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Ellen Belcher is the Dayton Daily News opinion pages editor. She writes about state government, education, the environment, higher education and all things Dayton.
Martin Gottlieb is an editorial writer and columnist for the Dayton Daily News opinion pages. He focuses on the political process itself and does such national issues as war, the economy, taxes and Social Security, as well as a hodge-podge of local and state issues.Home > Blogs > A Matter of Opinion > Archives > 2010 > April > 21 > Entry
Martin Gottlieb: April 15 not such a nightmare for most
April is said to put dread in the hearts of the American people, taxing them in more ways than one. The anger and frustration associated with April 15 used to be expressed by comedians and in social settings. Now it’s done in political demonstrations. This year, from Cincinnati to Dayton to Columbus, lots of Ohioans went to hear speakers decry the effect of taxes on freedom, on the American ideal. Complaints about taxes are the only thing more certain than death and taxes.
Here, however, after all the complaints have been heard again and again, are a few other points about how the federal income tax — and the process of paying it — affects actual Americans:
• About 47 percent of households don’t even have enough income to owe federal income taxes. This point, too, has come in for a fair share of attention lately.
Somehow, though, its existence doesn’t dent the consciousness of those who portray April 15 as a universally shared nightmare.
The exclusion of low-income people from this tax makes the overall tax burden fairer. Low-income people do pay state and local taxes, which can hit the poor hardest.
Think about sales taxes, for example. If you have to spend every dime you make, you pay the sales taxes on a bigger percentage of your income than if you can afford to put some money away. (And you hope to see that latter money grow.)
Or look at state and local income taxes. When Ohio “reformed” its tax code in 2005, the main idea was reduction in the income tax and in its progressivity. Progressivity — the degree to which rates are higher on those with more income — is considered a bad thing at the state level. That makes the progressivity of federal income taxes all the more important.
Low-income people also pay Social Security taxes, starting with the first dollar they earn. This hits them harder than the very affluent, who don’t pay on income above a certain point.
So, bottom line, those who don’t pay federal income taxes do pay as much of their income in taxes as any other class. (Citizen for Tax Justice, a liberal think tank, among others, has run the numbers.)
• A lot of people are trying to sell the notion that the federal income tax is out of control. Baloney. The stimulus that was passed last year entailed cuts for most people. The George W. Bush years saw repeated cuts. Even before that, the burden was falling as a percentage of income. Reported the Center on Budget and Policy Priorities, “The Treasury data show that in 1999, the typical family of four with two children was paying a smaller percentage of its income in federal income taxes than at any time since 1966.”
• For 2008, out of 155 million individual returns filed, 90 million were done online. The IRS says more than 70 percent of those were done by professionals doing people’s taxes.
It’s a shame the code is so complex that professionals are necessary. Still, these stats dispose of the image of a people burning midnight oil in a desperate effort to understand incomprehensible forms and bureaucratic rules.
Of those filing for themselves, many use simple forms. Software programs have made even moderately complex returns easy, allowing people to fill in the same blanks every year. And many people simply have confidence in their ability to handle situations involving math and rules.
• As April 15 was approaching, the IRS reported that 80 million Americans — about half of those filing personal returns — had received tax refunds. The average refund was almost $3,000.
That doesn’t tell you how much people are paying, of course. But it is another does big dent in the notion that April 15 is universally experienced as hell.
• Let’s end with a couple of polls, which are best used only as supporting material. At a time when public frustration with Washington is at a high, the IRS is an exception. A Pew study finds the IRS has a favorable rating, 47 percent, that’s up 9 points, more than any agency since 1997. For a tax agency, that’s remarkably high.
• Sixty-two percent of Americans say they are treated fairly by the tax code, another remarkable number, when you contemplate the special insight we all have into the universe’s tendency to victimize us more than others.
The same CBS/New York Times poll put the question to 881 people who describe themselves as Tea Party tax protesters. Even 50 percent of them say they’re treated fairly; 42 percent said no; 6 percent didn’t know. Surprising.
Submitted for the record.
Permalink | Comments (7) | Post your comment | Categories: Columns, Martin Gottlieb, National government, Ohio government
Comments
By Rob
April 21, 2010 11:07 AM | Link to this
of the 90 million tax returns done online, 70% (63 million) were done by professionals? I’m hardpressed to buy that stat…still, it tells you something. Our code is horribly complex. Yes, software does it’s job and I certainly purchase an update every year. But honestly now, why should my tax return be 18 PAGES long? Between my bride and I, we do OK and we do donate where appropriate but we are not tycoons by any stretch of the imagination…and yet, our 2010 tax return was 18 pages. Why?
By Kurt
April 21, 2010 6:35 PM | Link to this
Marty, I want you to tell me what gives the sainted poor the right, who do not pay any federal income taxes, and indeed are always getting gov. checks of some sort, the right, under the U.S. Constitution, to seize one person’s wealth, and give it to them, to vote a democrat, back in office. I call it robbery, but you tell me what it is, Comrade Martin.
By Mark Dues
April 21, 2010 9:10 PM | Link to this
Martin - your prescription for funding the government is “progressively” driving all the job-generating resources from this country. Take a look at Europe and you have us in just a few decades. The only fair tax is the FairTax. If you really understand this tax replacement (not tax hike) you’ll agree that this is the best future for our country.
By Mike R
April 22, 2010 12:09 AM | Link to this
Martin—If you actually took time to understand the anger of taxpayers your outlook and your editorials would take a much different tone. Get out of the Ivory Tower and get in touch with the majority of Americans. 1) People aren’t angry at “paying taxes” they’re angry at wasteful spending by the State and Federal Gov’t and the subsequent ADDITIONAL Taxes to cover that waste! This year alone there is $16.5 BILLION in Pork Projects. Here are a few: New Minor League baseball stadium in Billings, MT (there’s already one there); A rest-stop on a 5 1/2 mile bike path in Minn.; A bike path along the Louisiana levees—that have yet to be upgraded. 2) You obviously believe the Gov’t can spend your money more wisely than you or your family—The vast majority of Americans feel differently. 3) Liberal elites, like you, feel you’re much more intelligent than “Middle-America” and can spend the Average Joe’s Money better than he. 4) Over half of the Nations’ small businesses pay taxes at the individual rate, so an increase in the progressive rate hurts those businesses. Since 1970 almost 80% of all new jobs created are from small businesses! 5) Poor people don’t have businesses, or start one, or hire people. Have your ever worked for a poor person?? Of course, not…that would be beneath you. 5) 75% of today’s workers participate in a 401K plan—An increase in the Capital Gains tax WILL have a negative impact on their retirement returns. Martin, you do a wonderful job repeating Obama’s, Pelosi’s, Reid’s, and Strickland’s, talking points. Seriously, you really do. So, after you just opined how the low-income people suffer paying State and Local Sales Tax will you stand up and opine for them AGAINST the V.A.T. that Obama will propose in the coming months?? A V.A.T will be much more punishing to low-income people than most people can imagine. This V.A.T will be ADDED on top of State and Local taxes…it will be on staples too…food, clothing, shelter. I don’t think you have the balls to stand up for the little people if it goes against the talking points of Obama & Company.
By Raoul
April 22, 2010 7:52 AM | Link to this
Really Martin? You are seriously defending the tax codes? You failed to mention that those poor people not making enough to pay income taxes are the beneficiaries of welfare, food stamps, housing, etc. Why don’t you do a little more research and check in with the Heritage Foundation instead of the New York Times? You might get a slightly different version of the effects of the progressive tax system. When roughly 50% of the population pays 100% of the tax burden, how long will it be before we all just decide to stay at home and let the government take care of us? Of course, there won’t be any government left because nobody will be paying taxes. To echo other comments, we all agree that taxation of some degree is required to provide a certain level of government services. But when that tax money (like in the Rev. Trammel case) is doled out with no oversight, no control, no accountability, and stuffs the pockets of insincere ‘do gooders’, you get a Tea Party movement!
By Raoul
April 22, 2010 7:53 AM | Link to this
Really Martin? You are seriously defending the tax codes? You failed to mention that those poor people not making enough to pay income taxes are the beneficiaries of welfare, food stamps, housing, etc. Why don’t you do a little more research and check in with the Heritage Foundation instead of the New York Times? You might get a slightly different version of the effects of the progressive tax system. When roughly 50% of the population pays 100% of the tax burden, how long will it be before we all just decide to stay at home and let the government take care of us? Of course, there won’t be any government left because nobody will be paying taxes. To echo other comments, we all agree that taxation of some degree is required to provide a certain level of government services. But when that tax money (like in the Rev. Trammel case) is doled out with no oversight, no control, no accountability, and stuffs the pockets of insincere ‘do gooders’, you get a Tea Party movement!
By parental
April 23, 2010 8:08 AM | Link to this
I completely disagree with the idea that is fair for nearly half to pay NOTHING for what they receive from the federal gov’t. In addition, many of those people will receive a payment from the federal gov’t like the EITC, etc. Paying your own way is the American way. The current situation is not. What we have today is a system set up by politicans to buy votes. Next will be a VAT exempting those who pay no federal taxes….Thus permanently buying the votes of the non-tax payers. Progressivity in the tax code is wrong. Next the leftists will require progressive menu prices. It’s no different.