Ah, I made it through another April 15th, my taxes are all paid up!
Well, not exactly. You see you paid your taxes for last year. Your tax bill for 2008 is still owed and in fact tax freedom day doesn’t come until April 23, 2008, which is actually two days earlier than last year. Many people will be getting a tax return this year and they rejoice. In fact the average tax return in 2005 (latest stats available from the IRS) was $2,287.
Some of you may be thinking, “WOW, I wish I could get a return like that!”
Here’s the problem with that; for that average American it means you lost $190.58 per month! It also means the government used your money interest free. Try owing the IRS $2287 for a whole year and see how much you owe once you finally pay the bill.
Had you put that $190 a month in the bank you would have earned $37 in interest (at 3%).
What if you owed that money to the IRS and didn’t pay your tax bill for 60 days, what would happen?
If you owed $2287 and you did not pay your bill for 60 days, you would now owe the IRS $2521. That’s right, a whopping $234 in late filing penalties.
The quickest way to start a tax revolution in America is to give Americans their full gross income and make them write out federal, state, and local tax checks every month. When you actually have to deduct that money from your balance every month, then you really realize what you’re losing. But the government knows if it can deduct it before you see it, well, most Americans are just glad to receive a paycheck.
I want to share two diametrically opposed viewpoints on taxes. The first one is from the Democratic Party’s 20th Century hero; the second is from the Republican Party’s 20th Century hero:
“Taxes, after all, are dues that we pay for the privileges of membership in an organized society.” ~Franklin D. Roosevelt
“The taxpayer – that’s someone who works for the federal government but doesn’t have to take the civil service examination.” ~Ronald Reagan
Did you see the difference? To FDR we are privileged to live “in an organized society” as opposed to being endowed “by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.”
Reagan, on the other hand, believed that while some taxes were necessary, much of it made us beholden to the government. Here are three more classic quotes from Reagan:
Government always finds a need for whatever money it gets.
Government does not solve problems; it subsidizes them.
Government’s view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.
In the immortal words of Hank Hill, “I miss votin’ for that man.”
Okay, here’s a video to take us out of here. Legend has it that George Harrison wrote this song after he realized how much money he was paying in taxes.