Thomas Oliver: Tax season rubs it in

By Thomas Oliver

The Atlanta Journal-Constitution

That most dreaded of dates, April 15, has come and gone.

It followed by one week another date that isn't as well known, or even real for that matter -- Tax Freedom Day.

The folks at the conservative leaning Tax Foundation calculate that April 8 was the date Georgians finished working for the taxmen and women in Washington, Atlanta and the 159 county seats scattered across our expansive state.

Ten years ago, Tax Freedom Day was May 1. But after those much maligned Bush tax cuts, the date eased back to April 14.

Thanks to the stimulus tax cuts prompted by a bad economy, the date is a tad earlier this year.

But both the Bush and stimulus tax cuts are set to expire next year, which is an Orwellian way of saying: Your taxes are going up.

The April 8 date was based on working 98 days. Since April 8 is the 98th day of the year, the Tax Foundation must assume we all worked 98 days straight through.

Which is about right for our small business owners. And why small businesses remain the most pessimistic about this so-called recovery.

For them, long hours and hard work equal more taxes. (If you know of anything that doesn’t have a new tax associated with it, best keep quiet, or else…) Around this time of year, talking heads wag over who pays incomes taxes and who doesn’t. Most agree that nearly half of us don’t pay any federal income taxes. Emphasis on the word, “income.”

Hardly anyone avoids paying some tax. Primarily payroll taxes that take 15.3 percent of everyone’s earnings up to $106,800.

For ages, economists have tried to explain to a seemingly compliant population of employees that they were in fact paying both the employer’s and their own portion of Social Security and Medicare, though only their portion is shown being taken from their paycheck.

Employers factor the costs of employing someone, including “the employer’s” portion of payroll taxes as well as insurance benefits.

That’s why it’s said -- and true -- that an employee’s compensation is much larger than his or her paycheck.

Our newly self-employed -- a nice phrase for those forced-marched or teased out of employee status -- are discovering the truth of who pays the payroll tax.

The 15.3 percent self-employed tax is the same as the Social Security and Medicare taxes, except the self employed get to pay both the employee's and the employer's halves.

And just when the fun appears to be ending, our new freelance consultants, writers, handymen and maids discover the IRS gets what it wants when it wants it. And it wants your money. And it doesn’t entirely trust you.

Hence: citizens of the fast-growing freelance nation pay an estimated income tax each quarter.

For those newly minted “1099” contract workers, estimated taxes extend the dread associated with April 15 to three additional dates – June 15, Sept. 15 and Jan. 15.

The debate about whether we pay too much in taxes is usually between those who think our government has grown too big and those who lived for any length of time in Europe – or would like to.

That was a joke.

This isn’t: This year, we’ve added $1.4 trillion to our national debt, which now equates to $116,673 per taxpayer.

The only real question is when that bill will come due.

Thomas Oliver writes the Sunday business column. He can be reached at toliver.writeright@gmail.com