At the risk of sounding like a hopeless utopian, I will confess that I actually don’t mind paying my taxes. April 15th is not a day of horror for me, and any contact that I’ve had with the IRS has been professional and relatively painless. And now that the taxman has cometh (and gone) for another year, I find myself taken aback at what I hear from my fellow citizens about the odious burdens of taxation that we endure in these United States.
Nearly a month after Tax Day, we’re still hearing about how abused we all are by the various departments of revenue that collect our tax dollars. These agencies, we hear again and again, take our hard-earned money and run, presumably funneling it into tiny quilts for spotted owls and black helicopter paint.
In tandem with the righteous
anger over these “vanishing” tax dollars come ideas like “Tax Freedom
Day”—supposedly the day when Americans will have “earned enough money to pay
this year’s tax obligations at the federal, state and local levels.” Reports on
Tax Freedom Day tend to present it as accepted fact, while in actuality the
group that prepares and disseminates the report, the Tax Foundation, is far
from unbiased.
Founded in 1937 by some of that
era’s titans of industry, the Tax Foundation even releases its reports with a
methodology paper that makes clear that the estimates refer to the average tax
burden for the whole economy rather than for sub-sections of taxpayers. As the
Center on Budget and Policy Priorities notes, “Journalists and others who
report on ‘Tax Freedom Day’ as if it represented the day until which the
typical or average American must work to pay his or her taxes are misusing
these figures and fostering serious misimpressions about the level of taxes most
Americans pay.”
The fact is that Organization
for Economic Cooperation and Development (OECD) pegs U.S. tax rates, as
measured by total tax revenue as a percentage
of GDP, as the third lowest in the developed world as of the available 2007
data. (I am sorry to report that Mexico and Turkey—both of which are well known
for their transparent public sectors—smoked us on this score.) That says to me
that our government is doing quite a lot with what it has. Moreover, in 2009,
taxes fell for most U.S. taxpayers, making the hullabaloo over burdensome
taxation that much less understandable.
I have a hard time working up
much rage over spending a certain amount of my working time making a
contribution to society. The way I figure it, it would probably take a lot more
than 99 days—the purported 2010 number—for me to earn enough to fund my own
private fire and police departments, water treatment plant and school system.
And that’s just the local stuff! I am certain that I cannot afford even one
fighter jet, tank or infantry battalion for my own private army, and how can I
be sure I am protected from Canada without those? Don’t get me started on the
difficulties of blazing and paving my own coast-to-coast highway system. I
really hate the smell of asphalt, and I wilt in the sun.
Guess I’d be sticking close to
home in a Brave New Tax-Free World. How far would you get?
NB: This column first appeared in yesterday's Business to Business.