Agree.
I’ve seen programmes where people win millions on the lottery for example, and they lose a massive chunk of it in taxes. Not at all what was advertised.
It would still would be nice to win any amount of money though 
1 Like
Reminds me of a film I saw many years ago
It was about a guy who searched out lottery winners so they could be paid, and his sidekick the IRS man 
Not only that but it will push you to into a higher tax bracket. So you pay taxes on your winnings, plus you pay taxes again during tax season in a higher tax bracket.
I don’t really mind when the Jackpot is $1,500,000,000.00
You make it seem that one would pay a higher percentage on its whole income, when it’s really only marginal rates were talking about. You wouldn’t lose out on your regular income
1 Like
Winnings are taxed as regular income.
Yes, but taxes are applied in brackets.
So even if you make over $510,301 you don’t pay 37% on your whole income. Only the amount over $510,301
Yeah I already mentioned brackets previously.
I was looking at this. Its all complicated. I won’t claim to be an expert on it, lol.
https://www.creditkarma.com/tax/i/paying-taxes-on-lottery-winnings/#b
How in the name of sane pancakes are you supposed to remember every little free thing you’ve received over the past year? Are you expected to keep a log of everything? Does that include freebies from loyalty cards? That’s seems a bit excessive. Makes me feel a bit less burdened by the UK self assessment form, though…
Does this include people that are only employed? (In the UK, self-assessment forms only have to be completed by those that have done some sort of self-employed work… does the US have a version of PAYE?).
And the fact that the USA taxes based on citizenship has always struck me as crazy. It’s one of very, very, very few countries that do. And it seems exceptionally unfair. If you’re not using the public services (for want of being in a completely different country), why are you paying taxes toward them? At least treaties exist to eliminate (or at least reduce) double taxation… with a few countries.
Personal responsibility. If you buy anything online from out of state, sales taxes are not charged. You need to pay these along with your state taxes in April, if your state has these.
Nope, everyone needs to file taxes. There are some circumstances to get out of this, but they are small.
Thats just personal responsibility for the sake of it, nothing more than needless bureaucracy. We had that system here in Portugal and moved on from it two decades ago. Nowadays taxes are done automatically and one just has to check that everything seems ok every April/May. You don’t even need to check it, if you don’t do anything you’re implicitly agreeing with what’s there
The accountants and tax prep software companies heavily lobby the government to keep the current system as they would loose money.
1 Like
There’s a really good Reply All episode about TurboTax and how insanely complicated the US tax system is, and how those making money from it seem to be able to call the shots in terms of reform: https://open.spotify.com/episode/2ATUlZsZ7vRX8xiCVWhnLr?si=Fb-oUIZATi-OLyyB87vJmg
This is changing, however. Amazon, eBay, big online retailers were forced to start collecting sales tax after a fairly recent court ruling on the matter.
Also, the second part is true, but I’ve always found it a bit unfair how it doesn’t work the other way around- if you live in a state with sales tax you’re supposed to keep track and report it yourself, sure, but if you live in a state with no sales tax and shop somewhere with a sales tax, with the exception of Washington state there’s no way to claim it back.
I think the best way to handle that sort of thing is how it’s done in most (if not all) EU countries, where you just have to pay the VAT you’re charged when buying something. If you’re buying something online, as an example, and are charged higher VAT from another country, you can’t claim it back but if the opposite happens and you’re paying less or even nothing at all you don’t owe anything either
Haven’t you learned Americans hate taxes?
I doubt anyone hates consumption taxes more than me 
. I’m just not convinced that sales tax or VAT will go anywhere anytime soon, so maybe they should at least be handled with as little hassle as possible for everyone involved
On a side note, funnily enough, I know of Americans that actually defend sales taxes. I’ve never heard anyone defend VAT in Europe except politicians and economists
I would hazard a guess that that’s because individual municipalities in the US can levy a sales tax, so it serves as a revenue stream for small towns/counties. In Europe, VAT goes straight to the central government.
There’s also the fact that sales taxes in the USA are generally much lower than VAT rates in Europe.
Often the tax is for something very specific, such as 1% for homeless housing, or to build a new Subway system.
Not wholly true, there are other criteria that drop you into that bracket too. They generally only apply to higher tax bracket earners though.
1 Like