Subtitle: BAG Day Will Be Thin This Year
Because of continual changes wrought over the last 4 years-getting married, having two kids, turning my house into a rental and back into my residence-getting an accurate prediction of my taxes has been difficult. I've gotten a year-end refund every year since I bought the house, but the size has varied greatly. So, on Friday the Army had posted the W-2s for myself and my wife, so I could get started. And I got the first of my 1099s, as well.
So, I fire up the tax program, input the numbers, and...Fuck. We owe Uncle Sam just short of $900, and it'll go up when I get the rest of the 1099s, so the total due will probably be around $1,000.
Now, here's where the evil and insidious part comes in. Intellectually, I know that I'm better off, having had possession of that $1k and having been able to sock in away where it could earn interest, instead of giving the .gov an interest free loan, which is what that 'refund' money amounts to.
But the thought still crept into my head that maybe I should go reduce the number of exemptions on my W-4 so that next year I'll get a refund. Because, like most Americans, I look forward to that 'gift' at the end of the year, and I get upset when I don't get it. Even though I know that it's not a gift, it's money Uncle Sam borrowed from me without my permission, and, unlike a bank, didn't even have the decency to pay me even 2%. So actually, when you factor in inflation, you're actually losing money.
The other evil part of withholding is it means most people have no clue how much money Uncle Sam takes from them every month and every year. They only know how much shows up in their bank account every pay period. If I don't look at my pay statement closely, I don't have any idea, either. (This also applies to lumping property taxes in with your mortgage payment. Most homeowners, myself included, have no idea how much they pay in property taxes.) For a nation founded on, among other things, "No taxation without representation," Americans have developed a decidedly unhealthy apathy toward their taxes.
As a solution to the twin problems of 1)tax unpredictability, and 2) people not knowing how much they actually pay, I propose the following two prong solution:
1) A Constitutional Amendment limiting the income tax to a flat rate of not more than 10% of taxable income. Taxable income would be defined by statutory law, but all taxpayers would receive an exemption for all income up to the federally defined poverty level for individuals. All members of a household would qualify for this exemption, thus a family of four would be exempt from taxation on any income up to 4x the poverty level (somewhere in the area of $56k-4x $14k-right now, I think).
2) The Friedman Amendment, named in honor of the late great Nobel-prize winning economist Milton Friedman:
Amendment XXVIII�Limiting Taxation and Voting to Specific Dates
- Each year all Federal, State, and local government shall hold two elections for public offices: a primary election the first Tuesday in May and a general election the first Tuesday in November.
- All taxes and set-asides, except the collection of sales taxes by sellers from direct consumers, shall be paid twice annually, due two weeks before the primary and general elections.
- The Congress shall have power to enforce this article by appropriate legislation.
Actually, I would go one step further and limit state and local governments to two elections per annum, <i>period</i>, given the habit of local taxing authorities (school districts, fire districts, etc) to declare 'emergencies' for such things as facilities maintenance and construction to accomodate (thoroughly predictable) growth and then have a special election at an odd time. And to keep doing so until their levy passes. This would put an end to that nonsense, as well as giving Americans an accurate idea of how much they pay in taxes immediately before each election.