Taxes and Timing
 

This might belong in some other thread but I would really like to get the forums opinion on this.

I am of the opinion that the majority of US citizens are unaware of the amount they give to government every year. I mean, I think people have a general idea (too much!), but when it comes down to it they dont really know and dont really care.

I think the problem lies in how taxes are collected. By being directly siphoned out of paychecks, or tacked on to buying this or that, taxes become this unavoidable cost of life. You never even see 25+% of your paycheck every two weeks. It is easy to not miss what you never had.

What kind of uprising would we see against government spending and taxation if every citizen had to write a check at the end of every month or year for the same amount that is right now just taken from them?

I would predict a much different political landscape than the one we have now.

Re: Taxes and Timing
 

I tend to agree, especially on all forms of a sales tax. From gasoline, beer, cigarettes, to any standard retail purchase, most people probably don't know or pay attention to how much they pay in taxes. I actually have no idea, because I have never kept track. It would be an interesting 2+2 class project: Keep track of all the sales tax paid in a given month. For smokers and drinkers, this number has to be large.

Re: Taxes and Timing
 

There is no way a 35% income tax could be collected on people at the end of each tax year. People don't have the restraint to hold on to that kind of money. Poker players are one of the few professions that have to deal with this and it is amazingly depressing. I think a good step towards eliminating the income tax would be to bar the IRS from taking any money towards the 2007 income tax until April 2008. Either a huge percentage of the work force is criminal or having an enormous income tax is not a good idea.

Re: Taxes and Timing
 

this is of course the case and the primary reason for withholding rather than having everyone pay a bill at the end of the year.
Congress understood very well the point you just made. Withholding and other semi hidden forms of taxation are intentionally done in that manner. Once the sheep becomes aware that he is being sheered he tries to run.

Re: Taxes and Timing
 

Monthly would probably work fine. Most people manage to pay their rent/mortgage just fine. Yearly would definitely create a crisis, because no one would have the cash to pay.

Re: Taxes and Timing
 

Right. That would be the whole point. All the people who want the govt to provide health care and ponies for children or whatever would have to step back and say "damn, this costs a ton of money. Maybe it would be better if I kept it and took care of myself." Instead of blindly forking it over.

Re: Taxes and Timing
 

[ QUOTE ]
Right. That would be the whole point. All the people who want the govt to provide health care and ponies for children or whatever would have to step back and say "damn, this costs a ton of money. Maybe it would be better if I kept it and took care of myself." Instead of blindly forking it over.

[/ QUOTE ]

You're such an optimist. I would guess the reaction would be more along the lines of "Damn, this costs a ton of money. Why aren't they taking more from rich people, I can't afford this!"

Re: Taxes and Timing
 

You're right about one thing, there are a lot of people who don't think they pay taxes because they get a refund.

However, people who don't have taxes withheld are usually required to file estimated taxes quarterly. If withholding were to be eliminated, that's likely how everyone would have to file.

At least that would focus everyone on how much they were actually paying, as well as place a resource drain on the feds.

Re: Taxes and Timing
 

do ppl really not know how much they pay in taxes? i mean if theyre on an annual salary and and its say 75k a year, dont they notice when they only get paid 55k?

Re: Taxes and Timing
 

[ QUOTE ]
do ppl really not know how much they pay in taxes? i mean if theyre on an annual salary and and its say 75k a year, dont they notice when they only get paid 55k?

[/ QUOTE ]

The notice that they get paid 55k, they don't think about what they could have done with the other 20k because they're conditioned to consider it as not their money. To them, it's the same as the company saying "We're paying you $55,000 to do the work and giving $20,000 to someone else".

Re: Taxes and Timing
 

[ QUOTE ]
[ QUOTE ]
do ppl really not know how much they pay in taxes? i mean if theyre on an annual salary and and its say 75k a year, dont they notice when they only get paid 55k?

[/ QUOTE ]

The notice that they get paid 55k, they don't think about what they could have done with the other 20k because they're conditioned to consider it as not their money. To them, it's the same as the company saying "We're paying you $55,000 to do the work and giving $20,000 to someone else".

[/ QUOTE ]

You can fill out a form to have no taxes withheld if you're a W-2 wage earner. I've heard it will take about 6 weeks for the IRS to come around and start asking question though.

Re: Taxes and Timing
 

[ QUOTE ]
[ QUOTE ]
Right. That would be the whole point. All the people who want the govt to provide health care and ponies for children or whatever would have to step back and say "damn, this costs a ton of money. Maybe it would be better if I kept it and took care of myself." Instead of blindly forking it over.

[/ QUOTE ]

You're such an optimist. I would guess the reaction would be more along the lines of "Damn, this costs a ton of money. Why aren't they taking more from rich people, I can't afford this!"

[/ QUOTE ]

Probably true. But what I keep preaching to people that will listen is that knowledge is power. If you could see in real dollars what government services cost you by writing that check for it I think people would really start to think twice about wanting and supporting big government.

Re: Taxes and Timing
 

[ QUOTE ]
[ QUOTE ]
do ppl really not know how much they pay in taxes? i mean if theyre on an annual salary and and its say 75k a year, dont they notice when they only get paid 55k?

[/ QUOTE ]

The notice that they get paid 55k, they don't think about what they could have done with the other 20k because they're conditioned to consider it as not their money. To them, it's the same as the company saying "We're paying you $55,000 to do the work and giving $20,000 to someone else".

[/ QUOTE ]

QFT.

Having to write a check at the end of the year for 20K would sure as hell be a lot more painful than having it taken out little bit by little bit.

Re: Taxes and Timing
 

I don't think this is a serious problem. The majority of people in the United States disdain taxation and think that taxation is too high. The problem is that the majority also support government programs. In fact, surveys have consistently shown that, when asked on a program by program basis, most people favor more government programs than are currently provided and more funding for the majority of current gov't programs.

And, of course, in order to provide the programs, gov't must either tax or go into debt (which people also tend to oppose). So the problem is that the majority want the impossible: less taxation, and more government spending. The reality in the U.S. reflects a 'reality-based' compromise between the two desires of the majority that are impossible to achieve simultaneously.

Re: Taxes and Timing
 

[ QUOTE ]
[ QUOTE ]
[ QUOTE ]
do ppl really not know how much they pay in taxes? i mean if theyre on an annual salary and and its say 75k a year, dont they notice when they only get paid 55k?

[/ QUOTE ]

The notice that they get paid 55k, they don't think about what they could have done with the other 20k because they're conditioned to consider it as not their money. To them, it's the same as the company saying "We're paying you $55,000 to do the work and giving $20,000 to someone else".

[/ QUOTE ]

QFT.

Having to write a check at the end of the year for 20K would sure as hell be a lot more painful than having it taken out little bit by little bit.

[/ QUOTE ]

haha try being a poker player. i had to write a check for $85,000 last year. i really wanna know where it went. to bomb iraq? to feed laquisha and her 5 kids? surgery to remove a bullet from rodrigo?

Re: Taxes and Timing
 

[ QUOTE ]
haha try being a poker player. i had to write a check for $85,000 last year. i really wanna know where it went. to bomb iraq? to feed laquisha and her 5 kids? surgery to remove a bullet from rodrigo?

[/ QUOTE ]

will you teach me how to play poker?

Re: Taxes and Timing
 

[ QUOTE ]
[ QUOTE ]
[ QUOTE ]
do ppl really not know how much they pay in taxes? i mean if theyre on an annual salary and and its say 75k a year, dont they notice when they only get paid 55k?

[/ QUOTE ]

The notice that they get paid 55k, they don't think about what they could have done with the other 20k because they're conditioned to consider it as not their money. To them, it's the same as the company saying "We're paying you $55,000 to do the work and giving $20,000 to someone else".

[/ QUOTE ]

You can fill out a form to have no taxes withheld if you're a W-2 wage earner. I've heard it will take about 6 weeks for the IRS to come around and start asking question though.

[/ QUOTE ]

Would this also increase the chances of an audit? I don't mind some questions if that's all it is.

Re: Taxes and Timing
 

[ QUOTE ]
I don't think this is a serious problem. The majority of people in the United States disdain taxation and think that taxation is too high. The problem is that the majority also support government programs. In fact, surveys have consistently shown that, when asked on a program by program basis, most people favor more government programs than are currently provided and more funding for the majority of current gov't programs.

And, of course, in order to provide the programs, gov't must either tax or go into debt (which people also tend to oppose). So the problem is that the majority want the impossible: less taxation, and more government spending. The reality in the U.S. reflects a 'reality-based' compromise between the two desires of the majority that are impossible to achieve simultaneously.

[/ QUOTE ]

Sure, they think it's neat that we have a department of education. What this "support" doesn't evaluate is whether it's worth $X of their paycheck to them. They don't have this information - I suppose you could calculate it, but the average taxpayer doesn't know how much $ comes from him to support certain programs.

In terms of taxpayer awareness, which I think is what the OP is getting at, something I would love to see is an actual annual Federal itemizing of your $ contribution to various government programs. When people actually see how much money they personally contributed to something they marginally value, maybe we'd get a little more activism.

Re: Taxes and Timing
 

[ QUOTE ]
[ QUOTE ]
haha try being a poker player. i had to write a check for $85,000 last year. i really wanna know where it went. to bomb iraq? to feed laquisha and her 5 kids? surgery to remove a bullet from rodrigo?

[/ QUOTE ]

will you teach me how to play poker?

[/ QUOTE ]

ha, this year hasn't been as good as last year. i play a lot less though.

Re: Taxes and Timing
 

[ QUOTE ]
[ QUOTE ]
I don't think this is a serious problem. The majority of people in the United States disdain taxation and think that taxation is too high. The problem is that the majority also support government programs. In fact, surveys have consistently shown that, when asked on a program by program basis, most people favor more government programs than are currently provided and more funding for the majority of current gov't programs.

And, of course, in order to provide the programs, gov't must either tax or go into debt (which people also tend to oppose). So the problem is that the majority want the impossible: less taxation, and more government spending. The reality in the U.S. reflects a 'reality-based' compromise between the two desires of the majority that are impossible to achieve simultaneously.

[/ QUOTE ]

Sure, they think it's neat that we have a department of education. What this "support" doesn't evaluate is whether it's worth $X of their paycheck to them. They don't have this information - I suppose you could calculate it, but the average taxpayer doesn't know how much $ comes from him to support certain programs.

In terms of taxpayer awareness, which I think is what the OP is getting at, something I would love to see is an actual annual Federal itemizing of your $ contribution to various government programs. When people actually see how much money they personally contributed to something they marginally value, maybe we'd get a little more activism.

[/ QUOTE ]

That is exactly what I am getting at. I think if you asked people if they support every kid having a pony to ride they would say yes to that too. But if you ask them if they are willing to give x number of dollars a year to pay for the ponies you would see support fall dramatically.

Re: Taxes and Timing
 

[ QUOTE ]
[ QUOTE ]
[ QUOTE ]
[ QUOTE ]
do ppl really not know how much they pay in taxes? i mean if theyre on an annual salary and and its say 75k a year, dont they notice when they only get paid 55k?

[/ QUOTE ]

The notice that they get paid 55k, they don't think about what they could have done with the other 20k because they're conditioned to consider it as not their money. To them, it's the same as the company saying "We're paying you $55,000 to do the work and giving $20,000 to someone else".

[/ QUOTE ]

QFT.

Having to write a check at the end of the year for 20K would sure as hell be a lot more painful than having it taken out little bit by little bit.

[/ QUOTE ]

haha try being a poker player. i had to write a check for $85,000 last year. i really wanna know where it went. to bomb iraq? to feed laquisha and her 5 kids? surgery to remove a bullet from rodrigo?

[/ QUOTE ]

I almost wrote this in the OP but figured it went without saying. I would feel comfortable saying that the majority of people who pay taxes like you do are much more questioning of where the money goes.

Re: Taxes and Timing
 

[ QUOTE ]
In terms of taxpayer awareness, which I think is what the OP is getting at, something I would love to see is an actual annual Federal itemizing of your $ contribution to various government programs. When people actually see how much money they personally contributed to something they marginally value, maybe we'd get a little more activism.

[/ QUOTE ]

Isn't this pretty easy to do? US federal budget expenditures are quite public; most taxpayers merely need to take their W-2 and run it against this information:

http://www.gpoaccess.gov/usbudget/browse.html

I realize most taxpayers probably *don't* do this, but it would probably take less than an hour to do and require nothing more than a pencil and paper (and a cheap calculator for those who aren't inclined to calculate by hand).

Now, that would get the taxpayer a rough estimate as to where their money goes -- x% goes to the Department of Defense, y% goes to the Department of Education -- and I realize a literal program by program itemization would likely take much longer than an hour.

But I doubt it would increase activism significantly. Especially if we itemize by 'various government programs', a vast majority of Americans probably pay less than $10 (and in many cases, mere pennies) for 90%+ of 'federal government programs', with the obvious exceptions of defense spending, SS, and Medicare/Medicaid, which polling has consistently shown are pretty popular. I'm sure "defense spending" could be itemized in such a way that would assuage many voters, if the information wasn't confidential and was freely available.

Maybe it's the case that alot of Americans don't realize how much of their tax dollars go to SS and Medicare/Medicaid, but I suspect many do and have come to terms with it.

Re: Taxes and Timing
 

[ QUOTE ]
[ QUOTE ]
In terms of taxpayer awareness, which I think is what the OP is getting at, something I would love to see is an actual annual Federal itemizing of your $ contribution to various government programs. When people actually see how much money they personally contributed to something they marginally value, maybe we'd get a little more activism.

[/ QUOTE ]

Isn't this pretty easy to do? US federal budget expenditures are quite public; most taxpayers merely need to take their W-2 and run it against this information:

http://www.gpoaccess.gov/usbudget/browse.html

I realize most taxpayers probably *don't* do this, but it would probably take less than an hour to do and require nothing more than a pencil and paper (and a cheap calculator for those who aren't inclined to calculate by hand).

Now, that would get the taxpayer a rough estimate as to where their money goes -- x% goes to the Department of Defense, y% goes to the Department of Education -- and I realize a literal program by program itemization would likely take much longer than an hour.

But I doubt it would increase activism significantly. Especially if we itemize by 'various government programs', a vast majority of Americans probably pay pennies for 90%+ of 'federal government programs', with the obvious exceptions of defense spending, SS, and Medicare/Medicaid, which polling has consistently shown are pretty popular. Maybe it's the case that alot of Americans don't realize how much of their tax dollars go to SS, Medicare/Medicaid and defense, but I suspect many do and have come to terms with it.

[/ QUOTE ]

Which is why I think an itemized list would be a start, but having to actually write that check at the end of the year would create a lot more activism. Its easy to give a dollar here and there, but added up maybe it wouldn't be so easy.

Re: Taxes and Timing
 

[ QUOTE ]
[ QUOTE ]
[ QUOTE ]
In terms of taxpayer awareness, which I think is what the OP is getting at, something I would love to see is an actual annual Federal itemizing of your $ contribution to various government programs. When people actually see how much money they personally contributed to something they marginally value, maybe we'd get a little more activism.

[/ QUOTE ]

Isn't this pretty easy to do? US federal budget expenditures are quite public; most taxpayers merely need to take their W-2 and run it against this information:

http://www.gpoaccess.gov/usbudget/browse.html

I realize most taxpayers probably *don't* do this, but it would probably take less than an hour to do and require nothing more than a pencil and paper (and a cheap calculator for those who aren't inclined to calculate by hand).

Now, that would get the taxpayer a rough estimate as to where their money goes -- x% goes to the Department of Defense, y% goes to the Department of Education -- and I realize a literal program by program itemization would likely take much longer than an hour.

But I doubt it would increase activism significantly. Especially if we itemize by 'various government programs', a vast majority of Americans probably pay pennies for 90%+ of 'federal government programs', with the obvious exceptions of defense spending, SS, and Medicare/Medicaid, which polling has consistently shown are pretty popular. Maybe it's the case that alot of Americans don't realize how much of their tax dollars go to SS, Medicare/Medicaid and defense, but I suspect many do and have come to terms with it.

[/ QUOTE ]

Which is why I think an itemized list would be a start, but having to actually write that check at the end of the year would create a lot more activism. Its easy to give a dollar here and there, but added up maybe it wouldn't be so easy.

[/ QUOTE ]

Yes, I think an itemized bill at the end of each year (or quarter) would do the trick pretty nicely. (e.g. "um, NO, I do not want to pay $359 this quarter to keep our troops in Iraq, or $22 to keep our troops in South Korea...and what the heck are these other things I never even heard of here, listed at $8, $14, and $12.95...omg, it goes on, there are like 100 things I never even heard of adding up to... [img]/images/graemlins/confused.gif[/img] [img]/images/graemlins/confused.gif[/img] ...F-this, it's time to join the email/phone call campaign to tell our Congressmen they're OUT next year if they keep this crap up.")

The thing is, special interests are heard but average America usually isn't because average America hasn't generally been loud and forceful enough (except recently re. the phony illegal immigration bill)...BUT...if Americans got bills like this instead of withholding, I'll bet the groundswell of sentiment to slash spending would pyramid quickly.

Re: Taxes and Timing
 

[ QUOTE ]
....um, NO, I do not want to pay $359 this quarter to keep our troops in Iraq....

[/ QUOTE ]

The war on Iraq is off budget, not part of the ongoing budget so I guess it doesn't count [img]/images/graemlins/smile.gif[/img].

Seriously IMO the data would need to be presented without the "veil" of government accounting methods.

Re: Taxes and Timing
 

[ QUOTE ]
This might belong in some other thread but I would really like to get the forums opinion on this.

I am of the opinion that the majority of US citizens are unaware of the amount they give to government every year. I mean, I think people have a general idea (too much!), but when it comes down to it they dont really know and dont really care.

I think the problem lies in how taxes are collected. By being directly siphoned out of paychecks, or tacked on to buying this or that, taxes become this unavoidable cost of life. You never even see 25+% of your paycheck every two weeks. It is easy to not miss what you never had.

What kind of uprising would we see against government spending and taxation if every citizen had to write a check at the end of every month or year for the same amount that is right now just taken from them?

I would predict a much different political landscape than the one we have now.

[/ QUOTE ]

Of course. Everyone knows that. This is why Milton Friedman said the biggest regret he had was helping the federal government develop the paycheck witholding system. Everyone knows, especially those in power who depend on it, that if we all had to write an actual check for our taxes we'd be paying a lot less of it and there'd be a lot less for Congress to squander on nonsense and then claim it solved a problem for you.

natedogg

Re: Taxes and Timing
 

[ QUOTE ]
[ QUOTE ]
haha try being a poker player. i had to write a check for $85,000 last year. i really wanna know where it went. to bomb iraq? to feed laquisha and her 5 kids? surgery to remove a bullet from rodrigo?

[/ QUOTE ]

will you teach me how to play poker?

[/ QUOTE ]

Try this site:

www.twoplustwo.com

Re: Taxes and Timing
 

[ QUOTE ]
do ppl really not know how much they pay in taxes? i mean if theyre on an annual salary and and its say 75k a year, dont they notice when they only get paid 55k?

[/ QUOTE ]

Of course they know. This entire thread is a strawman.

Re: Taxes and Timing
 

[ QUOTE ]
[ QUOTE ]
do ppl really not know how much they pay in taxes? i mean if theyre on an annual salary and and its say 75k a year, dont they notice when they only get paid 55k?

[/ QUOTE ]

Of course they know. This entire thread is a strawman.

[/ QUOTE ]

Wrong. If you asked 100 people how much they paid just in federal income tax last year - an amount that is explicitly listed on a piece of paper they signed and mailed into the government - I'd be surprised if more than 5 could tell you. Now consider all the other taxes people pay (sales, property, etc) and I'd guess that well under 1% of people could tell you within 5% how much they paid in taxes last year.

Re: Taxes and Timing
 

[ QUOTE ]
[ QUOTE ]
do ppl really not know how much they pay in taxes? i mean if theyre on an annual salary and and its say 75k a year, dont they notice when they only get paid 55k?

[/ QUOTE ]

Of course they know. This entire thread is a strawman.

[/ QUOTE ]

LOL. I would be willing to bet that a majority of people could not even tell you the names of all the different taxes that come out of their paycheck, let alone the total dollar amount.

Re: Taxes and Timing
 

[ QUOTE ]
[ QUOTE ]
[ QUOTE ]
do ppl really not know how much they pay in taxes? i mean if theyre on an annual salary and and its say 75k a year, dont they notice when they only get paid 55k?

[/ QUOTE ]

Of course they know. This entire thread is a strawman.

[/ QUOTE ]

Wrong. If you asked 100 people how much they paid just in federal income tax last year - an amount that is explicitly listed on a piece of paper they signed and mailed into the government - I'd be surprised if more than 5 could tell you. Now consider all the other taxes people pay (sales, property, etc) and I'd guess that well under 1% of people could tell you within 5% how much they paid in taxes last year.

[/ QUOTE ]

I was referring specifically to income/payroll taxes, though when you look at total taxes paid you are probably wrong also. The bulk of what you are claiming are hidden taxes are paid in the form of state/local sales taxes and people know what that rate is. For the total of all taxes to be as far off as you claim would mean incredible ignorance.

As far as income taxes, go poll the hundred people, and I guarantee that theyll know the number within a percent or two.

As a personnel professional I can tell you from first hand experience that people spend more time on completing their W-4 forms to manage their withholding than all other employee orientation matters combined, including their 401(k) contribution level. (But with the exception of 401(k) asset allocation, where a lot of time is spent in education.)

Re: Taxes and Timing
 

[ QUOTE ]
[ QUOTE ]
[ QUOTE ]
[ QUOTE ]
do ppl really not know how much they pay in taxes? i mean if theyre on an annual salary and and its say 75k a year, dont they notice when they only get paid 55k?

[/ QUOTE ]

Of course they know. This entire thread is a strawman.

[/ QUOTE ]

Wrong. If you asked 100 people how much they paid just in federal income tax last year - an amount that is explicitly listed on a piece of paper they signed and mailed into the government - I'd be surprised if more than 5 could tell you. Now consider all the other taxes people pay (sales, property, etc) and I'd guess that well under 1% of people could tell you within 5% how much they paid in taxes last year.

[/ QUOTE ]

I was referring specifically to income/payroll taxes, though when you look at total taxes paid you are probably wrong also. The bulk of what you are claiming are hidden taxes are paid in the form of state/local sales taxes and people know what that rate is. For the total of all taxes to be as far off as you claim would mean incredible ignorance.

As far as income taxes, go poll the hundred people, and I guarantee that theyll know the number within a percent or two.

As a personnel professional I can tell you from first hand experience that people spend more time on completing their W-4 forms to manage their withholding than all other employee orientation matters combined, including their 401(k) contribution level. (But with the exception of 401(k) asset allocation, where a lot of time is spent in education.)

[/ QUOTE ]

Where do you work? Selection bias city.