Posted: Apr 25, 2005 By: Vince DeVita

Comment: What I wanted to point out to, today, is the built-in tax inequity levied on
seniors collecting

Social Security. Briefly it's this. Seniors, like myself, are taxed at a
27.8% marginal rate, not 15% as one might think. Each additional dollar of
IRA withdrawal

income triggers an additional 85 cents increase in reportable Social
Security income. Even though $1 is earned, the taxable income automatically
inflates to

$1.85. 15% of $1.85 equates to $0.278. Ironically, we were under the
impression that deferred income during our working days would be taxed at a
lower rate. I

have never been in a 28% marginal tax bracket! In fact those in the $100,000
income bracket are currently in a lower marginal rate of 25%!!! Appreciate

comments you might have on this and how I might bring it to the attention of
anyone who can correct this inequity. Incidently, my suggestion would be to
forgive the

first $10,000 of IRA withdrawal and not count it as additional reportable
Social Security income.

Within an AGI bracket of $32,000-$42,000........marginal rate is 15 %

Within an AGI bracket of $42,000-$67,000........marginal rate is 27.8 %

Within an AGI bracket of $67,000-$75,000........marginal rate is 15 %

Within an AGI bracket of $75,000-$135,000......marginal rate is 25 %

Within an AGI bracket of $135,000-$196,000....marginal rate is 28 %

So seniors in the $42,000-$67,000 AGI bracket pay the same marginal
rate as those in the $135,000-$196,000 AGI bracket. ...This is outrageously

( All of the above assumes a standard deduction for 2 seniors ((receiving
Soc. Sec.)) of $11,600 and a personal exemption of $6,200.)

Thank you for your time.

Vincent DeVita
(818) 360-5868