Snider returned to Brooklyn on a sad note on July 20, 1995, when he appeared in federal court, a couple of miles from where Ebbets Field once stood, as a criminal defendant. Snider and another Hall of Famer, the former Giants first baseman Willie McCovey, pleaded guilty to tax fraud for failing to report thousands of dollars earned by signing autographs and participating in sports memorabilia shows. “We have choices to make in our lives,” Snider said. “I made the wrong choice.” [NYT]
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Refundable Tax Credits: They’re for Trust Fund Babies Too!
So 47% of our nation’s households will pay no federal income tax this year. Well, stick it to those rich people, then! Help the deserving poor, like Buffy Richgirl.
Buffy is a struggling 26-year single mom with three kids and a checkered romantic history. Yet she does the best she can, earning $16,500 in various jobs in 2009 while taking courses in applied tattoology at the local college, while Mom helps with the kids.
Let’s see how a beneficent tax law helps this struggling mom make ends meet.
Some key facts:
Name: Buffy Richgirl.
Age: 26
Filing status: Head of Household, because of 3 dependent kids – Biff, Cloyd and Muffy.
Income: $16,500, all salary, no withholding.
Housing status: Daddy gave her $200,000 in 2008 to buy a house, which she bought in December 2009. She formerly lived in various apartments or with Daddy.
Educational status: She’s taking tattoo technology courses half-time at the local college (her Mom helps out with the kids), where she ran up $3500 in qualified expenses.
Prospects: She’s the beneficiary of a trust from late Grandpa that will kick out $5 million when she hits age 30, but which distributes nothing right now.
Other cash sources: She gets occasional non-taxable child support, and she has a non-interest bearing checking account with some Daddy cash.
The tax results? Adjusted Gross Income: $16,500. Taxable Income: $0. Taxes withheld and paid: $0. Tax refund: $17,009.
So how did our heroine double her income via her 1040? Through the miracle of “refundable credits” – tax credits that generate a refund even if your tax computes to zero. She wins with:
• An $8,000 First-time homebuyer credit.
• A $5,634 earned income credit.
• $2,025 in additional child credits
• $950 refundable education credit.
Don’t believe me? Look at her 1040 for yourself:
So what’s the point? It’s very hard to fine-tune the tax law. That’s especially true with refundable tax credits. No matter how carefully you try to “target” a group with tax benefits, there will be collateral unjust enrichment.
Now don’t you feel better about that check you have to send IRS next week?
Happy 100th Birthday, Federal Income Tax!
This month marks the 100th anniversary of the ratification of the 16th Amendment or – […]
Taxes Are the Reason Eric Cantor Walked Out on Joe Biden
The deficit talks led by Vice President Biden faced a dispute over whether to include the Pentagon in any spending caps or deficit triggers, but the office of House Majority Leader Eric Cantor (R-Va.) said Friday that taxes were the only reason the talks collapsed Thursday.
“There were some disagreements on defense, but the issue is being greatly overblown to distract from Democrats’ push to raise taxes,” spokesman Brad Dayspring said. “The tax issue was the sole reason the talks reached an impasse, but it’s important to recognize that the group made great progress in identifying trillions of dollars in spending cuts that can serve as a blueprint for a potential compromise,” he said. [The Hill]