Guess what time it is? It’s time to dig out that shoebox full of crumbled paper receipts, mysterious and unopened forms from the bank and mortgage companies and also retrieve those annual W-2 statements and other miscellaneous pieces of paper labeled “Important Tax Documents Enclosed.” Hot diggity, it’s tax preparation season again.
Minus another COVID reprieve, income tax returns must be filed by April 18 this year. Early birds can file their federal 1040 forms beginning this week (Jan. 24) and procrastinators (all the rest of us) can file for an extension between now and April 18 and file our final tax forms on Oct. 17. Just remember, you have to pay any owed taxes by April, no matter what.
Taxes. If we weren’t so busy putting ourselves through the torture of tax preparation, we could instead entertain the fantasy of dictating exactly how we want our taxes to be spent. As masters of our own hard-earned incomes, who says we shouldn’t be the ones to set annual tax spending priorities? Just like we vote for candidates for public office, why can’t we “vote” with our tax dollars, too?
We pay lots of taxes, but we only get to vote on very few tax programs. These include local school parcel taxes, fire district assessments and special portions of our sales taxes that support our libraries, public transit and county mental heath and homeless services.
All the rest of our taxes are already spoken for — by somebody else and not us.
The federal budget is $6.7 trillion this year. Not even the Congress gets to decide how most of this money gets spent because 65% of the $6.7 trillion has already been promised to Social Security, Medicare, MediCal and veterans. A lot of our taxes have to cover the federal debt payments ($305 billion) and another $1.3 trillion is being given away in tax breaks to big corporations, Wall Street banks and people with the biggest yachts.
Most of what federal budget money is left after all that goes to the Pentagon and Homeland Security ($715 billion.) Federally-mandated education and health care programs receive the next highest sums. After that, the fighting starts in Congress to allocate our tax money to address climate change, natural disaster relief, anti-poverty and housing programs and money, dare we say it, to “build back better.”
The rest of our taxes pretty much get spent the same way. Half of our property taxes pay for schools as dictated by California’s Prop 98. The remainder helps fund the $2.17 billion county budget. Only a little more than $300 million is left over for the five county supervisors to divvy up among their favorite local projects, which recently have been constrained, by wildfires, the coronavirus pandemic and emergency responses to homelessness, mental health and related crises.
As it turns out, taxes aren’t even fun for the people who actually get to spend the money. Maybe there’s a better way to pay for all our society, infrastructure and environmental needs. Maybe it’s time to look at some successes in other countries, including some where filing taxes is completed each year on a single piece of paper.
There have been several recent test cases in cities and regions of the United States to implement a Universal Basic Income (UBI) program. Individuals and households get a monthly payment from the government to supplement their work or other incomes. These UBI payments replace the complicated and bureaucratic-heavy programs like food stamps, rent subsidies, healthcare co-pays and similar “welfare” programs.
Many economic scholars, including many conservatives, favor various forms of UBI programs. It turns out giving money directly to a person needing a job, food, shelter or school tuition gets better spent than filtering that money through federal, state and local budget contrivances.
If nobody seems to like our present tax system, why does it persist?
