What is it with Americans and income tax?

In My Humble Opinion
1

Why do (many) Americans seem to have such a problem with income tax? There are websites galore that tell you ways to avoid paying income tax, lawyers devoting their lives to abolishing income tax, people writing to Cecil about how the non-admission of Ohio means no-one has to pay income tax, and just the other day someone here said he’d give up his vote if he didn’t have to pay income tax.

Can you help a confused and tax-paying Scandinavian understand this? What do you have against income tax? Why don’t you have the same problem with sales tax or property tax or whatever other kinds of taxes you have?

2

I cannot speak for Americans, or for anyone but me but here goes.
I see taxtaion as out and out theft. Mugging if you will. Now admittedly I approach this from a libertarian perspective. I object to not only income tax but all forms of taxation (while accepting that some is necessary even in my ideal socity). I see it in very simple terms. The government has a gun to my head (either metaphorically or in actuality) and is demanding with menaces that which I earned. It is a claim, a first mortgage on the product of my effort, my labour. A prior claim to my life that I neither want nor agreed to.

3

I have one complaint about income tax. Filing a return every year, for me, is a pain in the butt. Sure, most of the time I get money back, but when I’m filling out that form I sometimes wonder if it’s worth it.

4

Well, I can tell you My problems with the income tax.

A. It’s overly complicated, and is used as a means of social engineering instead of simply raising federal revenue. The mind boggling system of deductions, exemptions and write offs ect practically forces people to have to pay an accountant if they actually want a fair shake under the current system.

B. It’s sneaky. It’s taken directly out of your paycheck every pay period in small increments so you don’t have the natural sticker shock you would have if you just wrote out a check every year. This I feel causes the government to get away with alot of frivolous and inefficient spending because we don’t hold them very accountable.

C. It’s too easy to increase, decrease, change at will. If there was some sane provisions put in place to stop tinkering with it every election cycle we might have less pork, fewer elections run about taxes instead of issues ect.

D. I don’t feel it’s particularly fair, I favor a flat percentage system or at LEAST a minimally tiered sytem with few if any deductions.
C.

5

I’m really not trying to start a debate, but you did go to school, right? Your children do/will go to school, right? You want to be protected by police, don’t you? You want hospital care, good roads, garbage collection, etc, etc. Now I know how those things (theoretically) would be handled in Libertaria, but under the current system, how can you oppose taxation when it provides these things?

Well, move to Hutt River. It’s not that far from you, is it?

6

<hijack> Sorry quick hijack as I am just responding to Priceguy. I stated why i am opposed to taxation. Yes I received an education, of sorts (that is, as it conformed to the biases of the cirriculum). I do not have, nor will I have children. Simply put, I would phase out taxation ( I understand it cannot be done overnight) and phase out govt ownership/control simultaneously. This thread is not the place however.
Sorry to the OP for the hijack.
</hijack>

7

He’s Tasmanian. Hutt River Provence is in WA. So no, not too close.

Any why couldn’t I just pay the cost of sending my kids to school instead of paying the government a tax of which they then only use part of to fund that education?

Why tax anything? Why not make it true user pays?

8

Well, compared to where I am, he’s a hairsbreadth away.

As UnwrittenNocturne said, this is not the place. Aren’t there any American tax resisters in here? I really want to hear from you. All asleep at this hour, I suppose. Speaking of which, what are you Australians doing up?

9

I don’t object to income tax, I object to how my taxes are used. And I object to the complicated tax system. Federal income tax, State property and sales tax, County property tax, City property and sales tax, Hospital District property tax, School District property tax. I object that the same dollar earned is taxed several times. I object to the Robin Hood sytem in Texas where wealthy school districts are expected to give some of their tax earnings to poor ones, which in my mind is taxation without representation (I’m effectively being taxed by a school district in which I have no vote).

I don’t mind paying taxes, as we must have police and military protection, roads, enforcement of regulations that protect our persons and our environment, children must be educated, and the poor mustn’t be left in the street to starve and freeze, etc. I object to the complicated and sneaky way in which our government takes it and spends it.

I don’t have children, either, but school taxes are absolutely necessary. Not all parents can afford to pay school tuition, and every child needs an education whether their parents can afford it or not. Those children grow up to become a part of our society, and when I’m an old fartess, I will be at their mercy. An educated society is a must.

10

I’m not a tax resistor (I fear going to jail and/or having my brains blown out by Da Feds) but I do not like income tax. That’s not to say I dislike the concept entirely, I just feel that the current system is ridiculously complicated and takes far too much money from the average working stiff. I’ll give you an example. I make $36,000 a year. I’m certainly not dirt-poor, but I’m not rolling in greenbacks either. I have no dependants. For my one-room bachelor-pad in Queens I pay $14,400 a year in rent, not including utilities. My federal income taxes, which are ganked from my paycheck before I even get it, amount to just over six grand. Add medicare, social security, and New York state tax, and it ends up at around eight grand. That leaves me with a grand total of less than $14,000 to live on and save for my luxurious retirement.

The vast majority of this money goes to Federal programs, where it will be mired in beaurocracy and probably do very little to serve my own interests, and some ends up in social security which will most likely be bankrupt by the time I’m an old fart. Worse, a great deal of Federal money is simply redistributed to state programs, with Federal stipulations stacked on.

(The US Constitution forbids the Federal government from regulating certain things that are reserved for the states to decide, so instead they bleed the taxpayers dry, ensuring that states no longer have the resources to pay for their own stuff, then offer the money to state governments in exchange for adopting policies that the current administration desires. The drinking age fiasco is a particularly visible and irksome consequence of such policy at the Federal level.)

The government taxes earned interest on bank accounts. Yes, that’s right, if you stick your money in the bank like a responsible person, you are penalized for that 2.5% compounded goodness.

Capital gains are taxed. This can discourage investment.

Dividends are taxed. That is, of course, after the corporate income which they come from is itself taxed.

What I would like instead:

Far less federal tax and a bit more state tax, if necessary. At least if my money is going to Albany instead of Washington there’s a higher chance of it being used for something that will help me.

Full tax deductions for the minimum cost of rent or a mortgage, up to a point, adjusted for the market you live in.

The elimination of social security. Forcing people at gunpoint to plan for their retirement is annoying and insulting. If I want to save money for my retirement, I can invest in a privately managed fund, which will have far less inept individuals running it than run social security. If I don’t want to, then it’s my own damn fault for being a dumbass.

Education and healthcare should be universal, but preferably funded by user fees (and improved via competition) than by taxes. People who can’t afford to pay shouldn’t have to. (They can be subsidized by richer people who can pay more, and by charities.) The difference between this and income tax is that giving the money is voluntary. If you don’t have kids, you shouldn’t have to pay for the schools, but you can if you want to. Americans are some of the most charitible people on Earth, I believe if the tax burden were significantly lowered a great deal of necessary stuff could be accomplished by charity.

11

Americans have to pay federal income tax on their World Wide Income, even when they’re living overseas. I know of US citizens who have dropped US citizenship and taken other countries’ passports to escape this (they were seriously wealthy, it must be said). Most civilized countries don’t grab your offshore earnings, or insist on taxing you when you’re out of country. Uncle Sam is greedy.

12

I have no problem with income tax. When set up properly, the people who can afford the services (and who benefit the most by them) are the ones paying the most. As a matter of fact, many of our financial problems are caused because we aren’t taxing enough.

It’s also not that hard to do taxes. Takes me a couple of hours, and I have to deal with business expenses and deductions. With tax software these days, it’s a snap.

Basically, Americans are whiners about taxes.

13

Well, my main objection is that the working class has to pay a tax which was originally set up to tax the income of wealthy people. Also, in the US, about half your federal income taxes go to pay for a totally unnecessary military machine and for past wars.

See this chart

14

I too would like to see less Federal spending; or at least wiser spending.

I’m self employed. Last year I made about $50 k. $10 k of that went to taxes. I think that’s pretty steep. There’s a quote out of one of Mark Twain’s books, where an American is visiting abroad. When told of the tax rate in the country he was visiting, the character puffs up and replies that Americans would never stand for such a high rate. I think I’m paying about twice that now (20%).

15

Ofcouse it is not in any way comparable, because of the benefits I recieve for the income tax I pay (free medical care, school and such) - but I pay just around 52% in income tax and various other taxes that are not called so.

I can just imagine the average american going for his guns, if that was imposed on him/her :slight_smile:

Oh… and the 25% “moms” (VAT / sales tax) on almost all purchases doesn’t help either.

16

“Americans have to pay federal income tax on their World Wide Income, even when they’re living overseas”

Actually, that’s not true. I didn’t have to pay income tax when I was living overseas. As long as you are out of the country at least 330 days in a year, you don’t have to pay taxes, but you do have to pay social security.

Despite all our grumbling, Americans have one of the highest rates of tax compliance in the West. This is based on a World Bank study I can’t find on line, but read in grad school.

17

In case you’re interested:

18

Because there are some services for which that just won’t work. Education is a great example. Families that are close to or below the poverty line would have difficulty finding the money to pay for education. It wouldn’t be that they didn’t want to have their children educated, but simply that there is an immediate need to feed, clothe, and house them which takes justifiable precedence over education. You can argue that its parental choice, and in a free society, they’re free to make that choice, but they’re making the choice for someone who can’t speak for themselves and whose future could be impacted terribly by not being educated.

Some things could benefit from a “user pays” system, but there are things for which it just won’t work.

And friedo, I assume you are aware that Social Security is not a means by which workers save for their own retirement. It’s pay as you go, meaning that you’re paying for today’s generation of retirees. Doesn’t necessarily change the equities from your perspective, I’m sure, but I think the issue should be clear.

19

I’m not an anti-taxer, but I do wish that when you had supplemental income it would be taxed at your average rate for all your salary. For example, I’m married, we file jointly, and all taxes coming out of my check each week amount to ~23%. That’s fair. I can live with that. But if your employer gives you a bonus, that gets taxed at the “supplemental” rate, which is much higher. I was recently fortunate enough to be given one that amounted to 13% of my gross income, and the taxes on it amounted to over 45%.

With that said, however, I can’t think of any tax that would be fairer than a progressive income tax. Property taxes are like theft to me, because they assume that property=income. That might have been true in feudal Europe, but it certainly is not always the case now. If a red-hot real estate market drives the value of your house up 300%, I don’t think it’s fair that you should pay four times as much property tax. Your net worth may have gone up, but the utility you derive from your house doesn’t, and your house doesn’t generate any income to speak of, unless you rent it out. Even then, it would be unwise social policy, because you would probably have to pass the tax costs on to your tenants, or take your house off the rental market…undesirable in these times of housing shortages.

20

Yep, I know how social security works. I just wish I could “opt-out” and put all the money I “contribute” into a mutual fund or something.