Somebody Should’t File His Own 1040
Ol’ Dirty News Reporter Calvin Hall certainly won’t be earning his CPA any time soon. Nor would his work earn a passing grade in WR121. He writes:
Measure 41 would allow taxpayers to take either a tax deduction on their state returns in the amount deducted from federal taxes, which is about $3,200, or to claim the existing Oregon personal exemption credit, which was about $154 in 2005, according to documents on the secretary of state’s Web site.
If one takes a minute to read either the ballot summary [PDF] or the full text [PDF] of Measure 41, one can clearly see that Mr. Hall hasn’t a clue. The measure allows tax payers to claim the same deductions they do federally for themselves and all dependents. Mr. Hall neglects to mention that last little tid-bit, implying that the personal exemption is the only one counted. Simply adding “per claimed dependent” to the end of his first appositive in the above passage would to wonders to clarify. Furthermore, the current Oregon personal exemptiondependent tax credit (see update) is not $154, but $154 multiplied by the number of lawfully allowed Federal exemptions. Mr. Hall could have made this clear with a simple explanatory statement, but that would’ve required him to, I don’t know, learn to read.
For example, let’s take the usual example of the “typical American tax-payer”: A single-earner family of four with income less than $250,000 a year. Under the old system the earner in the household would be able to claim a $616 deduction from his or her income taxable by the state of Oregon and a $12,800 deduction from his or her income taxable by the Federal government. Under the new system the deduction would be $12,800 from both state and Federal taxes. Lowering one’s taxable income by $12,800 is obviously a whole heck of a lot better than lowering it by $616. Assuming that this hypothetical family of four is making 2006 fiscal year’s median income of $61,570, the tax savings of the new plan over the old plan at Oregon’s 9% tax rate are $1,097 (ceteris paribus).
Now, $91 and change a month isn’t exacly a whole ton of cash, but it’ll pay the cable bill.
UPDATE: Commenter Randy makes obvious exactly why I didn’t major in accounting. Thanks Randy:
I would suggest to read the measure again or read a tax book. Currently, Oregon allows a $154 per person TAX CREDIT and the measure would allow a $3200 per person exemption from TAXABLE INCOME. Meaning the the family of four in your example, the after tax effect would be $1152 ($3200 x 4 x 9%) compared to $616 for a difference of $536. So go back to school or something.
Which makes the score something like:
Mr Hall: Illiterate
Timothy: Innumerate
Randy: My stern but groovy master.
Added as an update, thanks Randy. One day I, too, will learn to read.
I would suggest to read the measure again or read a tax book. Currently, Oregon allows a $154 per person TAX CREDIT and the measure would allow a $3200 per person exemption from TAXABLE INCOME. Meaning the the family of four in your example, the after tax effect would be $1152 ($3200 x 4 x 9%) compared to $616 for a difference of $536. So go back to school or something.
Nice catch. Managing to make sense of all those big numbers and all… my hat’s off. My favorite ODE “moment” today was the Fourplay (I hate myself everytime I write that word) piece entitled “Taking more than shots” about a trip to the vineyard. Photo Editor Zane Ritt launches right in with “This shoot was especially trying for me because of Ed, my reporter’s’ (sic), and his rancid beer farts during the car ride to the vineyard.” It’s like they’re trying to put us out of business or something… the typos, the alcohol-specific fart joke, and all in the first paragraph. Of course the rest of the piece reads like a national geographic mission to photograph the rare and wonderous grape harvester, complete with a cheezy “lesson learned” at the bottom. Y’know, exactly the way we’d do it… made me a little less sorry that our photo department is a web browser.