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Death and taxes

It’s April and I’ve started working on my Federal Income Tax return. 2010 was the last year before I retired and it was the peak salary year of my career. My wife was still working and the stock market did well. I’m going to pay a boatload of taxes. I haven’t finished adding it all up, but the amount is already staggering. Indeed, I was wondering aloud to Mrs. Conspiracy whether we received back from the government equal value for the taxes we are paying.

Sometimes when trying to appreciate what a lot of money is, it helps to list other things that cost the same amount. My entire federal income tax bill this year will equal about  the cost of a knee replacement.


The knee replacement cost I have in mind was based an anecdote last week from someone who had a couple of them. Just to see if this was in line, I typed “what does a knee replacement cost?” in a search engine, and the first match returned had  what a knee replacement cost at Kapi’olani Hospital in Honolulu. I swear I didn’t make this up.

25 Responses to Death and taxes

  1. avatar
    misha April 6, 2011 at 10:37 pm #

    “My entire federal income tax bill this year will equal about the cost of a knee replacement.”

    This will really date me, but when there was the “National Lampoon Radio Hour,” there was a skit in a French restaurant. The maître d’ told the diner, in a heavy French accent, the specialty of the house was “a punch in zee nose, and a kick in zee knee.”

    After the sound effects, the diner exclaims “what was that all about?” To which the maître d’ says, “house rules. I trust it was to your liking.”

  2. avatar
    Lucas D. Smith April 6, 2011 at 10:48 pm #

    Dear Dr Conspiracy,

    I am sorry to hear about the absorbent of federal income taxes that you are forced to pay.

    What are your thoughts on annual property taxes?

    I myself believe in a society free of annual property tax.

    I own property in the Dominican Republic and we don’t ever have to pay an annual property tax. Unless you paid more than $5,000,000 RD peso for your property you are not forced to pay any annual property tax.

    However, in the capitol (Santo Domingo), there is a new never before heard of municipality tax on property which was approved in December 2010. The first taxes ever are due this year of 2011. These new taxes are illegal according to the Dominican Constitution. My wife and I are not going to pay. Neither is my mother-in-law or ANYONE else that I know. There is no way that Dominican Republic will start to confiscate property. They can’t even enforce electricity bills and water bills without running the risk a machete wielding revolt.

    I also own property here in the United States, in Iowa. Unfortunately, notwithstanding challenging litigation, I have no choice but to pay the annual property tax. I have paid of a couple of time but I have managed to rack up a number of ‘special’ annual property taxes which I never paid. These taxes arise from the city having to mow my little front yard and stuff like that. At times my house in Iowa has sat empty for lengthy amount of time while I am out of the county and the grass is not cut nor is the snow shoveled. These become ‘special’ property taxes and if I don’t pay them then my house is confiscated by the city and sold to the highest bidder. Then I have two years to pay the highest bidder their money back (with interest and penalties) otherwise they can apply for the real deed to property.

    In Iowa property taxes are pretty low. My usual annual is about $200. However, that’s not the point. I don’t care if they were only $20 every year.

    A couple of arguments are always made in favor of annual property tax. One is that it is a centuries old practice in England and being that it is it must obviously also be just, essential and ethical. What about slavery then? Why did we all do away with that? That took centuries to do away with, so why shouldn’t annual property taxes be abolished? Many countries around the world do not pay annual property taxes. As a matter of fact the ‘threat’ of annual property tax is one of the leading reasons why Puerto Rico will not make the change from US Commonwealth to US State.

    Second argument in support of annual property taxes is that municipality (cities and townships) would wither away and die without them. Most states feels the same way about state sales tax. Yet there are several US states that do not have a state sales tax. There’s always other options. Annual property taxes should not be an option.

    At very least, annual property taxes should cease when an individual becomes a senior citizen.

    Again, sorry to hear about your absorbent federal income taxes, Dr Conspiracy.

    If anyone wants to see my property taxes (or pay them!) you can see them by going to http://www.iowataxandtags.gov/. Then click on ‘Linn’ county. Then click on ‘online payments’. Then ‘Pay Property Taxes’. Then click on the bottom where its says that you have ‘read and understand’. Then, finally!, type in ‘Smith Lucas’.

  3. avatar
    sarina April 6, 2011 at 11:57 pm #

    “I own property in the Dominican Republic”
    Bingo! I knew Lucas Smith taped that “Kenyan BC video” in the Dominican Republic! Those kids are “Dominicans” not Kenyans.

    Wow is there where you have a property? Is not a very nice place to live.

    His name on Ebay was ” Colmado naranja” Spanish for “Orange Store” (a type of small grocery store) they use the same name for small stores in Puerto Rico where I used to live for many years. I would like to see Lucas birth certificate maybe he is an illegal immigrant, Dominican?
    Hmmm…

    Got you Lucas!

  4. avatar
    Lucas D. Smith April 7, 2011 at 12:07 am #

    sarina:
    “I own property in the Dominican Republic”Bingo! I knew Lucas Smith taped that “Kenyan BC video” in the Dominican Republic! Those kids are “Dominicans” not Kenyans.

    Wow is there where you have a property? Is not a very nice place to live.

    His name on Ebay was ” Colmado naranja” Spanish for “Orange Store” (a type of small grocery store)they use the same name for small stores in Puerto Ricowhere I used to live for many years. I would like to see Lucas birth certificate maybe he is an illegal immigrant, Dominican?
    Hmmm…

    Got you Lucas!

    Wow, where have you been for the last 2 years? Everybody in birther/obot cyberspace knows that I live most of the time in the Dominican Republic. I love Republica Dominicana.

    You are such a great detective. Treat yourself to a beer on me. I will paypal you the funds. Lol!

  5. avatar
    Rickey April 7, 2011 at 2:53 am #

    Lucas D. Smith:

    Again, sorry to hear about your absorbent federal income taxes, Dr Conspiracy.

    What’s an “absorbent” income tax? Is that a quicker-picker-upper?

  6. avatar
    sarina April 7, 2011 at 8:12 am #

    Lucas you forgot to show your BC, what are you hiding?!

  7. avatar
    Dr. Conspiracy April 7, 2011 at 8:53 am #

    Lucas D. Smith: I am sorry to hear about the absorbent of federal income taxes that you are forced to pay.

    What are your thoughts on annual property taxes?

    I really wasn’t complaining so much about my taxes as I was the cost of a knee replacement. The Income Tax, at least for me, is progressive, and I wouldn’t have had to pay lot if I hadn’t earned a lot.

    I don’t have any special thoughts about property tax. It’s not especially high in South Carolina.

    I am, however, a real fan of inheritance taxes (the so-called “death tax”). In 2010 fellow county resident Roger Milliken, with an estimated net worth of $1 billion, died, and presumably his heirs avoided paying any estate taxes whatever (there was no estate tax in 2010). I think it is generally a bad thing to create a class of people who do not work for a living, but live off the money made by an ancestor.

  8. avatar
    misha April 7, 2011 at 9:16 am #

    Dr. Conspiracy: I think it is generally a bad thing to create a class of people who do not work for a living, but live off the money made by an ancestor.

    Yeah, like Paris Hilton.

  9. avatar
    roadburner April 7, 2011 at 9:17 am #

    Rickey: What’s an “absorbent” income tax? Is that a quicker-picker-upper?

    the bill comes printed on a sham-wow

    🙂

  10. avatar
    misha April 7, 2011 at 9:17 am #

    Dr. Conspiracy: I don’t have any special thoughts about property tax. It’s not especially high in South Carolina.

    Try New York, or New Jersey – the highest in the nation.

  11. avatar
    misha April 7, 2011 at 9:27 am #

    roadburner: the bill comes printed on a sham-wow

    True story: Vince Shlomi is Israeli – born April 25, 1964 in Haifa, Israel. And his actual first name is “Offer.” http://en.wikipedia.org/wiki/Vince_Offer

  12. avatar
    Mary Brown April 7, 2011 at 9:30 am #

    We are taxed rather heavily here in conservative Nebraska. We have a state income tax that costs us about a fifth of our federal tax, a rather high property tax, sales taxes, and licensing fees for cars that are very high. Until the government here realized what was happening some folks were getting Oregon Licenses. My family lives in Oregon and I quickly thought that there just could not be THAT many Oregon transplants in the Omaha metro area. Eventually the government here caught on and that has stopped. I do agree about the so called “death tax”. We are creating a system of welfare for the very lazy rich.

  13. avatar
    misha April 7, 2011 at 9:35 am #

    Mary Brown: I do agree about the so called “death tax”. We are creating a system of welfare for the very lazy rich.

    Which is what a Jesuit professor once said to my class.

  14. avatar
    Sef April 7, 2011 at 10:10 am #

    Mary Brown:
    We are taxed rather heavily here in conservative Nebraska. We have a state income tax that costs us about a fifth of our federal tax, a rather high property tax, sales taxes, and licensing fees for cars that are very high.Until the government here realized what was happening some folks were getting Oregon Licenses.My family lives in Oregon and I quickly thought that there just could notbe THAT many Oregon transplants in the Omaha metro area.Eventually the government here caught on and that has stopped.I do agree about the so called “death tax”.We are creating a system of welfare for the very lazy rich.

    Until you’ve lived in New York you have no understanding of the word “tax”. Of course, for the most part, NY residents get good value for their money.

  15. avatar
    misha April 7, 2011 at 10:14 am #

    Sef: Until you’ve lived in New York you have no understanding of the word “tax”.

    Amen, bro.

  16. avatar
    Rickey April 7, 2011 at 11:16 am #

    Sef: Until you’ve lived in New York you have no understanding of the word “tax”.Of course, for the most part, NY residents get good value for their money.

    I grew up in Westchester, but could not afford to live there now. I sometimes check out the real estate section of the Times on Sunday and the property taxes In Westchester are staggering.

    Property taxes are more reasonable farther north (where I live), and as you say we get good value. We have little crime, a good police force, and an excellent highway department which promptly plows our streets and keeps them free of potholes.

    On the other hand, I also have to pay $30/month for water and have to pay a private company to pick up my trash.

    I have no problem with property taxes per se, although it’s only been in the past few years that they have made them more equitable. It used to be that properties here were reassessed only when they were sold. The people across the street from me have lived there for more than thirty years, and until a few years ago their property was still being assessed at what they paid for it back in the seventies.

  17. avatar
    Thrifty April 7, 2011 at 2:55 pm #

    Sef: Until you’ve lived in New York you have no understanding of the word “tax”.

    I bought my car at a dealership on Long Island. I live in Delaware. The dealer said that if I lived in New York, I’d have to pay a sales tax of like 12%, but that since I live in sales tax free Delaware, there was some sort of “highway use tax” or something. I think he was referring to the document fee. He went to look that up, and when he saw that it was only 2.5%, he seemed kind of agitated and envious.

  18. avatar
    Paul Pieniezny April 7, 2011 at 3:28 pm #

    The real cost of a knee replacement overhere is 10,000 euros. Most of this is paid by the Belgian NHS. Depending on the number of people sleeping in the same room as you after operation during the 3-4 days’ convalescence, people overhere would pay between 650 euros (room with 4 patients) or 2,650 (when you want a “single room”).

    There are private “Hospital stay charge” insurance schemes to cover all that, they typically cost between 100 and 500 euros a person per annum depending on the client’s age.

    I am not going to elaborate much on my tax returns which for 2010 is going to be very complicated (it involves two teacher wages, one teacher pre-pension allowance, one pansion and income as an independent translator for me and my wife) but I can assure that I will end up paying almost double the REAL cost of a knee replacement. So, that is about the US price of a knee replacement.

    It is quite obvious some of our tax paid ends up subsidizing the NHS, whatever I and my wife may pay openly before taxes into it. Money well spent if it is indeed the reason why real costs are lower than in the USA.

    Still, my commiserations, Doc.

    If it helps people, Belgium is not the place to go to for cheap knee replacements. India is.

  19. avatar
    misha April 7, 2011 at 5:33 pm #

    Thrifty: I live in sales tax free Delaware

    Delaware, just below Philly, does not have a sales tax nor income tax. BTW, it is not taxes, but quality of life. NJ, which has the highest tax burden in the States, is also the most densely populated state. My cousin moved there, with breathtaking property taxes, so her children could go to public school in Princeton.

    Paul Pieniezny: If it helps people, Belgium is not the place to go to for cheap knee replacements. India is.

    Or Thailand.

  20. avatar
    Thrifty April 7, 2011 at 5:49 pm #

    misha: Delaware, just below Philly, does not have a sales tax nor income tax.

    Uh, what? I’ve lived in Delaware my whole life, and though you’re right about sales tax, my 2010 tax returns would care to disagree with you on the matter of income tax.

  21. avatar
    misha April 7, 2011 at 5:56 pm #

    Thrifty: my 2010 tax returns would care to disagree with you on the matter of income tax.

    When did Delaware start a personal state income tax? I stand corrected if I was wrong about that.

  22. avatar
    Keith April 7, 2011 at 9:38 pm #

    misha: Or Thailand.

    Why not combine it with an Australian Holiday?

    US health costs bring Beazley to his knees

  23. avatar
    Paul Pieniezny April 8, 2011 at 5:25 am #

    Keith: Why not combine it with an Australian Holiday?

    US health costs bring Beazley to his knees

    Well, I knew New Zealand was cheaper, but the real price in Australia seems much lower too.

    The reason why I mentioned India is that the Dutch health system, which is a mishmash of a privatized national health system (a bit similar to Obama’s healthcare, it seems), always on the lookout for saving money, at one time decided to cover the costs of knee replacement in a number of countries (including Belgium and India, but not Thailand). This is tantamount to saying the medical standards overthere are OK. And they speak English.

    Of course, the problem with comparing these prices is that you have to look at other factors. Disclosure: my 20,000 is close to a 40% takeout by the taxman.

    And having relatives with small children in Australia, I know that the largesse of the Australian NHS and tax system does not extend to helping out families with children. Cheap or even free schooling, child benefit and tax breaks is a West European thing. Australia is a country of immigrants after all.

  24. avatar
    Keith April 8, 2011 at 10:41 am #

    Paul Pieniezny: And having relatives with small children in Australia, I know that the largesse of the Australian NHS and tax system does not extend to helping out families with children.

    I have no idea how it compares to your country, but I think Oz is pretty generous, starting with a ‘Baby Bonus’ and going on right through school and after.

    There most certainly free state run schools, but they are tragically underfunded and often have to assess ‘voluntary’ donations from parents, and constant fund raising fetes. That part is pathetic, I agree.

    benefits-payments-and-services/family-payments-and-services/family-payments-and-allowances

  25. avatar
    Paul Pieniezny April 9, 2011 at 9:15 am #

    Keith: I have no idea how it compares to your country, but I think Oz is pretty generous, starting with a Baby Bonus’ and going on right through school and after.

    There most certainly free state run schools, but they are tragically underfunded and often have to assess ‘voluntary’ donations from parents, and constant fund raising fetes. That part is pathetic, I agree.

    benefits-payments-and-services/family-payments-and-services/family-payments-and-allowances

    My nephew was mainly interested in pre-school facilities, so his wife could also look for a job, as she has always worked in Belgium The baby bonus is indeed much higher in Australia than overhere (5 times actually), but they already have the number of children they wanted. Where they live (quiet place in Victoria) using such a facility would have cost them far more than his wife could ever dream of earning.

    Note that in Belgium, parental leave (three months’ full pay) can be combined with birth benefit, and can be taken by the father (if the mother does not work anyway, for instance) I think the baby bonus is supposed to compensate for pre-school care when the mother wants to go to work again.

    According to
    http://en.wikipedia.org/wiki/Income_tax_in_Australia#Family_Tax_Benefit

    My three children would get me 9300 AUD annually. Here I am getting 230 euros in tax break and 590 in actual child benefit monthly .The system granting a tax rebate for child care is more generous too. There is no means testing. My nephew calculated that though he ostensible got more for his two small children in Oz (in Belgium , third and fourth children get more child benefit than the first and second), means testing meant he was better off in Belgium.

    (and now you know he earns more than 42,559 AUD – should have kept my mouth shut)