Business

The tax man cometh but never giveth

The Atlanta Journal-Constitution

Wednesday, April 15, 2009

If this doesn’t give you pause, have someone check your pulse:

We will pay more in taxes in this second year of the Great Recession than we’ll spend on food, clothing and housing combined.

That’s according to the folks at the Tax Foundation, which also calculates Tax Freedom Day, the day you finish working for the government.

Thanks to the Great Recession, our freedom from taxes came eight days early this year. In Georgia, we’ve had to work 102 days, through this past Sunday, to pay our federal, state, payroll and sales taxes, corporate income taxes, property taxes and a range of miscellaneous taxes.

Not to mention those annoying nickel-and-dime taxes on your telephone and cable bills that aren’t really nickels and dimes but real dollars and cents.

Another interesting factoid from the foundation: That ever-present federal phone tax was first instituted to pay for the Spanish American War. In 1898. Which proves we are a nation of natural born suckers for temporary, sun-setting taxes.

There’s a bill pending in this Congress to repeal the phone tax.

One-hundred-and-eleven years later.

Don’t bet your refund on that tax disappearing from your phone bill.

My initiation into the mysterious world of taxes came in 1986 when Congress passed a historic tax simplification reform that the New York Times called “the most sweeping overhaul of the tax code since World War II.”

Only it wasn’t.

I remember interviewing an accountant, whom I naively assumed was going to be hurting, if, as our leaders were claiming, they were closing down the loopholes, simplifying the tax rates, etc.

Everyone would be able to file his or her own taxes. What was a poor accountant to do?

Mine laughed.

He told me the secret to understanding tax laws: The simpler they make them, the harder they will be to figure out.

In other words, as long as there are taxes, accounting is as near a recession-proof career as there is outside of the funeral business. (Hence, the death and taxes cliche.)

Around this time of year, it’s natural to complain about taxes. Only a guilt-ridden Warren Buffett or Bill Gates can say they are under taxed.

For the rest of us peasants, the load seems heavy.

Sixty-five percent of us think our combined taxes should be no higher than 19 percent of income. In fact, according to the Tax Foundation, our tax rate is 28 percent. That’s a whopping, 47 percent difference.

Unfortunately, the chances of us ever having a tax system that is as understandable as it is fair have all but disappeared with the $9.27 trillion deficit projected over the next 10 years.

Another secret to the shrouded world for taxes: Deficits are just another word for them.

toliver@ajc.com


Kudzu Services » Find the right people for the job