<HTML><BODY style="word-wrap: break-word; -khtml-nbsp-mode: space; -khtml-line-break: after-white-space; "><BR><DIV><DIV>On Oct 12, 2007, at 10:34 AM, Michael Magness wrote:</DIV><BR class="Apple-interchange-newline"><BLOCKQUOTE type="cite"><SPAN class="Apple-style-span" style="border-collapse: separate; border-spacing: 0px 0px; color: rgb(0, 0, 0); font-family: Helvetica; font-size: 12px; font-style: normal; font-variant: normal; font-weight: normal; letter-spacing: normal; line-height: normal; text-align: auto; -khtml-text-decorations-in-effect: none; text-indent: 0px; -apple-text-size-adjust: auto; text-transform: none; orphans: 2; white-space: normal; widows: 2; word-spacing: 0px; "> Being in the private sector isn't all it's cracked up to be, I pay my own social security, self employment tax, retirement, insurance, then there's the overhead. My phone bill is almost $100 a month, just the one on my desk, then there's the cell phone, vehicle cost, advertising, parts inventory, tools all of the things the University provides for you. I have the feeling you have never been in the private sector or if you were it was quite brief.</SPAN></BLOCKQUOTE></DIV><BR><DIV><BR class="khtml-block-placeholder"></DIV><DIV>Hi Mike,</DIV><DIV>I do need to also address this misconception.</DIV><DIV><BR class="khtml-block-placeholder"></DIV><DIV>You have obviously been misled about what an employee is responsible for and what is provided. I get the feeling you've never been an employee.</DIV><DIV><BR class="khtml-block-placeholder"></DIV><DIV>The university provides me with very little. I think we'd all like to believe that ideally the university provides technicians tools. I've gradually begun accumulating "some" tools for the university shop by sneaking them into parts orders, but the vast majority of them are provided by me as required by my job description. I have often bought items such as glue out of my own pocket because the purchase requisition process and cash reimbursement process is too aggravating to deal with. And I sometimes take grand action work home because there isn't a work bench here deep enough to do grand action work.</DIV><DIV><BR class="khtml-block-placeholder"></DIV><DIV>Yes, my employer subsidizes a part of the social security and FICA (or self-employment tax), retirement and insurance, but a sizable portion of my income is subtracted from my pay to pay the remainder. Some states pay the entire amount for the employee, but the salary will be adjusted so that the take home pay winds up about the same. You don't want to get into a comparison on taxes. Truth is, you pay those taxes on your net income. I pay it on the gross amount. The tax system is set up to benefit the business owner, not the employee.</DIV><DIV><BR class="khtml-block-placeholder"></DIV><DIV>And let's talk about overhead. Phone bill, cell phone, vehicle cost, advertising, parts inventory, tools are all paid for on your schedule C. (I don't consider parts inventory at issue here -- that is something you should be earning a profit on when you sell them). You get to deduct every mile you drive, which should pay your car payment and more. Every tool is covered before you are taxed. Your phone bills are paid for before you are taxed. Your home computer and internet service are all pre-tax expenditures. From what I understand, there is a world of items the self-employed business person deduct that an employee can't. Imagine now having all those items still to pay for, but instead having to do that with the money you normally have left over for food, clothing and other items in your home. </DIV><DIV><BR class="khtml-block-placeholder"></DIV><DIV>An employed tech pays for every one of those items that for you are pretax business expenses with after-tax dollars. As an employee, my car, my cell phone, my home computer and my tools, etc., in effect, all pay taxes. Retirement contributions and health insurance premiums don't even reduce FICA (self-employment) and Social Security taxes like they do for you. Only income tax is affected. And as an employee, I cannot deduct the value of tools purchased during a year unless it exceeds something like $1800 or more, whatever the amount is now.</DIV><DIV><BR class="khtml-block-placeholder"></DIV><DIV>I have no choice about how much money I want to put into a retirement account or what kind of account I want it to go into. 6.5% of my gross pay is deducted from my check to go into a pension fund. Yes, there is an employer "match", but only to the extent that when I get to retirement age, the income I would receive is supplemented at that time. I cannot borrow against the value of what I have contributed and if I leave employment and want to roll the accumulated value into a different investment vehicle, the employer match doesn't go with it. All I get are the value of my contributions plus interest. Some of the other schools (states) offer defined contribution plans rather than the defined benefit plans, but either way, once you are enrolled in either, you don't get to choose to not participate unless you resign. You can't just say, I need to repair the roof, so we need to take care of that this month instead of putting money in our retirement plan.</DIV><DIV><BR class="khtml-block-placeholder"></DIV><DIV>The only way I get to use the same deductions you get is to leave this place every day and go into the private sector when I leave. Yes, I've been in the private sector for about 23 years now. I've only been a full time CAUT for the past 9, almost 10 years, though I have done CAUT work almost my entire career. I do get these deductions, but since I can only spend a fraction of the day doing self-employed work, obviously my deductions will be smaller. Still, the amount of taxes withheld from my university paycheck is substantial. According to my accountant, I can earn somewhere between $25K and $30K above my university salary before I will start to owe more in taxes that what is withheld.</DIV><DIV><BR class="khtml-block-placeholder"></DIV><DIV>Yes, that's including self-employment tax. </DIV><DIV><BR class="khtml-block-placeholder"></DIV><DIV>Jeff</DIV><BR><BR><DIV> <SPAN class="Apple-style-span" style="border-collapse: separate; border-spacing: 0px 0px; color: rgb(0, 0, 0); font-family: Helvetica; font-size: 12px; font-style: normal; font-variant: normal; font-weight: normal; letter-spacing: normal; line-height: normal; text-align: auto; -khtml-text-decorations-in-effect: none; text-indent: 0px; -apple-text-size-adjust: auto; text-transform: none; orphans: 2; white-space: normal; widows: 2; word-spacing: 0px; "><DIV>Jeff Tanner, RPT</DIV><DIV>University of South Carolina</DIV><DIV><BR class="khtml-block-placeholder"></DIV><BR class="Apple-interchange-newline"></SPAN> </DIV><BR></BODY></HTML>