Perfect article for this weekend. I have to do my goddamn tax return this weekend. And it’s all your fault. Before having to run a blog, I would have my return filed by the end of February. I have such little time, that I put off things like inputting info into Quicken and doing my tax return. I will not be a happy camper on Saturday as I’m stuck in my office while it is 75 degrees and sunny outside.
24 Outrageous Facts About Taxes In The United States That Will Blow Your Mind
The U.S. tax code is a complete and utter abomination and it needs to be thrown out entirely. Nobody in their right mind would ever read the whole thing – it is over 3 million words long. Each year, Americans spend billions of hours and hundreds of billions of dollars trying to comply with federal tax requirements. Sadly, it is the honest, hard working Americans in the middle class that always get hit the hardest. The tax code is absolutely riddled with loopholes that big corporations and the ultra-wealthy use to minimize their tax burdens as much as possible. Many poor people do not pay any income taxes at all. The dishonest are rewarded for cheating on their taxes (if they can get away with it) and the ultra-wealthy have moved trillions of dollars to offshore tax havens where they can avoid U.S. taxation altogether. Our system is incredibly unfair to the millions of hard working people in the middle class and upper middle class that drag themselves out of bed and go to work each day and try to do the right thing. In addition, the current U.S. tax system is incredibly inefficient, it diverts a tremendous amount of resources away from more valuable economic activities, and it has chased thousands of businesses and trillions of dollars out of the United States. The U.S. tax code is such a complete and utter mess at this point that it can never be “fixed”. The only rational thing to do is to abolish it completely, and any politician that tells you otherwise is lying to you.
The following are 24 outrageous facts about taxes in the United States that will blow your mind….
1 – The U.S. tax code is now 3.8 million words long. If you took all of William Shakespeare’s works and collected them together, the entire collection would only be about 900,000 words long.
2 – According to the National Taxpayers Union, U.S. taxpayers spend more than 7.6 billion hours complying with federal tax requirements. Imagine what our society would look like if all that time was spent on more economically profitable activities.
3 – 75 years ago, the instructions for Form 1040 were two pages long. Today, they are 189 pages long.
4 – There have been 4,428 changes to the tax code over the last decade. It is incredibly costly to change tax software, tax manuals and tax instruction booklets for all of those changes.
5 – According to the National Taxpayers Union, the IRS currently has 1,999 different publications, forms, and instruction sheets that you can download from the IRS website.
6 – Our tax system has become so complicated that it is almost impossible to file your taxes correctly. For example, back in 1998 Money Magazine had 46 different tax professionals complete a tax return for a hypothetical household. All 46 of them came up with a different result.
7 – In 2009, PC World had five of the most popular tax preparation software websites prepare a tax return for a hypothetical household. All five of them came up with a different result.
8 – The IRS spends $2.45 for every $100 that it collects in taxes.
9 – According to The Tax Foundation, the average American has to work until April 17th just to pay federal, state, and local taxes. Back in 1900, “Tax Freedom Day” came on January 22nd.
10 – When the U.S. government first implemented a personal income tax back in 1913, the vast majority of the population paid a rate of just 1 percent, and the highest marginal tax rate was just 7 percent.
11 – Residents of New Jersey pay $1.64 in taxes for every $1.00 of federal spending that they get back.
12 – The United States is the only nation on the planet that tries to tax citizens on what they earn in foreign countries.
13 – According to Forbes, the 400 highest earning Americans pay an average federal income tax rate of just 18 percent.
14 – Warren Buffett had an effective tax rate of just 17.4 percent for 2010.
15 – The top 20 percent of all income earners in the United States pay approximately 86 percent of all federal income taxes.
16 – Sadly, as Bill Whittle has shown, you could take every single penny that every American earns above $250,000 and it would only fund about 38 percent of the federal budget.
17 – The United States has the highest corporate tax rate in the world (35 percent). In Ireland, the corporate tax rate is only 12.5 percent. This is causing thousands of corporations to move operations out of the United States and into other countries.
18 – Some tax havens are doing a booming business in setting up sham headquarters for U.S. corporations. For example, the city of Zug, Switzerland only has a population of 26,000 people but it is the headquarters for 30,000 companies.
19 – In 1950, corporate taxes accounted for about 30 percent of all federal revenue. In 2012, corporate taxes will account for less than 7 percent of all federal revenue.
20 – In a previous article, I discussed how many of our largest corporations make huge profits and yet pay less than nothing in taxes….
What U.S. corporations are able to get away with is absolutely amazing.
The following figures come directly out of a report by Citizens for Tax Justice. These are combined figures for the tax years 2008, 2009 and 2010.
During those three years, all of the corporations below made a lot of money. Yet all of them paid net taxes that were below zero for those three years combined.
How is that possible? Well, it turns out that instead of paying in taxes to the federal government, they were actually getting money back.
So for these corporations, their rate of taxation was actually below zero.
If you have not seen these before, you are going to have a hard time believing some of these statistics…..
*Honeywell*
Profits: $4.9 billion
Taxes: -$34 million
*Fed Ex*
Profits: $3 billion
Taxes: -$23 million
*Wells Fargo*
Profits: $49.37 billion
Taxes: -$681 million
*Boeing*
Profits: $9.7 billion
Taxes: -$178 million
*Verizon*
Profits: $32.5 billion
Taxes: -$951 million
*Dupont*
Profits: $2.1 billion
Taxes -$72 million
*American Electric Power*
Profits: $5.89 billion
Taxes -$545 million
*General Electric*
Profits: $7.7 billion
Taxes: -$4.7 billion
Are you starting to get the picture?
21 – Exxon-Mobil paid $15 billion in taxes in 2009, but not a single penny went to the U.S. government.
22 – Many wealthy Americans hide enormous amounts of money outside the country in order to avoid paying taxes. According to the IMF, a total of 18 trillion dollars is currently being hidden in offshore banks.
23 – The number of traffic accidents spikes each year right around April 15th. The following is from a recent Bloomberg article….
Deaths from traffic accidents around April 15, traditionally the last day to file individual income taxes in the U.S., rose 6 percent on average on each of the last 30 years of tax filing days compared with a day during the week prior and a week later, according to research published in the Journal of the American Medical Association.
24 – Most of the tax debate is focused on income taxes, but the truth is that Americans pay dozens of other taxes every single year. The following are just a few of the taxes that many Americans pay….
#1 Building Permit Taxes
#2 Capital Gains Taxes
#3 Cigarette Taxes
#4 Court Fines (indirect taxes)
#5 Dog License Taxes
#6 Federal Unemployment Taxes
#7 Fishing License Taxes
#8 Food License Taxes
#9 Gasoline Taxes
#10 Gift Taxes
#11 Hunting License Taxes
#12 Inheritance Taxes
#13 Inventory Taxes
#14 IRS Interest Charges (tax on top of tax)
#15 IRS Penalties (tax on top of tax)
#16 Liquor Taxes
#17 Luxury Taxes
#18 Marriage License Taxes
#19 Medicare Taxes
#20 Property Taxes
#21 Recreational Vehicle Taxes
#22 Toll Booth Taxes
#23 Sales Taxes
#24 Self-Employment Taxes
#25 School Taxes
#26 Septic Permit Taxes
#27 Service Charge Taxes
#28 Social Security Taxes
#29 State Unemployment Taxes (SUTA)
#30 Telephone Federal Excise Taxes
#31 Telephone Federal Universal Service Fee Taxes
#32 Telephone Minimum Usage Surcharge Taxes
#33 Telephone State And Local Taxes
#34 Tire Taxes
#35 Toll Bridge Taxes
#36 Toll Tunnel Taxes
#37 Traffic Fines (indirect taxation)
#38 Utility Taxes
#39 Vehicle License Registration Taxes
#40 Vehicle Sales Taxes
#41 Workers Compensation Taxes
When you account for all forms of taxation on the federal, state and local levels there are many Americans that pay out more than half of their incomes in taxes.
We are being taxed into oblivion, and yet most Americans do not even realize that it is happening.
It is kind of like being killed by thousands of tiny cuts.
So what do all of these taxes buy us?
They buy us a massively bloated government that wastes money on some of the craziest things imaginable.
Millions of Americans work for the federal government, and yet most of them produce very little of real economic value. The following comes from a recent National Review article….
By 2005, the federal government employed 14.6 million people: 1.9 million civil servants, 770,000 postal workers, 1.44 million uniformed service personnel, 7.6 million contractors, and 2.9 million grantees. This amounted to a ratio of five and a half “shadow” government employees for every civil servant on the federal payroll. Since 1999, the government had grown by over 4.5 million employees.
According to that same article, when you add in state and local government workers the numbers are even more dramatic….
According to the U.S. Census Bureau, there are 3.8 million full-time and 1.5 million part-time employees on state payrolls. Local governments add a further 11 million full-time and 3.2 million part-time personnel. This means that state and local governments combined employ 19.5 million Americans.
Yes, we do need some government. For example, without any law enforcement at all our society would descend into complete chaos, and without any military at all we would be completely open to foreign conquest.
In order to have a stable, secure society we do need some government.
However, we definitely do not need the massively bloated government that we have today.
The truth is that most government employees are a drain on the system. Most of them just push paper around. I used to work in Washington D.C. so I know what pushing paper around is all about.
And as I wrote about yesterday, there are millions of other Americans that enjoy a comfortable existence at the expense of the federal government without doing any work whatsoever.
Of course the biggest welfare recipients of all are the big corporations. All forms of corporate welfare should be eliminated immediately.
When are U.S. taxpayers going to get sick and tired of paying for all of this?
Every single year, the federal government, state governments and local governments drain massive amounts of desperately needed money from hard working middle class families.
Then they take that money and spend it on incredibly foolish things.
When are American voters going to stand up and boldly declare that they have been taxed enough already and they aren’t going to take it anymore?
The current tax code is completely and utterly broken and it is beyond repair.
Unfortunately, neither the Republicans or the Democrats are proposing that we should get rid of it.
So we are just going to continue to get more of the same year after year, and it is the middle class that will feel the pain.
bluestem says:
File an extension and let them wait!!!!!!!!!!!!!!!!!!!!John
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13th April 2012 at 1:50 pm
Administrator says:
If you owe, you have to pay with the extension or they hit you with interest and penalties.
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13th April 2012 at 1:54 pm
avalon says:
Just pay with the extension then.
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13th April 2012 at 1:59 pm
avalon says:
Life it too short to waste a beautiful day on doing taxes when you could be cutting the grass instead!
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13th April 2012 at 2:01 pm
Administrator says:
You don’t know how much you owe until you do the tax return. Maybe I can sit on the patio drinking beer while you do the tax return.
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13th April 2012 at 2:06 pm
avalon says:
Dont you just make an estimate then get it back if you overpaid? I’ll send the estimate
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13th April 2012 at 2:07 pm
avalon says:
Did you thumb me down???
Hot debate. What do you think?
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13th April 2012 at 2:08 pm
AWD says:
I’m keeping my guns somewhere else around tax season, so as not to use them on myself, as the depression worsens when I realize how insane our tax system is, how insane our government is, and how insane it makes me. After Federal and state tax season, there is property tax season, where I give them 1/20 of the value of my home so they can hire 5 bum relatives to have government jobs and sit on their fat asses all day, and so the “civil servants” can drive brand new cars every year and retire at 50. I saw a brand new Ford Expedition yesterday with government plates on it. They are living the high life, believe me.
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13th April 2012 at 2:14 pm
AWD says:
Government employees, BTW, don’t pay their taxes:
Our Government Employees Skip Paying Taxes
http://townhall.com/columnists/brucebialosky/2012/02/06/our_government_employees_skip_paying_taxes/page/full/
Why Pay Taxes If Government Employees Don’t?
http://www.financialsamurai.com/2010/09/12/obama-aides-dont-pay-back-taxes-geithner-cheats/
Federal employees who don’t pay their taxes should be fired
http://dailycaller.com/2011/03/08/federal-employees-who-dont-pay-their-taxes-should-be-fired/#ixzz1rwhQ08XR
Hundreds of Capitol Hill Staffers Didn’t Pay Taxes in 2010
http://www.foxnews.com/politics/2012/01/24/hundreds-capitol-hill-staffers-didnt-pay-taxes-in-2010/#ixzz1rwhaa9Zl
Federal workers owe billions in back taxes
http://money.msn.com/tax-tips/post.aspx?post=ab789642-9f66-414f-8683-8dbc20504dc0
They can get away with not paying their taxes, but if WE don’t, we go to prison. Where’s my pitchfork?
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13th April 2012 at 2:20 pm
TeresaE says:
Ah taxes, the love of my winter and spring life.
I NEVER file my returns on time. NEVER.
I ALWAYS file my estimate, extension and the like.
Why?
Because historically, and procedurally, the IRS conducts the bulk of their audits via “chance.” In essence they take all the returns filed and kick out lists of social security/tax id numbers and set their auditors up with those lists, or do the mail audit. Only if your return kicks up known “red flags” will your actual info get you audited.
If you file an extension and keep your return out of their grubby little hands until later in the summer, the audit slots are – by and large – full.
I don’t dread an audit because of what they might find because I know we are clean. I dread an audit because with a small business it means an IRS agent IN your business for days/weeks watching the way you do business, the money they see, the billing, calls, faxes, emails they notice AND the IRS employee is paid hourly to FIND things they can nail you for.
Screw that. (When I ran the small accounting office, we had a supply closet that was the size of a small office, with no heat and a lightbulb hanging from the ceiling. In the name of “protecting our unaudited clients’ privacy) we would demand that is where the auditor work from. Amazingly, they completed their audits FAST, much faster than when you make the employee comfortable.
Guesstimate it, add a buffer, file the extension and then do the taxes but hold off as long as you can to actually file them.
My hub’s accountant disagrees, but my first accounting boss is the guy that came up with the system (really observation) and 20 years later it seems to still be true.
I’m sure with 16k new auditors being hired thanks to the Stimulus bill and Obamacare, that will change soon.
Ponzi on.
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13th April 2012 at 2:23 pm
AWD says:
Government employees don’t have to pay taxes, but we do, or we go to prison.
Federal workers owe billions in back taxes
http://money.msn.com/tax-tips/post.aspx?post=ab789642-9f66-414f-8683-8dbc20504dc0
41 Obama White House aides owe the IRS $831,000 in back taxes — and they’re not alone
http://latimesblogs.latimes.com/washington/2010/09/congress-taxes-irs.html
Hundreds of Capitol Hill Staffers Didn’t Pay Taxes in 2010
http://www.foxnews.com/politics/2012/01/24/hundreds-capitol-hill-staffers-didnt-pay-taxes-in-2010/#ixzz1rwjJxC4c
Federal employees who don’t pay their taxes should be fired
http://dailycaller.com/2011/03/08/federal-employees-who-dont-pay-their-taxes-should-be-fired/#ixzz1rwjTVWhA
Why Pay Taxes If Government Employees Don’t?
http://www.financialsamurai.com/2010/09/12/obama-aides-dont-pay-back-taxes-geithner-cheats/
Our Government Employees Skip Paying Taxes
http://townhall.com/columnists/brucebialosky/2012/02/06/our_government_employees_skip_paying_taxes/page/full/
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13th April 2012 at 2:27 pm
AWD says:
Shit, sorry about the double post…
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13th April 2012 at 2:28 pm
Administrator says:
I did thumb you down. How do you think you make an estimate? Jeez. Should I send $100, $1,000, or $10,000 with the extension? Should we flip a coin?
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13th April 2012 at 2:29 pm
AWD says:
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13th April 2012 at 2:32 pm
avalon says:
Just look at what we paid last year and add a bit more?
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13th April 2012 at 2:44 pm
ASIG says:
If all the above doesn’t piss you off, this video will!!!!
http://abcnews.go.com/WNT/video/us-bridges-roads-built-chinese-firms-14594513?tab=9482931§ion=4765066&playlist=14594944
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13th April 2012 at 2:48 pm
Administrator says:
I think I’ll hand over the reigns of our finances and taxes to you. It sounds so easy when you explain it that way.
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13th April 2012 at 2:58 pm
AWD says:
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13th April 2012 at 3:23 pm
DaveL says:
“10 – When the U.S. government first implemented a personal income tax back in 1913, the vast majority of the population paid a rate of just 1 percent, and the highest marginal tax rate was just 7 percent.”
Soething wicked this way came.
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13th April 2012 at 4:30 pm
DaveL says:
edit…something
13 – According to Forbes, the 400 highest earning Americans pay an average federal income tax rate of just 18 percent.
14 – Warren Buffett had an effective tax rate of just 17.4 percent for 2010.
15 – The top 20 percent of all income earners in the United States pay approximately 86 percent of all federal income taxes.
Soooo……did they pay their “FAIR SHARE” or not? Did the top 20% get 86% of the BOOSH tax cuts?
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13th April 2012 at 4:34 pm
SSS says:
Avalon
Are you going to let that mangy cur Admin talk to you that way? I certainly wouldn’t. Time to fill up the gas tank in the lawn mower and make him do something useful this weekend.
Admin
Are you to let your sweetie Avalon talk to you that way? I certainly wouldn’t. Time to man up and put a six-pack in the cooler and set it next to your lounge chair on the patio for this weekend. Don’t forget the sun tan lotion.
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13th April 2012 at 5:41 pm
Muck About says:
When I quit RCA in 1979 after 20 years and one too many hose jobs and went to Idaho an homesteaded 10 acres, I didn’t even file a tax return for 3 years. Did I have income. Shit, I don’t remember. Did I build a 2400 Ft sq. passive solar home and drill a 300 foot well by hand? Sure did. Bought all the lumber when I purchased the last 10 years before.. Got a VE mill to cut up my red fir on a contract, stacked and dried it and built the house out of it except for the Canadian aromatic cedar that was the interior wall covering.
I had figured out by 1961 that there were three ways to avoid paying income tax.
1. Have no income. That tends to be binding at times as the grocery bill and medical expenses still have to be covered.
2. Work in the cash market. Back in the early 60′s that was a snap. Of course I never did it.
3. Work overseas. It is true that the IRS will tax all income from where ever you earn it but at the time (1961-1978, 1982-present) there is a husky exemption of foreign generated income that allows you to file your taxes and not pay shit. So that’s what I did for 35 years of my working life.
I worked all over the world, little islands in the sun, tops of dormant volcanos, middle of deserts and all of them (with a few short term exceptions) were on other countries possessions.
When they killed the foreign exception in 1978, Johns Hopkins wanted me to work in Scotland for them. Bad.. So I wrote my own contract, and wrote it so that every 6 months, the exchange rate between the dollar and the pound (at the time the dollar was dropping versus the pound daily) was computed and I got a bonus to cover the loss since the last evaluation and a raise for the next one. By way of daily per diem —- which, under IRS rules was still tax exempt! So I made up for paying taxes on a very small base salary and got a huge ($250/day) per diem that adjusted upward every 6 months. Maybe it was every quarter (3 months) I don’t remember.
At any rate, they furnished me a vehicle, paid me per diem of vast proportions, gave me a tax exempt housing allowance to live on the economy and none of it was taxable. Being a Tech Rep for Johns Hopkins was FUN!!
So there are ways if you just figure them out and stick it to them with their own rules.
MA
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13th April 2012 at 5:58 pm
DaveL says:
I file an honest return and they send me back more than I deserve. I send the extra back and they give it back to me again. I send it back a third time. They send it back again and tell me to keep it. Fuckem!
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13th April 2012 at 7:39 pm
Novista says:
Muck
re your 3. I guess it depends — basically I think the fuckers pull ‘rules’ out of the air. Back in 1969, when I signed a contract to go to Saudi Arabia, there was also an IRS form, forget the number, an exemption on what was informally called “the 510 day rule”. That being, 18 months (minus one for holiday) and all foreign income was covered.
Well, after a three-day sojourn in Beirut to get our work visas, we arrive in Riyadh to the first lie. As our contract was for the Dhahran station, “Didn’t the head office mention that the Saudi Government won’t accept the facility because it doesn’t meet specifications?” No.
And, then the second lie. “Didn’t they tell you that you are required to pay Saudi income tax ov 7%?” No. I only found out later how big the lie was — there was a corporate tax, and with two sets of books, they shoved it on to the employes.
The other cute arbitrage was, they held the high cards for negotiating a second year’s contract. So, if you say no and they send you home (as per contract, their ticketing) you owe the IRS — unless you happened to find other employment or have an extended holiday on some Mediterranean beach. And you sign up again. the only thing they didn’t have was a company store …
Two years later, I’m back stateside and almost a year after that, get a call from an IRS thug about my 1969-1970 tax. “Come to my office tomorrow morning with your checkbook.”
I guess I was a bit abrupt with him. When I went in the next morning, he had called in sick. There was a substitute at his desk. Yeah, she wondered where my checkbook was. I pointed out that I had received a letter from IRS Washington months before and replied politely to that — so where is my file? She didn’t know and it doesn’t matter, you owe and that is that. Further, “You are an American and you had income, no matter where,.”
She didn’t get a check. Nothing more heard until I was in \American Samoa, still chasing that elusive old assertion. One more letter, not polite — and I did get a reply, they called it a draw. Heh.
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13th April 2012 at 10:50 pm
Tampa Gold says:
25. When will the sheeple wake up and realize that the grubbymint can print money at will which means income taxes are irrelevant.
Since that is the case, what exactly is the tax code all about?
CONTROL.
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13th April 2012 at 1:18 pm