The Tax Rascal may hate taxes, but we also believe that the law is the law, and that lawmakers specifically should obey the rules they expect the rest of us to follow.  Of course, not everyone believes the same as we do.

Take Congressman Nick J. Rahall II for example.  The congressman owns a house in his home state of West Virginia (in the district he represents) and like many members of Congress, owns property in Washington, D.C. as well.

Now D.C. has something called a homestead tax deduction, which basically means tax payers who own property in the city and actually live in that property as their primary residence (versus renting it out or running a business, etc.) are entitled to… Read more…

How much of your paycheck will go to government in 2013?

The answer, of course, partly depends upon which state you live in, but the simplified answer can be stated this way: way too much!

Patrick Tyrrell at the Heritage Foundation has an excellent piece out that breaks down the approximate amount an average middle class single filer would pay in each state (see image to the right).  Naturally we need to control for certain variables, but this thought experiment is nothing short of scary regardless of one’s personal situation.

The federal income tax for 2013 will be around 28%, depending on what happens with the fiscal cliff.  Add to that the Social Security and Medicare payroll tax at 15.3% (projected 2013… Read more…

The Tax Rascal and Rapid Tax would like to extend our deepest sympathies and condolences to the victims, families and everyone else affected by the tragedy in Newtown, CT earlier today.  In the immediate aftermath of this horrific shooting, we lift of up our thoughts and we pray for peace and healing.

When Nancy Pelosi was Speaker of the House, she famously quipped that Congress would have to pass the 2010 omnibus healthcare bill in order to find out what was in it.  Congress complied, and now America is starting to find out what is inside the bill come law: taxes, taxes and more taxes.

The Internal Revenue Service recently released new rules for investment income taxes on capital gains and dividends earned by so-called “high income” payers.

Enter: the first surtax to be applied to capital gains and dividend income at 3.8%.  But the surtax is more complicated than it seems, because it applies to a broad range of investment securities such as stocks, bonds, commodity securities, specialized derivatives and more.

In addition,… Read more…

Across the nation local governments are having to cut back due to the constraints of economic reality.  Yet as everyone is asked to sacrifice, some unions simply refuse to do so.  There are those who believe they are owed not just guaranteed salary increases and cadillac health benefits but much, much more.

Do you need a nose job?  Maybe some liposuction?  Or do you need some hair removed from your upper lip?

If you do, make sure you become a teacher in Buffalo, NY!

Teachers in Buffalo have what may be the most incredible, and most egregious “health care” benefits of all: free plastic surgery.

And when I say free, I mean it.  The 3,400 teachers in Buffalo who are eligible for free plastic surgery… Read more…

You might not have to pay as much as you think, or anything at all

The first thing everyone wants to know when it comes to late taxes is whether they will be charged any penalties and interest. In fact, fear of penalties is enough to keep some people from filing their taxes. But some late filers don’t have to pay any penalties at all. Arming yourself with information can help you make the best decisions when it comes to dealing with your late taxes.

No penalties

If you’re due a refund, you don’t owe the IRS any penalties or interest. That’s right. None. Zippo. Zilch. That means you can file a late return without having to worry about getting… Read more…

The ongoing debate in economic philosophy is the effect of tax policy on economic growth.  Some argue that tax increases to the wealthy can provide additional funding to federal and state agencies and provide much needed aid to the middle and lower class. Furthermore, centrally planned investment in infrastructure can create jobs and spur economic growth. The alternate theory is that reducing tax rates for everyone, including the rich, and austere government spending can produce the desired effect of private sector investment and job creation. What is the right approach, and is there evidence to support either philosophy?

The graph below illustrates the data obtained from the Bureau of Economic Statistics and the Tax Policy Center. From 1970 to 2011, the… Read more…

The gay marriage debate extends all the way to the tax code

President Barack Obama’s surprise announcement last week of his support for gay marriage has the whole country talking about either the equality or sanctity of marriage, depending on your political perspective.

Though the President’s announcement has no practical effect on government policy, it has exposed the shifting fault lines in America’s culture wars. Since 1996, when Congress and President Clinton passed the Defense of Marriage Act (DOMA) defining marriage exclusively as the legal union of one man and one woman, public opinion has changed across the political spectrum. As Slate observes,

Democrats, who initially opposed gay marriage and then were evenly divided, are gradually uniting

… Read more…

According to the Tax Foundation, the day you have to pay your taxes is also the day you pay off your taxes

This year, in a fitting twist of fate, Tax Day and Tax Freedom Day both arrive on April 17. What is Tax Freedom Day? Don’t worry, it doesn’t involve crazies in tricorn hats carrying posters of President Obama with a Hitler mustache (though trust me, April 17 will see its share of crazy protesters). No, Tax Freedom Day is designated annually by the Tax Foundation as the day that Americans have earned enough income to pay off their tax burden.

Americans will have to work 107 days to pay off the 29.2% of their income that… Read more…