Why Pay Taxes?

380news - September 1, 2017 - Business - Leave a comment

I know, I know, we all hate to pay taxes…I hear it every day, ad nauseum. I don’t think my little article in our small-town paper will add up to a hill of beans, but I want to influence the discussion about taxes. Our taxophobia is deeply ingrained in the American political culture. If I may ask you to think outside of your political mindset, give me a few moments to reframe some of your thinking that taxes are bad. I think taxes are good and here is why: Government on balance is a very positive force in society. You can’t support the things government does and still maintain that the taxes that support those things are bad. These are our dues to be Americans and enjoy the benefits of American society. Again, I want you to think outside the box and not confuse those who govern (who we like to demonize) with the government. The U.S. government spends over $4 trillion (yes, that is with a “T”) each year.

About 70% covers the cost of Social Security, Medicare, Medicaid and interest on the national debt. I don’t think too many of us think these are bad for our society because we do get our contributions back in spades and, in fact, these dollars add back to our economy. Sure, there is waste, abuse and fraud, but we overestimate how much. According to the Government Accountability Office (GAO), this totals less than 5% of the annual budget. This does translate to billions of dollars. Fraud and waste are always a hot political button – but remember those politicians who use it as a tool to get elected are also the ones who are charged with overseeing and addressing it. Hmmmmmmm.

The next largest expenditure – almost 16% of the budget is for defense and military spending. So, for every one of us who sports a “support our troops” bumper sticker or t-shirt, paying our taxes helps support our troops and veterans. Most of us will not argue that to keep our borders safe, fight terrorism, and support our troops are not a waste of tax dollars. The least part of the budget does all of those other wonderful things that we take for granted: Education, NASA space research, the FBI, emergency disaster relief, national parks, roads and infrastructure (water, sewer, dams, electric grid), science and medical research, oversight on banking and investment industries, protecting the environment, agricultural programs, protecting pensions, unemployment insurance, child protection, economic development and protecting our interests abroad through foreign international lending and grants (less than 1% of the budget), etc. etc.. We Americans seem to like to spend more than we make. The budget deficit for the 2017 fiscal yearend is projected to be $443 Billion (yes, that is a “B”). Oddly enough the IRS reports the tax gap to be around $458 Billion (“B”, again).

The tax gap is the difference between the total taxes owed and the taxes paid. Under reporting income makes up 85% of the gap while non-filing and tax underpayment make up the rest. That is a lot of money that you and I have to pay to support those who do not. They get to live the American dream (which I still believe in and support) for free! I believe we should all pay our fair share. Now I will ask you to put your political hat back on and be the voice that influences how our tax dollars are spent. Vote. Write your political representatives. Be heard about your expectations at the city, county, state and federal level. Your government works for you. Stop letting them try to point the finger at others and hold them to their responsibilities. It is not an easy job, and in many cases, thankless, but they choose to do it. Anita Jean, is an Enrolled Agent and owns Financial Fitness in Krugerville, TX . You can reach her at 940.365.3115 or at 5099 US Hwy 377, Suite 400.



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