Sunday, April 10, 2011

The Tax Man Cometh!

Income tax season, the yearly game of write-offs and deductions, is once again here.  Unfortunately, like many others, I typically pay very little attention to how much money I actually pay in taxes.  The government takes their share and I use what is left.  I very rarely consider how much money I make, instead I just concentrate on how much money I bring home. In many ways, I’m the perfect pig for the government’s taxation slaughter!   
If you make any money, the government shoves you in the creek once a year with it in your pockets, and all that don't get wet you can keep.  ~Will Rogers 
As I prepared my tax return this year, I realized that I pay a hefty chunk to Uncle Sam.  In the US we currently pay between 10-35% of our salaries, as an income tax, to support the government.  The tax rate varies depending on the individual’s particular income level.  The more money a person makes, the higher percentage they have to pay.    
I'm proud to pay taxes in the United States; the only thing is, I could be just as proud for half the money.  ~Arthur Godfrey
(I strongly feel that progressive tax rates are unfair and that the nation should adopt a flat tax, but that topic can be saved for a later post.)
The taxpayer - that's someone who works for the federal government but doesn't have to take the civil service examination.  ~Ronald Reagan
The current budget battles occurring in Washington have opened many eyes, mine included, to how our tax dollars are being spent.  I’m comfortable with my tax dollars supporting our nation’s defense and promoting the general welfare of our citizens, as it's stated in the Constitution.  However, the “general welfare” portion is where the slope gets slippery... real slippery!  Should our tax dollars be going to Planned Parenthood (a leading provider of abortions), National Public Radio (a media outlet that tends to favor one political view over others), foreign governments, etc, etc, etc?  Regardless of what causes you consider worthy of our tax dollars, everyone should want and expect the tax dollars to be spent efficiently.  
 
So how exactly are our tax dollars being spent?
Wondering where was my money really going, I visited the What We Pay For website to find out.  The amount that goes towards debt repayment is shocking.  In 2010, we spent $187.8 billion in interest alone!  I find it mind boggling that the most advanced nation in the history of the world could owe so much money.  Why don’t we have trillions in surplus?  I really hope the government gets their act together and reduces the federal deficit.  If they don’t, we are all in BIG TROUBLE!
Taxes, after all, are dues that we pay for the privileges of membership in an organized society.  ~Franklin D. Roosevelt
The average American home makes $46,326 and pays $9679 in income tax.  Here’s a breakdown of where that money actually goes:
  • Social Security: $1944.91
  • National Defense: $1941.24
  • Income Security: $1786.45
  • Medicare: $1242.17
  • Health: $1038.81
  • Net Interest: $504.77
  • Veterans Benefits and Services: $336.03
  • Transportation: $251.80
  • Education, Training, Employment, and Social Services: $247.10
  • International Affairs: $181.15
  • Allowances: $162.63
  • Administration of Justice: $143.72
  • Natural Resources and Environment: $106.24
  • General Science, Space, and Technology: $83.40
  • General Government: $77.98
  • Agriculture: $68.33
  • Community and Regional Development: $53.45
  • Energy: $23.68
  • Undistributed Offsetting Receipts: -$214.33
  • Commerce and Housing Credit: -$300.54
(For a more detailed look at these costs please visit the What We Pay For website.  The site allows you to enter in your actual annual salary to receive a custom report.)
The United States has a system of taxation by confession.  ~Hugo Black
Knowledge is power!  Every penny that the government collects from taxes is OUR money. We need to make sure that politicians are acting in our best interests.  Politicians that don't do this need to be held responsible for their actions. 2012 is the next National election.  Get informed and cast your vote!
Did you ever notice that when you put the words "The" and "IRS" together, it spells "THEIRS?"  ~Author Unknown
I hope this post gets you thinking about what you pay the government and what you receive for your money!

If you haven't filed your taxes yet this year... 
For the past few years, I've been doing my taxes online with the help of H&R Block.  The site is very user-friendly and helpful because it walks you through the process step by step.   I really appreciate the tips and tax law explanations along the way.  If you haven’t done your taxes yet, I highly recommend using H&R Block’s services.




2 comments:

  1. I don't mind paying taxes but dislike that I don't know where my money is really going. I'd like it if we could directly elect the programs in which to invest our money. Say we're required to pay 25% income tax, and you can split it between 10 different funds of your choice.... theoretically whichever programs receive the most money would thrive, and those that receive less would fail or have to rely on private donations. The American people will have spoken with their wallets.

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  2. I would prefer to only be taxed for essential programs and let all discretionary programs be funded by charities. If we paid less in taxes we could all be more charitable!

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