How did income taxes in the United States get so confusing?
87495
I have no idea but they are and seems the laws are changing also! What I use to look forward to I now want to pull my hair out lol
1180896
Well it was so the IRS could add a whole bunch of words so that no one would ever understand it and we would all just do what they say. Seriously they just added more words. When the code was first written it was around 11,000 words, now it is over 7 million. And did you know that each section in the IRS code has it's own definitions? They can make any word mean whatever they want in the code. We are all so confused about it that we just do as we're told. How many CPA's or tax advisors to you think have read a book 10x longer than the bible? They are taught by the IRS to do what the IRS tells them. Read it yourself and make sure to look up all the definitions. We legally don't even have to pay!
1165154
Example 1:  Capital Gains Tax cut.\n\nCapital Gains tax was cut by republicans from 27 percent to 15 percent.  The capital gains tax is a tax that you pay on a certain type of investment income called a "Capital Gain" an example of a capital gain is the profit you make when you buy stock and it goes up in value and then you sell it.  Capital Gains is one type of income that is not made by working.  \n\nCapital Gains taxes are paid by people who make lots of money on capital invetments, by definition they must make more than they lose on their other capital investments in order to pay the tax.  Capital Gains taxes are not placed on retirement investment such as 401K with a few exceptions.\n\nMost middle class people make a tiny percent of their income through capital gains, this is because most middle class people ahve their stock in a retirement account which doesnt pay capital gains.  Most "RICH" people have already maxed out their retirement acocunt contributions and make a much larger share of their income on capital gains.  \n\nSo when there is a capital gains tax cut, the Rich benefit the most.  Their investment income (that they make from NOT WORKING) is now taxed at a much lower rate than most americans WORKING income, including their own.  Many rich people have also figured out a way to turn their regular income into Capital Gains income through creative (but not illegal) accounting, so they are also getting a tax cut on their normal income. \n\nThis is an example of a TAX CUT FOR THE RICH.  Massive tax cut for the rich, hardly anything for middle class.\n\nExample 2:  Dividend Tax Cut\n\nCongress passed a Dividend Tax cut this year, reducing the tax rate on another type of investment income (a type of income that doesnt involve WORK), where people who own shares of stock and other assets receive cash payments for each share they own.  Repulbicans slashed the top divided rate from 39.6 percent to 15 percent.  This is now much lower than the income tax rate that the same people would pay on their income if they worked for it.\n\nAgain, regular people don't own enough stock to get very many dvidents.  Througought my entire life, I think I've made about 1000 dollars on dividends.  THE RICH benefit greatly from these tax cuts, since many rich people, especially older rich people, recieve a lot of dividend income.  \n\nGeorge Bush, on his 2005 tax return, saved about 26,000 dollars from these tax cuts.  I didn't make enough of this investment income to even qualify.  Most americans don't.\n\n\nExample 3:  Estate Tax\n\nFinally, the republicans tried unsuccessfully to cut the ESTATE TAX down to 0%.  The estate tax is a tax that people like Paris Hilton pay, when they inherit more then 2 million dollars from a dead realative that for some reason, has not already transferred his entire fortune to his children already.  If you don't inherit more than 2 million dollars then you don't pay the tax. If you inherit 2 million and two dollars, then you only pay estate tax on the 2 dollars in excess of two million.  \n\nIt is not a tax on the dead person, it's a tax on the person taht recieves all that money by inheriting it. (NOT WORKING)\n\nI don't think i have to explain why the middle class doesn't pay this tax.\n\nSo there are three examples of "TAX CUTS FOR THE RICH" That most people will never benefit from.  I hope that is clear.  The basic philosophy of republicans seems to be that the higher your income and the more income you make from not working, then the more you should get back in tax cuts.  \n\nI hope people realize how unfair the recent republican tax cust have been and vote this November.
1046319
I can't believe how many people answered your question with more taxes.   Have more taxes ever turned out to bring the American people anything but more government spending?\n\nWe recently had a tax cut, and govt collected tax $s actually went up.  Increasing the tax rate puts less $ in people's pockets.  Less money means less spending, less spending cripples the economy, which means less job, which then in turn means less people paying into social security.\n\nYou would need to privatize the system bc when the govt spends or invests money they do a poor job with it (remember the 1 bill Katrina $s that were misused).  Or you would need to create a wealth building system that  allowed employees to place their money in safer option investments.   You could easily outperform the returns you receive from social security, it's not that hard.  \n\nIf you actually thought taxes were the issue, how about giving Americans ALL the money they earn with the fairtax.   That way, you're not taxed unless you buy something that's not a necessity, so you control your tax bracket, not uncle sam.  Plus, ever illegal immigrant and visitor to the US now pays into SS with everything that they buy when they are here.
228635
There are tax law changes every year. If I were you I would look at last years taxes and this years taxes and see what is so different. Last year you might have been at the very end of one tax bracket and this year your income might have pushed you into a different bracket. If you had them done by someone most places will give you a comparison. If they did it will show you where it changed form last year you this year. If you cant find it there then I would start looking for errors. If you find some correct it with a 1040X. Good luck
797029
The Constitution restricted the ablility of the Feds to tax and specifically forbids direct taxes like income tax, social security taxes and other payroll deductions.  It was changed by Constitutional amendment.  The promise was the payroll tax would never be more than 1% and would only apply to the very rich and would go away as soon as the cost of the Spanish American war was paid off.\n\nI guess they changed their minds.
69890
The government provides protection and services (think highways, police, etc) that contribute to our ability to earn money. It can generally be assumed that people earning money in this country are benefitting from these services, and thus taxes are levied upon them.
23672
The first income tax was instituted in the North during the Civil War.  After the war our current income tax was instituted in 1913 with the adoption of the 16th amendment to the US constitution.
345180
It depends on were you live. Taxes are different in different states.
476258
yes it's about a glitch that h and r block did...now there's a lawsuit and everyone who filed taxes through them is entitled to it
1132548
Flat taxes never work.  a) They favor the rich b) Paying 35% on everything you purchase would theoretically work, except everyone would be INCREDIBLY pissed off.  Especially on big purchases on a house.  Nobody wants to pay $40,000 in sales tax on their house.  c) The Federal Government can't take in all the money and then redistribute it as it sees fit to the states.  Not only will it piss off every state in the union, but it also forces the states to reduce/eliminate taxation, otherwise people would have no money.  The only way the flat tax in this case would work, is if you reduced it to 10%, allowed the states to do a flat tax of up to 10% in addition, and then having a smaller graduated income tax.
22607
well, when illegal immigrants work in the US, the gov't doesn't know they're there. And if the gov't doesn't know they're there, then they can't be taxed.  The problem with this is they're working and taking money from US pockets and enjoying American freedoms and rights without really contributing back to the American society.  Furthermore, it would help the US economy if they spent the money in the US, but most likely, they're going to send the money back to their family in wherever country they hail from.  Thus, both our social works that taxes goes towards and our economy gets the shaft. :)
54627
You aren't the first to ask. http://www.salestax.org/  \n\nHowever, taxes seem to be more about redistribution of wealth than fairness.
1114795
STINKIN LICONLN!!!\n\n\nIn 1862, during the Civil War, President Lincoln and Congress created the office of Commissioner of Internal Revenue and enacted an income tax to pay war expenses. The position of Commissioner still exists today. The Commissioner is the head of the Internal Revenue Service.
596311
The original income tax system established by the New Deal was necessary to provide federal support to thousands of Americans during the Great Depression.  At the time of its institution, it greatly assisted in spurring the American economy out of the desperate times.\nThe prior 126 years of American history details a financial different picture than today's America.  For one, the country was a lot smaller with few people.  The great immigration boom did not occur into the earlier part of the 20th century.  Governmental obligations were not as substantial as today's responsibility, and this is not just social programs.  We could not raise enough money through tariffs, excise taxes, and property taxes, to overcome our current debt obligations.  Furthermore, if this was the only form of tax, it would place a substantial burden on the middle class and imports.  Considering our current export/import ratio, foreign importeres would simply have to cease distribution to stall the American economy.\nI do however feel the system created by the New Deal has been bastardized into the current system, which is excessively in equal towards corporations and wealth Americans vs. middle/low income Americans.  I believe the system could be streamlined at both the federal, state and local levels.  Currently, although we do not pay high income tax (countries in Europe fair a lot worse) we pay additional taxes and government surcharges every day.  Ex. total taxes and fees on your personal cellphone bill average approximately 24% - 28% over your usage charge.\nNow, as to find ways to cut spending....yes, there are definitely areas in our budget to cut spending? will this get done?...only by the perservenence of the American people and the general understanding of what are taxes are paying for.  The "pet projects" or massive government failures (thing Boston Big Dig) continually drain our economic resource, and when our governmental debt is so strangulating that we have to keep increasing our cap, we will never be able to recede our government spending to levels able to sustain our American People.\nSome of the solutions presented: flat tax, purchase tax, etc, all sound equitable but each do have their own loop hole.\nPersonally, I would like to have a flat tax.  I would like to at the beginning of each year write a check for a fixed amount of money to the government for a percentage of my forecasted earnings for the upcoming year and not have anything come out of my check for the rest of the year.  But with this money that comes out, I would like programs which make sense - good education, good healthcare, good social security.  Our children should not have to suffer, our elder should not want for anything and every American should be able to get quality healthcare/preventative maintenance to sustain life.
561152
It is income that was earned in another country, but is taxed in the US.  It is taxed at a much lower rate 5.25%.
1163896
No debate here, happens every day. In some cases the taxes owed on a property exceed the original mortgage amount, some deal huh. If you live in a liberal state like California or New York its even worse. The taxes are so high you need a mortgage just to pay them. An interesting result of such high costs is people are moving out of the high cost states and to places like Nevada and Arizona. There goes the neighborhood!