Taxes are too high. We all know that. Or maybe we don’t.
But a good many of us believe they are too high for us. And taxes for those other folks are clearly too low.
The “others” who aren’t paying enough may be — depending on your point of view — wealthy Americans who find too many loopholes in the tax code, or those of very modest means who pay no income taxes at all because of things like the Earned Income Tax Credit.
Issues of this sort become particularly pointed around April 15, the deadline for most Americans to file their tax returns.
With the rise of tea parties and widespread anger over ballooning federal spending, one might think more Americans than ever believe their taxes are too high. Surprisingly, that’s not the case.
A Gallup survey, reported in the Kansas City Star, shows roughly half of Americans — 48 percent — believe the income taxes we pay are too high. That’s down considerably since 1969, when Gallup found that 69 percent of Americans believed their income taxes were too high.
One reason there isn’t more tax angst could be that Americans realize our overall tax bill — combined federal, state and local taxes as a percentage of Gross Domestic Product — is lower than all but a handful of developed countries in the world.
But that’s a pretty abstract concept. Far more likely is that large numbers of Americans recognize if they want the benefits government is uniquely situated to provide — from highways to social programs to public lands to protection by our military forces — they need to pay a reasonable amount in federal taxes.
It isn’t our intent today to argue what “a reasonable amount” is. Rather, it is to note that we all receive the benefit of federal government services in some way and Americans fund those services through the shared responsibility of paying taxes.
With that in mind, we think it is unfortunate that some people who derive income through the U.S. economy pay no taxes. Even those low on the income scale should contribute a small amount to the greater good. And paying payroll taxes designed specifically to fund Social Security and Medicare isn’t the same as contributing to general government operations.
Additionally, a tax code that allows a few very wealthy Americans to avoid paying taxes needs changing. But the number of rich folks who pay nothing is minuscule. Some 99.7 percent of those with incomes above $1 million will pay taxes this year — at an average rate of 26 percent — according to the Tax Policy Institute.
Perhaps worst of all is the complex monstrosity our tax code has become. It challenges even professional tax prepares to reach the correct conclusions about deductions, tax credits, shelters and more. And because it is subject to so many different interpretations, the credibility of the IRS is diminished. Little wonder there are so many tax schemes and dubious plans by which Americans seek to avoid paying taxes. Congress, which has made the tax code ever-more complex, should look for more ways to simplify it.
Just a few thoughts to consider. Happy Tax Day, or something like that.