Tax facts and fiction

Tax Day is looming, the deadline we all over complain about, deal with anyway and somehow always survive — often ending with a nice refund check from the IRS. How much of our complaining is justified and how much is just an inbred response to anything made mandatory by the big, bad government?
We’re not about to offer extra support or encouragement to the Tax Man here, but why can’t we try to make this April 15 a so-called “teachable moment?” Of course, we all think we are taxed too much and that the other guy is never taxed enough. Some believe our federal, state and local governments waste way too much of our hard-earned incomes and give too much of it away to people that don’t deserve it — whether that is welfare recipients or corporations.
Anyway, that’s how we feel. Now, let’s separate tax facts from tax fiction. It might help us fill in the time between April 15 and when our tax refund checks arrive in the mail. For this tax examination, we are only going to look at income taxes, that big bite that comes out of our weekly paychecks and funds 47 percent of the federal government and 45 percent of California’s state operating budget.
Current federal income taxes are calculated in seven different brackets, with the lowest wage earners paying 10 percent of their taxable incomes and the highest individual wage earners paying 39.6 percent. It’s true that below-poverty households pay no income taxes and it is also true that giant corporations like PG&E, General Motors, United Airlines, Hewlett-Packard and many oil and energy corporations also pay no income taxes.
The middle third of income tax payers (annual incomes of $200,000 to $1 million) pay the biggest portion of the nation’s $368 billion income taxes. These are the folks with the most tax day complaining to do. The average taxpayer this year will pay 19.8 percent in federal income taxes, plus another 6.9 percent to Social Security and Medicare.
California has one of the nation’s highest individual income taxes, with some states having none. (On the other hand, some cities and local jurisdictions in some states also collect a local income tax.) California’s top income tax is 12.2 percent. State corporate income tax is 8.8 percent. It’s more expensive — tax wise — to live in California than in almost any other state in America.
Where does all our income tax money get spent? At the federal level, 33 percent goes to Social Security and 27 percent more goes to Medicare. The military gets the next biggest chunk at 16 percent. After that we must pay for debt service (7 percent), veterans (4 percent), transportation (3 percent) and much less on education, housing, science and environmental protection.
Our California income taxes mostly pay for health care (36 percent), pensions (19 percent), education, transportation and criminal justice. A lot of our state government expenditures are also paid by collected sales taxes, totaling 27 percent of the state’s revenues.
When we listen to each other complain about paying taxes, we are mostly hearing us bitch about our taxes going to the wrong places, rather than just paying too much — or not getting a big enough refund check.
So, maybe we don’t mind paying our taxes as much as we protest how they get spent.  Our taxes are allocated under thousands of laws, programs and policies. Some are as big as the federal Farm Bill that gives more subsidies to the biofuel industry than to real farmers. Some are as small as tax shelters for billionaires that own mega-yachts. Special taxes for special causes, there’s your villains.
Some politicians want to abolish the IRS. If we do that, who will mail us our refund checks?
— Rollie Atkinson