06 July 2010
God Save the Queen
(Crochet bikini, sans wearer)
I managed to review a few dozen resumes at poolside yesterday, already feeling the remorse of the end of the holiday. As the afternoon deepened and the temperature continued to soar toward triple digits, the words on the paper began to dissolve with the perspiration that trickled down my torso.
I was in the pool four times; once for exercise, and three times to relieve the oppressive heat.
It was like a double Sunday, and that is a problem day as it is, since the idea of putting on the Socotra suit and going out to do, in Garrison Keeler’s words, What Needs to be Done on Monday is always a little depressing.
Probably about the way the Queen of England is feeling today. She is going to pop up in Manhattan today, to address the United Nations. She was last here in town to honor Lord Fairfax or someone. I remember waving to her limo when it emerged from Arlington Cemetery. I was still able to jog back then, and had just come up the ramp from Route 110 to collide with security. Her hat, at least from the brief glimpse I had, was astonishing in its complexity.
Prince Philip looked bored.
Seeing the monarch of most of the Britons back in the states so close to the 4th drew me to contemplate how we came apart as part of the Empire, and the road we have come down. While contemplating the amazing crochet bikini on the young woman from the seventh floor and whether Candidate 3 was really qualified as an All-Source Analyst, I doodled some figures.
No one can accuse me of not being able to multi-task, not on the pool deck, anyway.
The Company fiscal year closes out at the end of June for some reason probably associated with the original founding of the institution, just like it did for the young United States. Accordingly, we have to do close-out numbers and forecasts for the new year in the middle of the one we live in, and it made me think about my own little situation.
It is not anything I used to worry about, the cap on social security taxes. It is $106,800 this year, and about what I used to make on active duty. There was a sort of bonus in December, right at the end of the year, when I exceeded that amount and got to keep what I had earned instead of transferring it to the Social Security Administration.
I blush to say it, but that has moved up by a couple months, and I am grateful that it has. It amounts to nearly a thousand bucks a month, something we don’t think about, since it is gone before it gets to us most of the time.
The benefit in our retirement years actually is not much different from what the Federal Government takes from us all our working lives. They have been taking it from me now since 1966, and it strikes me that maybe I could have done something better with it in all those years.
But never mind. I am just excited that I will get a little pile of money toward the end of the year. That makes January and the resumption of payments that much more painful. I doodled on, since there was something that I didn’t understand what a hit was coming. There has not been an increase in the cost-of-living for the pension or the VA benefits, or the check from the office for that matter. So what is going to happen is going to have a real cost.
It will make January cold indeed, and quite a contrast to the sweltering heat on the pool deck.
I got one of those hysterical e-mails that fill up the inbasket with depressing regularity. It was depressing news, and I had to parse it for what is true and what is not.
For sure the Bush tax cuts will expire, and my personal tax rate will go up from 35% to 39.5%. That is 4.5%, but the heat made my brain slip a cog or two. That is not a direct five percent cut to my wages, of course, but it certainly means I will take home a few hundred dollars less per check.
With the annual re-commencement of the Social Security confiscation, that will make the difference between December and January pretty stark- like more than a thousand dollars a month.
I think there is probably a decent argument that Social Security could be means-tested, based on whether you actually need it, but I would suggest that when you are on the brink of needing it, and you actually have to pay the additional taxes, this gets kind of personal.
That isn’t all. Itemized deductions and personal exemptions will phase out, which has the same mathematical effect as higher marginal tax rates. The bracket rate hikes go like this, since the half of us that actually pay taxes will all contribute more like this:
- The 10% bracket rises to an expanded 15%
- The 25% bracket rises to 28%
- The 28% bracket rises to 31%
- The 33% bracket rises to 36%
- The 35% bracket rises to 39.6%
I cannot even being to fathom the effect of the other litany of marginal taxes and health-care related tax issues that will come due in January, but they will be pervasive and real.
This year, there is no death tax. For those dying on or after January, there is a 55 percent top death tax rate on estates over $1 million. That probably seems like a lot, but a million bucks isn’t what it used to be, as I am uncomfortably aware as executor for my folks.
The capital gains tax will rise from 15 percent this year to 20% in 2011, not that I have any investments. The dividends tax will rise from 15 percent this year to 39.6% after January, and go up another 3.8 percent in 2013.
There are several taxes contained in the health care bill, though I defy anyone to explain what they actually are, or how much they will cost.
If you had not thought about it, along with the Christmas bills that we will run up in Fat December of 2010, you might want to take the whole mess of the January train-wreck into account as we go into the holidays.
I am not averse to paying a fair share of taxes, but obviously what constitutes fairness is entirely subjective. Since I make my living off the institutions that are supported by Federal money, it is a little hypocritical to bitch about funding my own business. But where you stand is where you sit, and like I said, this is getting personal.
I have to manage my own checkbook and it is irritating that the Feds don’t have to do the same thing. The incompetence and corruption of the Congress and the Executive Branch- by both parties- is infuriating.
Consequently, when I got done evaluating candidates to fill the requirements that the Government cannot meet, and plunged into the blissfully chilly waters of the pool, I went back upstairs to log back on the computer and enter the data I had compiled down by the pool.
I checked the thirty-eight messages that had come in since I started basting under the unrelenting sun, and was irritated to find a homework assignment from a pal who retired a couple years after I did.
Pete runs his own consulting business from a nice house in Suffolk, in the tidewater region of Virginia. He had the good sense to find the woman of his dreams and stay married to her, so he has a little more flexibility than I do.
I don’t need any more homework than you do, and it is already late on the Double Monday that always follows a Double Sunday. But I had to stop work on the excel spreadsheet and marvel at the thought that went into what Pete did.
I will have to tell you about that tomorrow, since I have to trudge off to work to pay the current tax burden.
I think you will be intrigued by what Pete is up to. It was the only thing that really got the wearer of that crochet bikini off my mind.
God Save the Queen.
Copyright 2010 Vic Socotra
www.vicsocotra.com
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