Dear Editor:

Last week I submitted a letter to the editor that contained some errors and omissions that I wish to correct. Posing a potentially complex tax situation in a word-constrained letter I left out certain facts about the tax calculations.

Some of my neighbors, who either enjoy paying higher taxes than the rich, or are rich themselves, jumped all over my calculations. This may be a little boring, but for those who truly wish to understand how the average wage earner is being ripped off, please stay with me.

What was omitted is that the tax calculation I used included “qualified” dividends. Generally speaking, qualified dividends are any dividend issued by a US based corporation or foreign corporation covered under a tax treaty of which there are many.

Qualified dividends are not taxed as ordinary income. In the old days, all income of every type was lumped into one sum and the tax was calculated on that. Today the tax calculation for dividends and capital gains is done on the “Qualified Dividends and Capital Gain Tax Worksheet” on page 38 of the IRS 2025 1040 instruction booklet.

If you plug in the amount of the qualified dividends you will find that the tax threshold for a married filing jointly is $96,700. Add to this amount the standard deduction of $31,500 and you will see that the first $128,200 is totally tax free.

Adding insult to injury to the unfairness in our tax code, the top tax bracket for qualified dividends and capital gains is 20%. For wage earners it tops out at 37%.

Where I erred was in calculating the tax for the average wage earner. I used an example of $120K income paying $11K income tax. This tax would have been correct if the example was for $128K. This was a typo on my part.

I would be happy to meet with anyone, over coffee, who thinks that I am wrong, and will explain how the tax code works. If I am proven wrong, I will be happy to pay for the coffee.

Fred W. Nehring

Boothbay