I just got back from my Post Office. I had a letter in the box from DAFS. My FITW is going from $69.67 to $118.06 a month on my retired pay. The effective date is Jan 29, 2011. That's just about a 70 PERCENT TAX INCREASE>>.. On the back in all caps: "recent changes to the tax law, tax tables and other legislation changed the amount of federal income tax withheld. these changes will be reflected in your retired payment dates march 1, 2011."

Anyone on active duty see any changes for this pay period? on your deposit slip or forecast on this month's LES??

Wasn't there a big fight to get all of the Bush era tax cuts extended including for those making more than a quarter MIL?? I'm guessing this was the expiration of either the bank/wallstreet baleouts or the stimulus tax cuts we got back on - when was it - 2008? Remember around the time of the $600.00 check?

Russ Burkhard

Well, maybe I found something related to the increase in witholding. Went to DFAS to find out what the deal was, then to IRS. Nice little article that says the Making Work Pay withholding reduction (which DFAS used, even though it did not apply to annuties or retirement pay) was not carried over when the other tax cuts were. The amounts quoted were $7 to $50 dollar increases dependent upon how often and how much you get in your retirement pay. Link is attached for those who want to read it.

Jerry

Making Work Pay - That's what it was..Thanks

Russ

This is what I warned everyone about last year. However, even though I increased my witholding by the amount recommended by the IRS calendar, I still ended up paying almost $300 in taxes to the IRS.

"People making less than $250,000 will not pay one cent more in new taxes"

Yeah...right!

I don't think the change in Fed Tax was Bush's thing. I remember the change in my Fed with holding happened in the early part of '09. Same with the $600.00 give back. (Just after I returned to work from Disability). That would make it the present administration. This is not an increase in taxes...it's just not letting us keep it through the year.

I did not adjust my withholdings when that happened, and this year I found that the Navy did not hold out very much on my retirement pay. Of course I do have to pay this year, but I have had use of that money, and invested it....I still have it to give them now. Best part is, I made a good return on it and not them.

Of course this year, my finances have changed conciderably by doing another final retirement in Oct. By my calculations, I can lower or eliminate all together, any withholdings. I should not have to pay any taxes for 2011, and on going. Good planning the past 20 years has allowed this to happen.

The Fair Tax is an idea whose time has come. A consumption tax instead of an income tax, capital gains tax, and various other taxes on business. Check it out at fairtax.org and read the below link of the congressional testimony given under oath to congress.

R

Let me tell you how it will be,
There’s one for you, nineteen for me,
‘Cause I’m the Taxman,
Yeah, I’m the Taxman.

Should five per cent appear too small,
Be thankful I don’t take it all.
‘Cos I’m the Taxman,
Yeah, I’m the Taxman.

(If you drive a car ), I’ll tax the street,
(If you try to sit ), I’ll tax your seat,
(If you get too cold ), I’ll tax the heat,
(If you take a walk ), I’ll tax your feet.
Taxman.

‘Cause I’m the Taxman,
Yeah, I’m the Taxman.
Don’t ask me what I want it for
If you don’t want to pay some more
‘Cause I’m the Taxman,
Yeah, I’m the Taxman.

Now my advice for those who die,
Declare the pennies on your eyes,
‘Cause I’m the Taxman,
Yeah, I’m the Taxman.
And you’re working for no-one but me


Whatever happened to the casinos picking up the tab?

Thanks for The Taxman, Tim.
Seems I've heard it before, but still enjoyed it.
Do you know the original author?

Thanks either way.

I think I heard of them.

The time has come for major reforms and the consumption tax is a great idea. I too have looked into that idea and other than EVERY STATE jumping on raising every tax that could be remotely connected such as Telecommunications of ALL sources, Utilities of ALL types, Transportation vehicles and Fuel of ALL kinds in the spirit of consumption!!!!
CEC

Not only will we deal with an increase in Fed tax, here in Illinois our legislators recently voted in a 66 % increase in State Tax. I predict there's gonna be a multitude of Illinois Democrats looking for new jobs next election.