Tax Time Observations

Late one night, just blocks from the Capitol, a mugger jumped into the path of a well-dressed fellow and stuck a gun in his ribs.  “Give me your money,” the thief demanded.  “Are you kidding?” the man said.  “I’m a U.S. Congressman!”  “In that case,” the mugger growled, cocking his weapon, “give me my money.” –  Playboy Magazine

I could not help myself from venturing into this territory.  I acknowledge that other than having paid taxes for the past 40-plus years this is out of my area of expertise.  However the internet is a wonderful place, particularly if you limit it to verifiable facts rather than opinion or hyperbole.  This information is from www.taxfoundation.org which labels itself “non-partisan”.  My observation is that their data seem to be accurate and factual.  The editorial content will probably appeal more to people who are fiscally conservative.

Who Pays What?

This information reflects 2007 data; the most recent year for which the IRS has finalized the results.  Also, these figures are for INCOME tax.  Social Security, Medicare and other state and local taxes are not included. – The top 5% of taxpayers, with “Adjusted Gross Income” (AGI) above $160,000 had 37% of the AGI  and paid 61% of the income tax collected. – The top 25%, with AGI above $67,000 had 69% of AGI and paid 87% of taxes. – The bottom 50% with AGI below $33,000 had 12% of AGI and paid 3% of taxes.

Preliminary figures for 2008 indicate the following

Taxpayers with AGI at $250,000 and above had 26% of AGI and paid 46% of taxes.

Estimate for 2010

47% of taxpayers will pay NO income tax.

How painful is it to pay your taxes?

Those of us who are self-employed have a really good idea of the “system”.  I reserve 40% of each check received to pay my quarterly deposits which do include, along with income tax, social security, medicare and Colorado income tax.  Yours are probably not that different, just more hidden due to “withholding” and the employer paying half of the social security deposit.

Think about the above

Taxes are a price we pay for our society.  47% of filers not paying any income tax is a pretty high percentage of citizens without a stake in our government.