I hope that your experience with income taxes will be more pleasant than mine this year. If you are one of those people who don't pay income taxes or gets back more than you pay into the system, just stop reading now. For those who work their tails off all year long, follow the rules, and pay more than their fair share of taxes, continue to paragraph two.
If you itemize your deductions as we do, the federal government would not even accept tax returns until Monday because of the need to retool their software. This was caused by lame duck session, end of the year tax legislation changes. The Internal Revenue Service could not keep up with the tax code changes in order to start accepting tax returns.
The State of North Carolina took our return on time, no problem. Or so I thought, anyway. I saw a reminder about how I can check the status of my return on the State Department of Revenue web site. I figured I would make use of that service this morning, since no refund had made its way to my checking account yet. Upon entering my identifying information, I got a message that said, "Please call [their phone number] about your refund amount." My first thought was that there was some attachment to my refund for some unknown past bill with the state. That has happened to myself and to others before.
I called the state IRS and spent some twenty minutes on hold only to be told that my return was still being processed and that I should expect it to take 45 days to process my return. OK, let me get this straight. The State of North Carolina is so technologically retarded that they can not put up a simple web page message that my return is still being processed, even though I know it was received. Then I wasted all that time on hold just to find out that information that could have been told to me in an instant over the internet.
What floored me was that the state is telling me that it will take a month and a half to process my tax return. I prepared my returns on my computer. I paid for the software and state e-filing fee so that the process could be faster and smoother. I even signed up for direct deposit so that the process could go even faster still. If it is going to take 45 days to process an electronic form that can be done instantly by their computer system, then why did we bother with the extra expense of filing electronically? We could have printed out the forms and mailed them for the cost of a postage stamp if it was going to take six weeks to process.
I am none too impressed with electronic transactions lately. When I send a payment through PayPal or other electronic service, the transaction is handled relatively instantaneously. When I pay bills through my bank's web site, sometimes it is rapid, sometimes not so much. Obviously the state Department of Revenue is in the "not so much" category.
The real slap in the face is that my refund is going to be somewhere around $1800 or more. That means that I am going to have to pay tax on that money yet again next year. The State of North Carolina hoses anyone who gets a tax refund by making us claim that refund as income the following year. This is money that was already taxed once. The money is a refund of an overpayment of taxes, not income. When that overpayment is returned to me, I am forced to count it as income yet again. That is just plain unethical.
I have more money withdrawn from my paycheck than needs to be. This is not so much so I will get a refund, since I don't enjoy lending the government my money, interest free. Rather I do that so that I don't have any surprises once a year and have to pay them. It is a personal choice. Still, that should not be counted as income twice. The state is not going to repay my money with interest. However, if I am late with a payment to them, they will charge not only interest but late penalties as well.
The government that can't process a computer transaction in a timely fashion is the same state government that is several billion dollars behind in its budget, has billions of dollars in fraud and waste, and double charges us on either tax over payments or underpayments. The state government wants to trust them with more projects, education, and our hard earned money WHY?
Showing posts with label income tax. Show all posts
Showing posts with label income tax. Show all posts
Wednesday, February 16, 2011
Friday, February 19, 2010
Column for Feb. 18, 2010
I found that on occasion spend money like a drunken sailor on shore leave. I have been doing so since Friday. I guess that it is my part to continue a stimulus package for the local economy.
Actually, I just got my federal tax refund. It is the biggest refund I have ever gotten. With some deductions that have come my way this year and others I have just not taken advantage of, I did well on tax year 2009.
A few things strike me again this year as they do every year. With our current taxation system, we often lose sight of just how much we actually do pay in taxes. I started keeping tally of all the small taxes I pay such as property taxes, vehicle registration, and even some sales taxes. Doggone that adds up. I paid the most I have ever paid in federal and state income taxes this past year. I guess that is a good problem to have since it means I made more money than I ever have before. That is a good thing since my wife has been out of work for a year now.
I guarantee that if we had to cut a monthly check for our individual shares of taxes rather than have some form of payroll deduction, we would tar and feather some revenue agents in this country as was done in the 1700's.
I am glad that I was able to get as much back this year as I did. It is enabling me to get a few home improvements done, do some increased giving, cover some unexpected medical expenses, do more grocery and baby supply shopping, replace a bedding set, and even purchase some personal wants. I would trade that all in for a more fair tax system, though.
Tax refunds are just that, a refund of an overpayment of taxes. We eagerly await them every year, although we have just lent that money to the government interest free. If it was the other way around, I guarantee that we would be subject to penalties and interest. Ask me how I know.
I would prefer a tax system that is based upon consumption rather than income levels. That way, all people pay the same rate just as we do with the state sales tax. Everybody pays the same rates and pays more if they spend more. Spending money is a voluntary act and that means that you have control over the amount of taxes you actually pay.
If I could actually get my entire paycheck every two weeks under an alternative tax system rather than have taxes siphoned off and I get a net check, I would love it. If only there was a different system out there. Wait a minute…there is! It is called The Fair Tax and you can find out more on the internet at www.fairtax.org. Under that tax system, we would pay in effect a national sales tax rather than a national income tax. The price of goods would not go up since current prices have built into them the inherent cost of business income taxes. When the income tax is non-existent, there is no need to increase the cost of goods to cover the cost of taxation. An alternative embedded sales tax within the price of a product would be about the same we pay now.
One thing about the Fair Tax is that it is much closer to the original concept of taxation as laid out by the Founding Fathers. There was a great amount of hatred towards the idea of direct taxation during the Constitutional Convention of 1787. Under the Articles of Confederation, the national government was limited to taxing the states for the cost of running the government. It was up to each state to dole out their fair share of revenue to the national treasury. By so doing, states could punish or manipulate the national government by withholding their share of the burden.
During The Philadelphia Convention, imposts and duties on imports and exports were heavily discussed. Essentially, duties on imports amount to a tax on the consumption of goods. The Fair Tax is very close to that same concept. Therefore I find it to be much closer to the core of American values.
Any tax code in which behavior can be influenced, encouraged, or punished is inherently unjust and fully open to corruption. Any system that taxes some people at a higher rate than others and some even pay no taxes at all is just plain immoral. The Fair Tax for the most part eliminates these concerns. There are a few provisions in the Fair Tax I would like to see changed, but it seems to be the most perfect form of taxation out there. I would much rather pay taxes under it, even if I did get a huge tax refund this year.
Actually, I just got my federal tax refund. It is the biggest refund I have ever gotten. With some deductions that have come my way this year and others I have just not taken advantage of, I did well on tax year 2009.
A few things strike me again this year as they do every year. With our current taxation system, we often lose sight of just how much we actually do pay in taxes. I started keeping tally of all the small taxes I pay such as property taxes, vehicle registration, and even some sales taxes. Doggone that adds up. I paid the most I have ever paid in federal and state income taxes this past year. I guess that is a good problem to have since it means I made more money than I ever have before. That is a good thing since my wife has been out of work for a year now.
I guarantee that if we had to cut a monthly check for our individual shares of taxes rather than have some form of payroll deduction, we would tar and feather some revenue agents in this country as was done in the 1700's.
I am glad that I was able to get as much back this year as I did. It is enabling me to get a few home improvements done, do some increased giving, cover some unexpected medical expenses, do more grocery and baby supply shopping, replace a bedding set, and even purchase some personal wants. I would trade that all in for a more fair tax system, though.
Tax refunds are just that, a refund of an overpayment of taxes. We eagerly await them every year, although we have just lent that money to the government interest free. If it was the other way around, I guarantee that we would be subject to penalties and interest. Ask me how I know.
I would prefer a tax system that is based upon consumption rather than income levels. That way, all people pay the same rate just as we do with the state sales tax. Everybody pays the same rates and pays more if they spend more. Spending money is a voluntary act and that means that you have control over the amount of taxes you actually pay.
If I could actually get my entire paycheck every two weeks under an alternative tax system rather than have taxes siphoned off and I get a net check, I would love it. If only there was a different system out there. Wait a minute…there is! It is called The Fair Tax and you can find out more on the internet at www.fairtax.org. Under that tax system, we would pay in effect a national sales tax rather than a national income tax. The price of goods would not go up since current prices have built into them the inherent cost of business income taxes. When the income tax is non-existent, there is no need to increase the cost of goods to cover the cost of taxation. An alternative embedded sales tax within the price of a product would be about the same we pay now.
One thing about the Fair Tax is that it is much closer to the original concept of taxation as laid out by the Founding Fathers. There was a great amount of hatred towards the idea of direct taxation during the Constitutional Convention of 1787. Under the Articles of Confederation, the national government was limited to taxing the states for the cost of running the government. It was up to each state to dole out their fair share of revenue to the national treasury. By so doing, states could punish or manipulate the national government by withholding their share of the burden.
During The Philadelphia Convention, imposts and duties on imports and exports were heavily discussed. Essentially, duties on imports amount to a tax on the consumption of goods. The Fair Tax is very close to that same concept. Therefore I find it to be much closer to the core of American values.
Any tax code in which behavior can be influenced, encouraged, or punished is inherently unjust and fully open to corruption. Any system that taxes some people at a higher rate than others and some even pay no taxes at all is just plain immoral. The Fair Tax for the most part eliminates these concerns. There are a few provisions in the Fair Tax I would like to see changed, but it seems to be the most perfect form of taxation out there. I would much rather pay taxes under it, even if I did get a huge tax refund this year.
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