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European-American Topics - Editorial - Taxes: The American Perspective

Not so crazy about tax time

By DW Hamilton

Straight up, I hate taxes. Sure, I appreciate all the good things government can provide while spending our hard earned tax revenue, when they provide an infrastructure, social safety net, schools and fire-trucks, for instance. And I think everybody should pay their fair share, but… I still hate paying taxes. Ask a typical worker about tax time, and may run into somebody who has been withholding a certain percentage of her or his paycheck all year, and who expects a refund. This is good psychology, making the act of paying money into sort of a treat when you get some back. Ask somebody who runs their own business, and you’ll hear an entirely different story about writing out huge checks quarterly, and how it is eating up a huge chunk of profits, if there are any.

            For businesses, of course, all the expenses are deductible. People hear about enormously successful businesses people who can deduct everything they can conceivably write off, down to the monogram on their shorts. It does seem unfair when laws are written which obviously favor people with extreme wealth. But of course, the wealthy resent taxes even more than poor people, so they hire lobbyists to come up with ways to help them get out of them.

            Small businesses owners aren’t that lucky all of the time, when for instance, the profit they owe taxes on isn’t actually enough to live on. People who remained unemployed long after they dropped off the dole, and started some little at-home business walking dogs or manicuring lawns could fall into this category. This is where pockets of both opportunity and poverty are forming, because shockingly, a person making $400 per year as self-employed, owes a self-employed tax in the US of 15.3 percent. The cost of living does not figure into the calculation anywhere. Ironically, this money is Social Security, money supposedly set aside to keep these same people from being indigent in their old age. The net effect can be for the poorest ist to make them even more indegent in at working age. Complain to the IRS about this, and they will suggest getting a higher paying job. Which would be a good idea if you could only manage to get one.

            Another form of tax is the sales tax. This one is relatively painless because you only pay it in little driblets daily, when you buy gum for instance. Personally, I would be in favor of scrapping Income, Social Security, and Medicare taxes and going only with a Value Added Tax.. This tax does hit the poor also, but at least it is in a relative ratio to the cost of living. People can always economize on the spot with their purchases, and a value added tax can not allow people to go into hole, owing their government.

            Europe is known for its notoriously high taxes, but also for a sort of cradle-to-grave social welfare state. Now, Europeans too, are starting to balk at the highest cost of government. Most likely, they will continue to scale back benefits available to Western Europeans, and their tax rate will stay about the same.

            All told the average working American pays 25 percent to 33 percent of their annual income in State, Federal and local taxes. Given that we have such huge efficiencies in the modern workplace now due to computer innovations such as the internet, one wonders how long it will take for government to apply them effectively and pass the savings on the taxpayer. That will not likely ever happen soon, yet another reason I hate paying taxes.


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