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Old 01-06-2010, 09:53 AM
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Lightbulb 2010 Withholding tax changes

Congress Tinkers with Withholding Tax Tables for 2010
by SusanAnne Hiller

Recently, retired military have received e-mail messages notifying them of a withholding tax increase. The email states:
NO ANNUAL COST OF LIVING ADJUSTMENT (COLA) WILL BE ADDED TO MILITARY RETIRED PAY IN 2010.
DUE TO RECENT LEGISLATION YOUR FEDERAL WITHHOLDING TAX HAS CHANGED.

After much investigating and several discussions with the IRS, it appears the Democrats have played a “cash-flow trick” on working Americans and are taking more out of American’s paychecks across the board–all the while touting the Making Work Pay tax credit.

The trick, when looking at the new withholding tax tables for 2010 as compared to post-stimulus 2009, buries an increase in federal withholding taxes–for all income categories–basically giving the government an interest-free loan until current year taxes are filed next year. Some would blame the increase in withholding on the Making Work Pay tax credit being spread out over 12 months as compared to 2009, which was only over 9 months, but this would be impossible as some middle class wage categories carry an increase in the withholding tax of over $200 per pay period.

Unlike the middle class wage earners, who are going to see huge amounts taken out of their paychecks, unless they increase their exemptions on their W4 form, it’s an increase that most wouldn’t even notice–$10 or $20 in some cases. Here are some of the “highlights” of the new 2010 withholding tables:

1.) Congress has lowered the threshold to capture more wages that qualify to owe taxes–across the board. For example, in 2009 the withholding tax threshold began at weekly single wage levels of $138. In 2010, that same wage is lowered to $116. In short, instead of the taxable wage starting at $138, it is now down to $116–which changes the income threshold and taxes even poorer Americans.

For married couples, the change in the weekly base taxable wage changes from $303 in 2009 down to $264 in 2010. These lower wage thresholds can be seen throughout the new withholding charts for weekly, biweekly, semi-monthly, monthly, quarterly, semiannual, and annual, as well as daily and miscellaneous pay periods.

This across-the-board reduction in the initial wage threshold increases the number of wage earners who would have to pay taxes.

2.) Instead of seven (7) wage categories, there are now nine (9) wage categories. The new structure allows for direct taxation on the middle class with these wages broken out into smaller categories. The direct hit on the middle class withholding taxes can be seen on all of the new tables. Additionally, the IRS could not explain these changes.

Let’s look at the actual numbers for one category and compare them from 2009 to 2010:
2009 Biweekly, Single, Payroll Period, after subtracting withholding allowances

Not over $276: $0 in taxes
Over $276 – $400: 10% payroll tax
Over $400 – $1,392: $12.40 plus 15% of excess over $400
Over $1,392 – $2,559: $161.20 plus 25% of excess over $1,392
Over $2,559 – $6,677: $452.95 plus 28% of excess over $2,559 (Notice the large salary range)
Over $6,677 – $14,423: $1,605.99 plus 33% of excess over $6,677
$14,423: pays $4,162.17 plus 35% of excess over $14,423

Let’s look at the new numbers for 2010 Biweekly, Single, Payroll Period, after subtracting withholding allowances

Not over $233: $0 in taxes
Over $233 – $401: 10% payroll tax
Over $401 – $1,387: $16.80 plus 15% of excess over $401
Over $1,387 – $2,604: $164.70 plus 25% of excess over $1,387
Over $2,604 – $3,248: $468.95 plus 27% of excess over $2,604 (Notice the large salary range is gone)
Over $3,248 – $3,373: $642.83 plus 30% of excess over $3,248 (Notice the substantial increase and 30% tax rate on these wages)
Over $3,373 – $6,688: $680.33 plus 28% of excess over $3,373
$14,450: pays $4,169.99 plus 35% of excess over $14,450

These patterns of additional withholding can be seen throughout the new charts for the 2010 tax year for single and married persons. It appears that everyone earning a paycheck is affected, not just retired military; social security payments will remain the same.

Why would the Democrats tinker with the withholding taxes and, ultimately, cause more stress on Americans and businesses? Why would the Democrats create more wage categories and deliberately target the middle class with a huge withholding increase and 30% tax rate? Are the Democrats trying to backfill the deficits they created in 2009? Because taxpayers will have overpaid the federal government payroll taxes, will they be eligible to get back this additional withholding money in a tax refund when filing in 2011?

Do taxpayers in the hardest-hit wage categories even realize that their paychecks are going to be significantly lower, unless they make the necessary changes?

Maybe there is a good explanation for the increase in the withholding taxes from 2009 through 2010, but I remain skeptical, because inherently, Democrats do not have the capacity to reduce taxes and typically make up the revenue somehow.

Get your calculators out and you do the math. Go here for 2009; start on page 4. Go here for 2010; start on page 39.

And you should remember this and the fact that House and Senate Republicans united against the stimulus bill, which may have been the trigger to all of this. And Obama and Congress should remember this from December 21, 2009:

"After years of irresponsibility, we are once again taking responsibility for every dollar we spend the same way families do. It’s true that what I’ve described today will not be enough to get us out of our fiscal mess by itself. We face a deficit that will take some tough decisions in the next year’s budget and in years to come to get under control. But these changes will save the American people billions of dollars. And they’ll help to put in place a government that’s more efficient and effective, that wastes less money on no-bid contracts, that’s cutting bureaucracy and harnessing technology, that’s more fiscally responsible and that better serve the American taxpayer.” ~President Obama

Last edited by BLUEHAWK; 01-06-2010 at 03:06 PM. Reason: punctuation
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Old 01-06-2010, 01:39 PM
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Old 01-07-2010, 12:48 AM
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Arrow Unemployment Rates By County

The Decline the Geography of a Recession
Jan 2007 thru October 2009

Follow link to play video:

http://cohort11.americanobserver.net/latoyaegwuekwe/multimediafinal.html
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Old 01-07-2010, 12:53 AM
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Old 01-07-2010, 01:34 AM
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Old 01-07-2010, 07:27 PM
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Exclamation

IRS expects to answer only 71% of phone calls this tax season

By David S. Hilzenrath
Thursday, January 7, 2010; A12




If you call the Internal Revenue Service for help this tax season and someone actually picks up the phone, consider yourself lucky.

The agency has set a goal of answering only 71 percent of calls to its toll-free help line this year, and those fortunate enough to get through are expected to spend an average of 12 minutes on hold, according to a report released Wednesday by an IRS ombudsman.

"This level of service is unacceptable," National Taxpayer Advocate Nina E. Olson said, calling it the "number one most serious problem for taxpayers."

IRS spokeswoman Michelle Eldridge said the agency "is committed to providing the best possible service to every taxpayer," and she said the agency has been dealing with a rising volume of calls. "The bottom line is we have answered millions more phone calls in the last two years than ever before," Eldridge said.

While crediting the agency with progress on some fronts, such as confronting identity theft, the report accused the IRS of pursuing collection strategies that harm delinquent taxpayers and actually make it harder for the government to collect unpaid taxes.

The report identified a potentially major loophole in an IRS plan announced this week to regulate people who charge money to prepare tax returns, saying the plan applies only to those preparers who must sign the returns. Olson said workers who collect information from taxpayers and draft returns should be regulated even if they are not the ones who ultimately sign the returns on behalf of their firms.

And, in her annual evaluation of the IRS, Olson said that the agency appears to have overstated its success collecting delinquent taxes, a key measure of its performance. In a 2008 report, with no explanation, the IRS said it had collected $32 billion less for the three previous years than it originally had reported -- off by 27 percent. The new numbers were simply marked with an "r" -- "which, as the footnote helpfully explains, means 'revised,' " Wednesday's report to Congress said.

"This failure to highlight and explain revisions of such magnitude is inexcusable and erodes confidence in any data reporting by the IRS," Olson wrote.

A list of problems

The Taxpayer Advocate Service, which Olson heads, is a unit within the IRS that is supposed to help taxpayers resolve problems with the agency and recommend improvements in the way the IRS operates.

IRS spokesman Terry Lemons said the agency should have been clearer when it revised the collection numbers, which originally double-counted some collections. The agency is considering expanding its new regulatory plan along the lines Olson suggested, he added. The IRS also took exception to the criticism of its collection strategies.

Listing some of the agency's biggest problems, Olson said the IRS undermines its own cause by automatically filing liens against delinquent taxpayers without finding out whether the taxpayers have any property that could be attached.

The tax liens do little good if the taxpayer has no assets, Olson wrote, and they can damage the taxpayer's credit score and employment prospects. That can make it harder for the taxpayer to earn an income and pay the IRS. It can also increase the odds that the taxpayer will become a drain on the Treasury by ending up on food stamps or unemployment benefits, Olson wrote.

In addition, the IRS forces some delinquent taxpayers into unrealistic payment plans, Olson wrote, because it fails to consider the totality of their financial troubles -- such as credit card debts, school loans and medical bills.

The IRS countered that the agency uses liens to preserve the government's priority over other creditors and that studies have shown the tactic to be effective, according to the report. Olson's estimates of money collected might be conservative because they don't take into account settlements motivated by the threat of a lien, the IRS said.

Hung up

Olson focused her strongest criticism on the IRS's chronic difficulty answering the phones, saying unanswered calls frustrate taxpayers, leading some to give up instead of filing returns and leaving others to make errors that the IRS will then be burdened with correcting. In effect, the agency is planning to be unable to answer about three out of every 10 calls, Olson said in a news release.

"That's a pretty incredible indictment" of the agency's attitude toward customer service, said Pete Sepp, vice president of the National Taxpayers Union, an advocacy group, but he added that part of the blame rests with a complex and changing tax code.

As recently as the 2007 fiscal year, the IRS answered more than eight out of 10 customer service calls. The success rate fell to about five out of 10 in fiscal 2008, when the agency was inundated with calls related to economic stimulus payments. In fiscal 2009, which ended Sept. 30, the success rate rebounded to about seven out of 10, just under the goal for the current fiscal year -- and only a hair better than the performance in 1998, when Congress passed a law to reform the agency.

The IRS attributes the problem to a variety of factors, including unusual demand related to federal legislation, the recession and natural disasters such as Hurricane Katrina, according to Wednesday's report. The agency said its phone service has received high marks in customer satisfaction surveys, but Olson said those surveys would not reflect the many callers who hung up while still on hold.

What is the toll-free number to call for assistance?

"You're not going to put it in the story, are you?" IRS spokeswoman Eldridge replied.

That was a joke, her colleague interjected.

When a reporter called 800-829-1040 on Wednesday, it took about two minutes to navigate an automated system and get through to an IRS screener, who asked the topic and said he would transfer the call to the appropriate area. "We estimate your wait time to be between 10 and 15 minutes," a recording said while the call was on hold for a second time.

"We apologize for your delay." Actual wait time: about 14 minutes.

http://www.washingtonpost.com/wp-dyn...010601485.html
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Old 01-08-2010, 07:06 PM
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Flush Congress in 2010. Vote against every incumbent all the time. 50 % of the adults in this country are too lazy to EVEN register to vote. A good percentage of the other 50 % blindly re-elect the same career-criminal-politicians every election cycle because they believe the propaganda their "party" produces, when in reality both "parties" are corrupt to the core and work together to destroy this great country. Change things.

Larry
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