2013 taxes and you: Facing ten ugly facts

Facing April 15 has all the joy of sitting on death row, awaiting your final moments on Earth. Photo: Tax time is just around the corner AP

WASHINGTON, April 2, 2013 — The countdown to Tax Day is on: we have less than two weeks to face our National Doom’s Day on April 15. You are either elbow deep in paperwork or you have dumped it all on your accountant or you are at an H&R Block office waiting for your turn.

No matter what your income is, confronting April 15 has all the joy of sitting on death row, awaiting your final moments on Earth.

So you may be surprised to learn just how many of us do get tax refunds, which is not unlike getting a reprieve from the governor or even better, a presidential pardon.

Here ten facts, some ugly, some not so ugly:

1. Who gets tax refunds and how much do they get?

About 75 to 80% of people who file get tax refunds. In 2012, the average taxpayer received on average $2,700 in refunds. This year only 59% of taxpayers expect to see a refund with nearly 20% saying they are sure they will owe the IRS money.

2. How much does the federal government collect in taxes?

In 2011, the last recorded year (2012 taxes have yet to be paid by us), the federal government collected $2.3 trillion in taxes.

Of that $1.1 trillion was in individual income taxes, $200.8 billion in corporate taxes, $741.2 billion in payroll taxes, $268.7 in other taxes, and $9.6 billion in estate and gift taxes.

3. Whose bright idea was it to have an income tax in the first place?

President Lincoln is credited — or blamed — with that decision, so he could pay for the Civil War effort. He got the 1862 Congress to enact the first income tax, a graduated or progressive tax like we still have, increasing the rates on the those tax payers making the most money. That same Congress established the Internal Revenue, the one that still exists today with the same powers and authority.

4. How many millionaires don’t pay income tax?

Out of the 275,000 tax returns with adjusted incomes of $1 million or more, 7,000 of them didn’t pay one dime in income taxes.

5. Where do most millionaires live?

California reported more than 40,000 millionaires. Before you think Hollywood, think Silicon Valley. Want to avoid millionaires and billionaires? Then Vermont with less than 300 of them is the place for you.

6. How much do I have to earn to be in the top 1% that everyone is talking about?

Probably not as much as you thought: earning $369,509 a year puts an individual in that elite group. For an annual income of $116,555 you can join the ten percenters.

More than 7 billion hours are spent filling out our own tax returns

Sad news is that those figures means that 90% of us don’t even come close to being in those income brackets, not even in our dreams.

As for the millionaires in the top 1%, nearly all of them get their millions not from income but from investments and other goodies that are not taxed as income.

7. How much do we spend getting our taxes prepared?

Americans turn to more than one million tax accountants at a cost of $27.7 billion a year. That’s billion with a capital B. The rest of us spend 7.6 billion hours doing our taxes. Again, a billion with a B.

So why do we need so much help? Because the U.S. tax code is 7,000,000,000 words long. That’s 7 billion with another B. No escaping the B-word.

8. What are some of the outrageous deductions that people have tried to take on their taxes?

Here are a few samples, all true examples of what Americans have tried to get away with:

Pole dancing classes. Carrier pigeons. A hip replacement…for a dog. A $1,000 worth of Evian bottled water. Recreational drugs as travel and entertainment expenses. And even a tummy tuck.

9. How many people work for the IRS?

The Internal Revenue Service employs 114,000 people. Or twice as many as the CIA and five times as many as the FBI. 

10. If you rob a bank, do you owe taxes on that money?

In one word: Yes.

To contact Catherine Poe, see above. Her work appears in Ad Lib at the Communities @ WashingtonTimes.com. She can also be heard on Democrats for America’s Future. She is also a contributor to broadcast, print and online media.

 


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Catherine Poe

Catherine was named one of the top Progressives in Maryland along with Senator Barbara Mikulski and Congresswoman Donna Edwards. She has been a guest of President Obama in the Rose Garden.

As past president of Long Island NOW, she worked to reform women's prisons in New York, open the construction trades to women, change laws to safeguard battered women, and protect the rights of rape victims. 

Long active in Democratic politics, she served as the presidentof the Talbot Democrats in Maryland for six years and fought to getthe Health Care Reform bill passed.

Catherine has been published in a diverse range of newspapers and magazines, including Newsday, Star Democrat, Rocky Mountain News, Yellowstone News, and the Massachusetts Review.

If Catherine has learned anything over the years it is that progressive change does not come easily, but in baby steps. 

Contact Catherine Poe

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