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Posted
Sep 08 2009, 08:28 AM
by
Karen Datko
Rating:
Money Blog: Smart Spending Blog - MSN Money
This post comes from J.D. Roth at partner blog Get Rich Slowly.
Note: Although I try to keep GRS a politics-free zone, today's topic is inherently political. I've stayed as neutral as possible in the article, but I know that there'll be some political discussion in the comments. Please keep conversation civil, as always.
Because I was frustrated with my own ignorance about the U.S. federal budget and our tax system, I recently spent 12 hours researching a variety of tax topics. From my research came two articles: my recent short guide to the federal budget and today's post, which answers some of my personal questions about taxes.
In the earlier post, we tried to take a few small steps toward understanding the federal budget. We looked at where the U.S. government spends its money. But where does it actually find the cash to spend?
Of the $2.333 trillion in U.S. government receipts:
- $1050 billion (45.0%) comes from individual income taxes.
- $939 billion (40.2%) comes from social insurance/retirement receipts.
- $221 billion (9.5%) comes from corporate income taxes.
- $76 billion (3.3%) comes from excise taxes.
- $20 billion (0.9%) comes from estate and gift taxes.
- $28 billion (1.2%) comes from Federal Reserve deposits.
- $16 billion (0.7%) comes from other miscellaneous sources.
As you can see, nearly half of government receipts come from individual income taxes. Naturally, taxes are a hot-button issue. They have been since this nation was founded. (To be fair, though, the driving force then was "taxation without representation." Modern complaints are against taxes in principle, I think.)
During my research, several questions about taxes occurred to me. In today's article, I'll do my best to share the answers I found.
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Posted
May 08 2009, 05:40 AM
by
Karen Datko
Rating:
Money Blog: Smart Spending Blog - MSN Money
This post comes from partner blog The Dough Roller.
Dave Ramsey's "Baby Steps" to financial peace have become a popular way to get control of finances. In case you're not familiar with the Dave Ramsey approach to money, here are the seven Baby Steps:
- $1,000 to start an emergency fund.
- Pay off all debt using the "debt snowball."
- Three to six months of expenses in savings.
- Invest 15% of household income in Roth IRAs and pre-tax retirement.
- College funding for children.
- Pay off home early.
- Build wealth and give.
While there are those who quibble with some aspects of these steps, by and large it's a sound approach to money management. If my children, when they leave home, decide to follow the Dave Ramsey way of handling money, I'll take great comfort that they are headed in the right direction.
But what about those of us who aren't just starting out or recovering from a financial meltdown. When many of us look at Dave's Baby Steps, we realize that we have been taking many of those steps all at the same time. For example, we have a lot more than $1,000 in our emergency fund, yet we also have nonmortgage debt, we save for our children's education (my son starts college in three years), we save for retirement, and we give money to charity.
All of this raises the question we are going to address: Should we "Dave Ramsey our finances," and if we did, would we be better off?
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Posted
Apr 01 2009, 11:21 AM
by
Karen Datko
Rating:
Money Blog: Smart Spending Blog - MSN Money
Many smokers aren't finding the cost of cigarettes a laughing matter. The federal tax on a pack jumped Wednesday -- April Fools' Day -- from 39 cents to $1.01. The tax increase is so big, it's being called "historic."
Higher federal taxes apply to other tobacco products, so even those smokers who have taken to rolling their own to save money can't escape them. (To see how your preferred product is affected, click here.)
The tax -- passed to fund an expansion of the State Children's Health Insurance Program -- is expected to prompt about 1 million smokers to quit.
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Posted
Feb 19 2009, 03:37 PM
by
Karen Datko
Rating:
Money Blog: Smart Spending Blog - MSN Money
If you've been drowning your economic sorrows in a pint of ale, that could get more expensive. Beer is being eyed for additional taxation in a number of states facing budget shortfalls.
In Oregon, legislators have proposed raising the beer tax from the current $2.60 per barrel to $49.61, a jump of about 1,800%. Lawmakers say that amounts to 15 cents more per 12-ounce glass. The beer industry says the price jump would more likely be $1.50. The tax hasn't been raised in more than 30 years.
Don't panic yet, you folks in microbrew paradise. An editorial in The Oregonian says, "Excuse our cynicism, but we've sat through this particular barroom discussion enough times to know that it is leading nowhere" (and also notes that state funding for alcohol and drug treatment has been severely cut).
Here's what's going on in some other states:
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Posted
Feb 18 2009, 01:56 PM
by
Karen Datko
Rating:
Money Blog: Smart Spending Blog - MSN Money
Joe the Salesman returns to his hotel room in Virginia for the night and clicks on a pay-per-view movie. We know what that movie is about (wink, wink).
Pretty soon that movie may very well cost a little more.
Today, the Virginia House of Delegates sent to the governor's desk a 10% tax on pay-for-view movies watched in hotel rooms. Of course, not all pay-per-view movies are adult entertainment. But it's just one way states are looking to tax porn to fill mounting budget gaps.
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Posted
Nov 19 2008, 06:26 AM
by
Karen Datko
Rating:
Money Blog: Smart Spending Blog - MSN Money
This post comes from Andrea Dickson at partner blog Wise Bread. Right now may be the perfect time to take a second job. The holiday season is gearing up in most retail stores, and chains everywhere are hiring seasonal workers. Whether it's stocking shelves, mopping floors, filling displays or selling goods, the shopping season is ramping up and now is the time to locate and nab those holiday gigs. If you, like many Americans, are deep in credit card debt, you might be wondering how you are going to pay it off. Or maybe you're not in debt, but need to make some extra cash to put a down payment on a car or condo, or start your own business. Maybe you just want to buy your sweetheart (or cat) something really special this holiday season. Basically, you need more money, and you need it soon.
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