Many of us celebrated tax day last week by reconciling our contributions from the past year to federal, state and local governments. I’m always hopeful that I paid my fair share, but if not, I’m willing to get some more money out to the various government entities right away. After all, I know they are short of money because it’s what I hear about in the news every day.
The important thing is, I always want to make sure I paid my fair share. I can’t stress this point enough. I don’t want to be a slacker. My parents taught me about fairness. How can you argue that fairness is not a good thing?
So, I went through my tax returns line by line. I wanted to make sure I hadn’t cheated anybody by underreporting income, yet I also wanted to ensure I took all my allowed deductions. That’s only fair. Right?
On the deduction side, there weren’t many, but that must be fair, so I’m good with that. On the tax side, wait a minute, there’s that pesky alternative minimum tax again. You know the one. It simply points out that you made too much money and the government is going to take more money from you (because that’s only fair). OK, I guess I can’t complain if it’s fair.
As it turned out, I planned pretty well with monies taken out of payroll each week. I instructed my employer to take out a lot, double it, then take out some more. The result was that I had a small refund coming back from the federal government and I owed the state a small amount. It’s always a relief to know you don’t have to pay a lot more in April and to know that obligation is fulfilled.
Just for fun, I always review how much tax was paid. When I look at the total tax due lines for federal and state returns, it can be sobering. That’s a lot of money! But I want to be fair. That’s what is most important. Then I start wondering if there were any other taxes I paid over the course of the year.
Well, yes, right there on my pay stub, it shows how much Social Security tax was taken out. There’s also Medicare tax withheld out of my paycheck. Wow, just those two items add up to a significant amount. And that doesn’t take into account that I’m paying only half of these taxes. My employer is paying the other half, along with all the other taxes a business must pay.
In addition to federal, state and local income taxes, Social Security and Medicare taxes, property taxes and state sales taxes, I remember paying federal and/or state taxes on my cable, telephone, gas, electric, and water and sewer utility bills, federal and state gasoline taxes, alcohol taxes, hotel taxes, airline taxes, taxes on license plates, toll road charges, waste management taxes, sports stadium taxes, and … I need to stop. I’m getting a migraine headache.
And since we love our taxes, my understanding is that, when the tax for health care reform is added to the expiration of the Bush tax cuts in 2013, top tax rates on ordinary income will increase almost 25 percent, capital gains top rates will increase almost 60 percent, and top rates on dividends will rise almost 300 percent. Congress doesn’t need to do anything for these tax rates to take effect in 2013. They will happen by default.
I want to be fair, but as John Stossel says, “Give me a break!” Stop the madness. We need to quit spending money like we don’t have a brain. Right now, with all the individual and corporate taxes paid, we should have more than enough revenue to cover the legitimate functions of government and to make sure basic human needs are met for everyone in this country who genuinely can't fend for themselves. Nobody has to be hungry or homeless.
Don’t mistake my earlier sarcastic tone for lack of compassion. I have plenty of compassion for folks who need help. I have no compassion for people who stay on the dole for years and work the system. And I’ve stated before that I’ll willingly give more money to help the government pull out of the current tailspin, if I trusted anyone in power to use it wisely. I have no such trust for Republicans or Democrats. This is not a partisan topic.
I do want to be fair. I do want to contribute my fair share. When will I see some fairness from our government leaders?•
Morris is publisher of IBJ. His column appears every other week. To comment on this column, send e-mail to email@example.com.