of his term.

But it is the obvious next event to look forward to.

RDS what exactly did Reagon do?

He reduced tax rates to help restore economic growth

He passed the anti drug abuse act in1988, which established the death penality for drug king pins.

He also put restrictions on mogatgage lending

He got everybody fired up about the drug war, zero tolerance and just say no.

And one of my favorites... Reagan’s first executive order, was to eliminate price controls on oil and natural gas. Production soared, and the price of oil declined by over 50 percent.


You either loved him or hated his policies.

He was the first President I ever voted for!

RDS what exactly did Reagon do?
He tighten down the money supply. Inflation is caused when so much money is out there that it each dollar becomes less valuable. Take money out and the value of it goes up. The effect on people was that credit was hard to get.

He got a lot of heat for it, but he supported Volcker, the chairman of the Federal Reserve. Volcker was hung in effigy on Wall Street during that time.

People are simple minded, they hate the disease, but they don't want to suffer the temporary effects of the cure. That's what's happening in Greece right now. The people are rioting and going on strike because the government is having to cut back on welfare and other garbage. They don't get it that they will lose everything if they don't take some cuts now.

That will be the problem here. If they cut the Earned Income Credit now and nearly half the people have to not only pay taxes, but some will lose the unearned money and the howling and sniveling will begin. It will certainly be political suicide for someone to start implementing changes, but we're screwed if they don't.

He reduced tax rates to help restore economic growth

He also put restrictions on mogatgage lending

He got everybody fired up about the drug war, zero tolerance and just say no.

And one of my favorites... Reagan’s first executive order, was to eliminate price controls on oil and natural gas. Production soared, and the price of oil declined by over 50 percent.


You either loved him or hated his policies.



Those were what helped. Killing drug dealers was neither here nor there. It did nothing for anything, including the drug trade.

The one criticism I have for Reagan was that he dumped all the energy saving programs that Carter started. I do believe that if we had continued those policies and done more serious research, we wouldn't be in the mess we're in now in the Middle East. But he immediately threw all of them out the window to the delight of the oil companies.

It was Nixon BTW, not Carter that instituted price controls. Nixon was every bit as bad as Carter when it came to domestic policies.

Most here weren't working stiffs during the inflation period of the 70's that started under LBJ and continued through Carter. And a lot had to do with the high government spending. That's when welfare programs really started to run amok. I was getting 6 or 7% raises while inflation was double digit.


RDS then you remember when Carter had a cap on pay raises at 7% but inflation was still running 12-15% so we were taking a beating. The city did a partial pension pickup to put a few bucks in our pockets and it cost them $1.00 for a $1.00 raise since it didn't incur any pension contributions but the cities are crying about it now.

RDS then you remember when Carter had a cap on pay raises at 7% but inflation was still running 12-15% so we were taking a beating. The city did a partial pension pickup to put a few bucks in our pockets and it cost them $1.00 for a $1.00 raise since it didn't incur any pension contributions but the cities are crying about it now.

Oh yeah. Our city didn't do a thing for us. We finally got a pension pickup in the 80's, but we had to agree to forego raises for the next few years. But during the 70's, we just had to continually reduce our standard of living.

We had a different housing crisis back then. Remember the goofy 5 year loan with a balloon payment at the end of the term? Everyone was betting (like with APR's later) that the rate would go down and they could refinance. Unfortunately, it only went up and when the balloon payment came due, they couldn't refinance so they lost their homes. I avoided that, but watching others made me resolute to never take anything other than a conventional mortgage. I remember when the interest only loans came out. My wife and I heard about them on the car radio and I turned to her and said that we're screwed. People can now buy houses they can't afford and that's exactly what happened.

Oregon had (maybe still does) a state home loan program for veterans that was way below market. I was tickled to get a 7.5% loan when everyone else was pay 15%+. Those were tough times.

One of the problems, I think is that the Fed is scared to raise the prime interest rate. It's barely above zero, which is making loans too easy to get and creating the need to print more money. But again, what ever they do is going to hurt in the short term and people will start screaming when it happens.

When Carter came we were only making about $8000.00 per year so you couldn't lower your standard of living much, we just wanted to eat. I believe Special Duty then was about $4-$5 per hour to fight the drunks on Friday and Saturday nights.


One of the problems, I think is that the Fed is scared to raise the prime interest rate. It's barely above zero, which is making loans too easy to get and creating the need to print more money. But again, what ever they do is going to hurt in the short term and people will start screaming when it happens.


This is going to come back and bite, the interest rate should actually be higher now.

I was making about $15K in 1976. That same year, they sent me down to San Marcos, Texas for a two week school. I learned quickly that the guys there made about half of what I was so I didn't enter into any conversations about wages. One guy, a detective from some S.O. was making $450 a month. I didn't meet a single person there from Texas who didn't work a second job. It made me quit complaining for a long time.

Texas and some other states are Right To Work States which means:

A state law that prohibits required union membership of workers. It's a little more complicated than it sounds,

http://www.answers.com/topic/right-to-work-laws

Texas and some other states are Right To Work States which means:

A state law that prohibits required union membership of workers. It's a little more complicated than it sounds,

right-to-work law: West's Encyclopedia of American Law (Full Article) from Answers.com (http://www.answers.com/topic/right-to-work-laws)

Yeah, I know. I grew up down there. That's also why I didn't go back after the Army when I saw what people made up here.

I love Texas, especially the people. But I can't imagine doing this job without union protection and the benefits afforded me over the years up here.

RTD
Yeah, I know. I grew up down there. That's also why I didn't go back after the Army when I saw what people made up here.

I love Texas, especially the people. But I can't imagine doing this job without union protection and the benefits afforded me over the years up here.

What part of TX?

TX. has really been good to me, a few rough spot's. I have lived in several states and 1 foreign country, but TX was calling to come home.

What part of TX?

TX. has really been good to me, a few rough spot's. I have lived in several states and 1 foreign country, but TX was calling to come home.

I grew up around Lubbock. It was a great place to grow up and I strongly considered moving back when I retired. I know of no other place where the people identify themselves with the state so strongly. My wife, who grew up in Oregon was impressed by how courteous the people were. The problem was my kids and grandkids are all up here and I like being around them.

I mean no disrespect to the state, the people nor especially my brother and sister officers down there. But there's not much appealing to me about working in a right to work state, especially where public employee unions are against the law. I attribute my pension and standard of living to the fact I had a strong union when I was working. They did some things I didn't care for, but all in all, they made my life a whole lot better.

I didn't get rich, but I never had to work a second job to make ends meet and I was able to save enough money to send my kids through school. Even retired, I'm building up pretty good college funds for my grandkids. I was also never afraid of losing my job or even getting jerked around by a vindictive supervisor or commander. If they messed with me, they had better have a good reason and I didn't have to hire a lawyer to protect my rights at work. And believe me, with my abrasive personality (a Lt told me once I had one), w/o a union, I probably wouldn't have lasted.......

Do your pensions out there include your medical and what kind of percentage of wages do they do for your retirement? Here in Ohio medical is optional through the pension board and was about $85/mo when I retired but for me and my wife now it would be about $700+/mo. The pension fund operates off it's own assets and isn't directly funded by the cities or state.

It's complicated. You have the choice of 2.8, 2.6, 2.4 or 2.2% of your last years wages (not counting OT) for every year of service. Taking 2.8% means if you die first, your spouse will get 25% of your pension. If you take, 2.6, they get 50% and on down the line to 2.2% and they get 100% if you die first. Someone retiring at 30 years and taking 2.8% gets 84%.

I retired in 1998 and am making quite a bit more now than when I was working and I took the 2.6%.

We have to pay for our medical after retirement, but we get it at city rates. It's about the same as yours although mine will go down in August because I go on Medicare. I will be buying a supplemental for me and I will still get regular insurance for my wife.

Mine is funded through the city. It's for police and fire only. There is a tiny assessment on property taxes in the city to fund it. As I posted earlier, we negotiated away us having to pay into it. However, as of Jan. 1, 2009, all cops and firemen hired go into the state pension system. That one is a nightmare to figure out. They've changed it several times, but now new hires get something like a 401K that the agency contributes to. Your pension is based strictly on how much money you have in it when you retire.

84% WOW! The most we can get is 72% after 33 years. We do get a small cost of living each year which is one time fixed amount but for me it's only about $80/mo. Our plan is similar in that I took a reduced benefit to leave my wife a pension.

We get our COLA based on the year's CPI or 2%, which ever is lower. However, on the years that the CPI is more than two percent, we only get the two, but the excess goes into sort of a bank for years that it's lower. For instance, if the CPI is 3%, I still only get a 2% raise. However, if it's only 1% the next year, I get that one percent back and get my 2% raise.

I was making about $60K base pay when I retired 12 years ago, now I'm getting a pension of close to $70K and we haven't been getting the 2% on several years. I also socked away at least half my OT when I was working so I have a good nest egg built up that I can draw from as needed. I have nothing to complain about, at least financially

One of the reasons I did my best to put money away was that our retirement system wasn't that great until 1988. The first 18 years I worked, you only got 2% of a patrolman's pay (no matter what your rank) up to a maximum of 60% at 30 years. It was quite a drop in income for people so I started preparing for that eventuality. Fortunately, they changed it before I retired.

I know some may look at me with disdain when I say I didn't do this job for the thrill of it, I was a mercenary. My obligation was to my family first and foremost. If I couldn't have made a good enough living to support them well, I would have never gone into this career. I'm glad I could do okay at it because I enjoyed the hell out of the job. But that job is in my past and my family is still around me.

Be Afraid. You earlier said that inflation was bad for government. While that's true for tax revenue, your pension is an example of how they make themselves solvent. Your increase is capped to 2%. The debt is also a fixeed amount in dollars. A 10% inflation rate for a few years would reduce Portlands exposure to pensions because they are capped at 2%. Same thing for the feds. Once that debt gets large enough, it makes more economic sense for the governemnt to inflate it away rather than rely on tax revenues. We've already seen how reluctant they are to cut spending.

Think of how Portland would look at a 10% inflation rate driving revenue in taxes up only 9% and at the same time the pension outlay is only increasing by 2%. That's win-win for any socialist. Heck, they'd probably be touting the "maximum increase allowed by law."

You don't have to tell me about inflation, I lived through it, remember?

The state law has a provision that allows the legislature to increase the pension over the 2% limit in cases like that.

And as I said, mine is based on a property tax levy that's stable, not like income tax. And Oregon doesn't have a sales tax.