April 15 may be behind us, but do not think for a minute that your tax bill has been paid. At least, not yet.
Tax Freedom Day is that day of the year when you have worked and earned enough money to pay all of your taxes. After that infamous day has passed, the money you earn is actually yours.
You can save it. Invest it. Go on vacation. You can squander, spend or save all you want. The problem is the bank will still want the mortgage paid every month. All your other monthly bills will also need to be paid as you wait for your Tax Freedom Day to arrive.
Calculating your personal Tax Freedom Day is fairly easy. Take all the taxes you pay, including a best-guesstimate of the sales tax you pay, and compare that figure to your total income.
According to experts at the online site, The Motley Fool, the average American spends 31 percent of their total income on taxes. The easy calculation would be 31 percent times 365 (the number of days in a year) and the answer is 114 days. That means that Tax Freedom Day for the average American is April 24.
To find your personal Tax Freedom Day, take a quick look at your latest tax return and find the total amount of all taxes you paid. Do a little math to find what percentage of your total income that is and multiple that number by 365 and you can then find your own personal Tax Freedom Day.
But, don’t do it. It’s depressing.
So, our Tax Freedom Day is usually toward the end of April or early May. There are several countries in Europe that don’t get to celebrate their freedom from taxes until June or even mid-July. Their annual tax debt is over 50 percent of their annual income.
Obviously, our local, state and federal government should do everything possible to keep taxes as low as possible.
We should take our cue from our citizens. If the citizens complain about the condition of the roads, money will need to be spent on improving roadways. If there is no money in reserve for this purpose, a tax will need to be approved for road improvement.
The City of Wilmington just did that very thing. Road improvements will start this summer.
The goal of all government should be to tax their citizens no more than is needed. Government should never build up funds for no specific purpose. There is a fine line between too much and not enough. When government doesn’t do everything that citizens want, when they want it, it’s sometimes called “kicking the can down the road.”
Personally, I would rather kick the can a few times than have my taxes bumped up every time a politician has a project they think needs to be funded. But, at times, it is a fine line.
Taxes are necessary. Without local taxes, there would be no police department, fire department or EMS personnel. Our streets would crumble into complete disrepair; just one big pothole. Education would be something our young people could only dream about. There would be no local school. Taxes are necessary.
But, sometimes I just scratch my head when I see how the federal government spends our tax dollars.
Recently, Arlington, Virginia received federal money to build a $1 million bus stop. Excessive? Most people would say yes. Also, for some reason the federal government decided there was value in spending $175,587 “to determine if cocaine makes Japanese quail engage in sexually risky behavior.”
You just cannot make-up this type of stupid stuff.
The old saying is, “There are only two things in life that are certain – Death and Taxes.” There is probably one more thing that is certain in life – people will never agree on how their tax dollars should be spent.
At least we’re not collecting for some of the stupid things we used to do.
In ancient Rome, there used to be a tax on urine. I feel somewhat sorry for the tax collector who had to collect the pee-pee tax. In England, they used to have a special tax on bricks and printed wallpaper. That bumped up the cost of remodeling. Maybe that’s why many of the old English castles are still so dingy.
April 15 is our normal deadline for submitting our personal income taxes. That date was this past Saturday. Because of that, the IRS moved our deadline to today – April 18.
Debbie and I submitted our taxes a few weeks ago. I’m sure that Donald and Melania have already submitted their 2016 tax forms. Their accountants and attorneys would make sure of that. A lot of people would certainly like to see President Trump’s tax filings. That will probably never happen, but if anyone wants to see mine, just let me know.
They may be pretty boring, but they’re mine.
Randy Riley is President of Council of Wilmington.