Folks, I have finally surrendered. I had to have my taxes done by a CPA. I’m going to say that I made this move, to a CPA, because I just didn’t have time.
Of course, my students will throw back at me what I always tell them: “There is always time to do what you want to do.”
I don’t want to admit that 10,000 pages of the tax code is too much for me. I have actually taught a tax class and have jokingly said to my students that if I ever caught them going to a tax preparer I would go back and lower their grade. So much for that empty statement.
The excuse could be used that more than 60 percent of us, the taxpayers, use the help of some sort of tax preparer. But I have never been known to follow the herd over a cliff.
I recently read an article by Mary Dalrymple of The Associated Press that stated, “Three of the four senior lawmakers on the Senate finance and the House ways and means committees – the very people in charge of writing tax laws – turn to paid professionals to file their annual returns.”
This could be used for an excuse also, but it is too scary to think that the people who write the laws don’t even do their own taxes.
In the “good old days,” I knew how my tax bill was computed.
Now however, I feel kind of left out of, or disconnected from, the whole process. I have lost a sense of pride that I had when I did my own taxes.
I have to admit though my CPA did a much better and neater job than I ever did. He delivered the originals to me ready to be signed with pre-addressed envelopes to the federal and state tax departments. And, he had nice copies prepared for my personal files. This process was just way too easy.
Anyway, I have the feeling that I have somehow been excluded from the system. I work, and all of these government entities take what they want, and whatever is left I can use for food, rent, and energy.
Let’s take a short look at all the taxes we pay and how we pay them.
Most of us are aware of the federal income tax. If you work for a living, the taxes are withheld from your wages – so it doesn’t seem to hurt until the end of the year when we look at the totals.
These taxes are based on what is called earned income. In other words, we worked as a wage earner, a small business owner, or a farmer. There is also a federal tax on unearned income called the capital gains tax. This is a tax on profits made from investments that are owned for over a year.
Also at the federal level we have Social Security. The official name for Social Security is “Old Age Survivors and Disability Insurance” (OASDI). Please note that Social Security is insurance and not a retirement. We also pay Medicare tax to the federal government.
When we are wage-earners, our employer must match and pay the same amount of Social Security and Medicare tax that each employee pays.
The people who feel the pain of this tax are the small business owners. The Internal Revenue Service (IRS) considers the owner of a small business and employer of him or herself. So they, because they employ themselves, must pay both ends. They pay both the employees’ share and the employers’ share…a double whammy.
Then we have state income tax and sales tax, and county sales tax and property tax, and city income tax and school income tax and property tax. And, we don’t want to forget the Lottery. This is a voluntary tax, but still a tax, and we don’t want to forget special taxes on items like cigarettes and license fees. License fees we pay on things like hunting, fishing, driver’s license, car license plate, dog license, and marriage license. I think you get the idea a tax is a tax by whatever name.
I guess the thing that bothers me the most is not the paying of taxes, I don’t mind paying taxes as long as everyone else pays their share. But, what does bother me is when the government plays the old shell game, you know the “hand is quicker than the eye thing, ” when the government tells me that they are cutting my taxes and they give me the tax cut with one hand while the other hand is quietly taking money out of my pocket. We have had two of these tax switches recently.
Our state government cut our income tax but at the same time stuck us with a new form of sales tax “Commercial Activities Tax” (CAT).
We could see the income tax, but the CAT is hidden from us. Maybe our legislators figure if we can’t see the tax that we pay, we won’t feel the pain as much.
Once the CAT is fully implemented, we taxpayers won’t have any way of knowing how much we pay.
The CAT was sold to us on the basis that it was a fair tax; in other words, everyone had to pay it. However, I see bills proposed in the House and Senate in Columbus that will exempt certain special interest groups. So, like everything else, for those of us who don’t have a friend in Columbus, we will have to carry the heavier load.
The other tax shell game that our legislators hit us with was the emergency sales tax that they put on our backs a few years ago.
At that time, they promised that it would be lifted off our backs in two years. Well, when it came time for them to keep their promise, they kept one half of their promise. But to make up for the half that they gave back to us, they cut state money to our county governments.
Our county governments then raised our taxes to make up for the shortfall from the state. So, it was the old shell game again. They took one hand out of our pocket and put the other hand in.
And, we don’t want to forget the increase in gasoline taxes each year. They are now more than 50 cents per gallon and rising.
All of this hasn’t eased my conscience for not doing my own taxes. Maybe next year I can come up with better excuses.
Bill Horne
Bill Horne is a professor of economics at Southern State Community College and a columnist for The Times-Gazette.
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