Income Tax Day

April 15th is the day of doom in the United States. Uh, that would be the date on which each individual and corporation must turn in their income tax for and pay whatever taxes they have yet to pay, but still owe, during the year. Income tax day is a universal pain in the butt. I guess we should blame the Italians for the income tax. The word tax is a Latin one that is derived from "Taxo", meaning "I estimate". Ha! If you estimate your taxes and get it wrong now you will likely be estimating from prison.  About the only thing government is serious about is getting tax money from its constituents. Roman emperor Vespasian placed a tax on urine in the 1st century A.D. (Urine at that time was collected and used as a source of ammonia for tanning hides and laundering garments).  They are so serious here now about getting owed taxes law, for example, says that if someone reports their company for tax evasion in the U.S., he or she will receive 30% of the amount collected.

Since President Obama was elected president income taxes are disappearing on the lower end and increasing on the more wealthy. Around 47% of Americans did not pay income tax last year because they are "too poor" to pay.  That seems to violate the old democratic axiom that anyone who makes any income should pay something in taxes  because if not they will be irresponsible voters, voting for any politician who reduces or eliminates their tax liability (a method  used repeatedly by Obama too win votes).
Then there are the tax write-offs, exclusions and loop holes in the U.S. income tax laws. They make it possible for some (mostly the wealthy) to lower their tax burden substantially. The U.S. Congress , who passes the tax laws, makes it very complicated for one to decipher tax laws. Just knowing what taxes you owe is difficult, meaning more and more income tax filers, at all income levels, use services to figure it all out.  Each year over 1 million accountants are hired by people to figure out their taxes.

Despite the Obama cry that "the rich don't pay enough taxes" the IRS, the government's tax agency itself , says that wealthier Americans pay higher taxes than middle or lower income earners. The wealthiest 1% of the population earns 19% of income but pays 37% of the income tax. The top 10% pays 68% of the tab. The bottom 50% earns 13% of the income, but pays just 3% of the taxes. In my view everyone here pays too little in taxes, given all the entitlements they want from the government. Under Obama administration the federal deficit in the United States has tripled in the past 5 years, largely because his philosophy has been to hand out as much "free stuff' to his constituents as possible in return for their votes. It has worked so far if you don't believe the government should worry about paying its debts.

Historians say that tax laws have compromised citizens’ liberty more often than foreign invaders. Ultimately, all good tax systems tend to go bad. In fact, I doubt any nation today can say it has a "fair income tax" system. If you live in Denmark, Sweden or the Netherlands, for example, the average income tax rate is more than half of what the payer makes each year. It would be nice to get rid of this complicated and unfair income tax and replace it with a reasonable tax which everyone pays. Currently, there are only eight countries that do not make their citizens pay an income tax. They are, the United Arab Emirates, Qatar, Oman, Kuwait (which gets so much revenue from oil and gas it doesn't need an income tax), the Cayman Islands (a small population that thrives on tourist revenue), Bahrain (but they pay a high social security tax instead) and Bermuda and The Bahamas (bigger than the Cayman Islands, but also benefiting from tourists paying the bills).

May you never be audited by the tax police and may you find as many tax loop holes as possible.