Tax Day 2008
Tax day here in the US, and given that our overall income was up last year by a fair amount, we ended up owing a rather significant amount today, federal, state and local. Because I’m self-employed, we also have to file quarterly taxes today as well, again, federal, state and local. So — joy — I get taxed twice on the same day. To give you an idea of how much we’ve paid out today in taxes, the proverbial picture worth a thousand words:
This is where being apparently one of the few American families that actually puts a significant amount of its annual income into savings comes in handy; we’ve got it covered. And we knew it was coming, so it’s not like we weren’t ready for it. It’s still just wacky to have to pay out that much at one time, especially when we’ve already been paying out quarterly.
We pay a lot in taxes, but I don’t think we pay too much in taxes; we have quite a lot of deductions and we have a smart accountant, which is good (as opposed to a clever accountant, which can get you into trouble), and as a percentage of our overall income, our tax bite is not especially onerous. Sure, it doesn’t feel that way just this very second, but when I calculate it out it the percentage does not send me into paroxysms of rage.
Also, I have never been able to manage the sort of doublethink that allows some people to believe that answer to every possible problem is a tax cut, even as they spend more on government services of all sorts. Being as I am a real grown-up, I understand I need to pay in for services the government provides, rather than piling up debt for my child and her generation to deal with. Whether we need a government as big as we have is an open question, although I would suggest if one believes we don’t (and I may be one of these), the way to deal with it is shrink the government and then reduce taxes to fit, rather than reduce taxes and shrink the government to fit, since over the last 30 years it’s clear we don’t do a very good job of the latter.
Money is magical thinking in some respects, since none of it is actually tied to anything real anymore; its value is just a shared hallucination. That said, I prefer my magical thinking to be of a practical bent, which means paying a reasonable amount of taxes and not whining like a kicked dog about it. To repeat: We pay a lot in taxes. I don’t think we pay too much.
How is your tax day going? Get a return? Owe some money? Got the sum smack dab perfect and owe nothing? Share!