Tuesday, April 23, 2013

TAX 101: Poland Students Ask Why Parents are so Grumpy in April


If You Pay Taxes, You Have an Opinion That Matters
By Kylie Martin
Children eventually reach the age at which they began to perceive, on a  deeper level, the world around them. As they progress through school and became more exposed to the media, they notice people’s views on various issues: education, the economy, politicians, religion.  Constantly, they hear debates regarding questions such as: Should gay marriage be legal? Is Obama’s health care program sufficient? Who can be blamed for the recession? Is abortion justified? What are the ethics of capital punishment?  These debates shape how the children live. They shape their development into adults who offer political, social, and religious opinions – which become policies and law.

A controversy kids hear about as they mature is the American taxation system. Internet websites, such as brighthub.com,  try to explain the complexity of taxes. There are income taxes (paid by anyone who earns an income), property taxes (paid by anyone who owns property such as land, a home, or commercial real estate), consumptive taxes (taxes on sales goods or items that are subjected to being used by either an individual or business), and others... corporate, payroll, capital gains, inheritance or estate. All of these taxes serve an overarching purpose. 

Stephen Gandal offers this explanation in his article What’s the Purpose of Taxes?:
“Taxes can do a lot of things. They can pay for services. They can make life easier for future generations by either reducing the nation’s debt burden, or by building bridges and tunnels that our children will use. Taxes can transfer wealth from future generations to today by increasing the deficit. They can change behavior like in the case of cigarette taxes, soda taxes and the mortgage interest rate tax deduction.”

Karolyn Buotte of Farmington,  a Dirigo High School teacher, explains the simplicity of a sales tax, and how she is more cognizant of its existence when she makes greater purchases. “I don't really think about it until I pay for something really expensive... like recently I bought a mountain bike.” Her husband, Jim Thurston, a self-employed carpenter of Farmington, (who also shares in the business of his family’s farm), explains a property tax he manages. “We have a camp on Concord Pond... because it’s waterfront property, the property tax is $800 or $900 every year. There’s no electricity or plumbing, but the town of Woodstock sends me a bill.” 

If simplified distinctions are to be made on taxes, two opposing sides become most prominent. On one, less governmental control is wanted (or fewer taxes and aid to the poverty-stricken). The other is acceptance of government control, and supporting welfare and other social programs on a higher level. Interviewees involved in this assignment portray the more liberal perspective. 

“Some tax dollars are being wasted, but from a general standpoint I think tax dollars are well spent. We’re pretty lucky the way we live,” says Craig Martin, a chemical engineer from Poland.

Thurston’s perspective is similar. “I think it needs to happen in order to provide services, whether its in education or military or wherever else. Although I don’t always like the decisions that they make...” 

How government spends our taxes is an endless source of debate. That's how it goes in a democracy.

Buotte would like her money to go toward preserving land for state and national parks, impoverished animal shelters, and new or innovative learning opportunities in education. Martin selected welfare and health oriented programs (such as the Food and Drug Administration.). Thurston remarked after some thinking, “I would go for helping the local businesses stay competitive with larger corporations, such as Walmart, to at least give them a competitive edge. Like little stores wouldn’t be going against the Great Satan.” 

These interviews revealed one obvious trend. Each person interviewed was generally supportive of taxes in America, even though he or she disagreed with how the money is used in some areas of the government. The general opinion between Buotte, Thurston, and Martin is that taxes are a necessary part of the American system. 

As grown men and women, they will be able to answer the overarching question using lessons they developed from their childhood, thus continually shaping the country’s political landscape: Are taxes vital to living a free, American life?

Law-abiding Taxpayers and Unhappy Campers
By Everett Bertrand
“If you make any money, the government shoves you in the creek once a year with it in your pockets, and all that don't get wet you can keep. ”  – Will Rogers
Knowing that quite a few Americans agree with Will Rogers, I interviewed several local taxpayers to get some perspective.

Julie Bertrand, a resident of Minot, isn't convinced that the government uses our tax dollars wisely. She insisted that a lot of it went to welfare and “disability” systems for people who are not willing to hold up their end of the bargain and work like they’re supposed to. Being a probate clerk at the county office, she deals with situations that allow her to observe how people handle their financial affairs; she believes some people are “milking the system” all the time. In addition, she sees our tax dollars going to politicians who weren’t deserving. 

“It (the tax system) is necessary, but too much of it pays the politicians' unearned big salaries” Bertrand said. 

Skip Crosby, a teacher at Poland High School, lives in Poland. He also believes our  tax system doesn’t work very well, for slightly different reasons than Bertrand. Crosby says some people don’t pay their fair share. Tax loopholes are far too many, making it possible for the wealthy to avoid paying as much as they should. Our system is overcomplicated, according to Crosby, who is not a fan of income taxes but supports sales taxes.  One specific change that he would support would be the elimination of excise taxes.

 “It’s like buying a shirt, and every time you wear it, you have to pay taxes on it,” Crosby said. 
PRHS teacher Charlie Yancey of Hebron had some ideas that overlapped Crosby's and Bertrand's, as well as his own unique take. The system, according to Yancey, simply does not work. In fact, he says he hates our tax system. 

He argues for a graduated flat tax. He says the present system provides too much room for the wealthy to find loopholes and escape paying the amount that they should. As part of Yancey's proposed changes, we would have  a simpler system where there’s no room for such loopholes.

Warming up to the conversation, Yancey took his ideas one step further.  He says he wants no taxation whatsoever – no income or sales tax at all. 

“Charities are responsible for helping out the less fortunate, and there shouldn’t really be a government run welfare program,” Yancey insisted. He doesn’t see welfare as being a responsibility of the government, which he doesn't trust to spend our tax dollars wisely.

I actually found it a bit disturbing that all three people I interviewed believe our tax system is broken. Surely, if this was the trend in three people living in a small part of Maine, then there must be quite  a few others who see the same thing. Clearly, something needs to change. If our government is “by the people and for the people,” it needs to act that way. 

From Dave Barry to Thomas Paine: Taxes Stink
By Gabby Smith
Humorist Dave Barry had this to say about taxes:
“It's income tax time again, Americans: time to gather up those receipts, get out those tax forms, sharpen up that pencil, and stab yourself in the aorta.” 
He's not alone. Hating taxes is part of being an American.

I asked my mom,  Sue Smith, an analyst at McKesson and a resident of Mechanic Falls, what she thought about the death tax, also known as the estate tax.  
“It’s double dipping,” she said. “My mom has already paid taxes on everything thing she owns, so why do it again when she’s dead?” 

I asked her who benefits  from her tax dollars and she responded that the poor are benefitting the most because they get all the help from the government. When I asked her whether taxes should be based on the ability to pay, she said:
“If two families pay the same taxes and income but one lives a higher lifestyle, it’s not fair for the family that lives a higher lifestyle to pay less taxes than the other family.” 

I asked why are taxes so complicated. She said the government doesn’t want people to understand taxes, it just want them to pay.

I also interviewed my dad, Bob Smith of Mechanic Falls. He is a manager of marketing sales at Maine Oxy. His take on who benefits from taxes: “Special interest groups because our representatives are influenced by money instead of being influenced by the people.” He prefers so-called sin taxes on alcohol and cigarettes, rather than excessive property taxes on homeowners.

Finally, I talked to my aunt, Joan Bergeron. Her take on sin taxes: “When you spend money on cigarettes, it’s like taking the money out of your wallet and burning it, so I think it’s great to tax cigarettes.”  She believes politicians benefit more from taxes than the people who are supposed to be receiving services.

My interview subjects seemed to agree on sin taxes but not much else, although each of them are skeptical about who benefits from our taxes. This attitude goes all the way back to Thomas Paine (1737-1809), who wrote:
“If, from the more wretched parts of the old world, we look at those which are in an advanced stage of improvement, we still find the greedy hand of government thrusting itself into every corner and crevice of industry, and grasping the spoil of the multitude. Invention is continually exercised, to furnish new pretenses for revenues and taxation. It watches prosperity as its prey and permits none to escape without tribute.''

Take Time to Learn How Tax Dollars are Spent
By Katie Burgess
The IRS receives more than 140 million individual tax returns and collects over $950 billion in taxes, according to Forbes Magazine. 

Federal and state governments spend tax revenue on roads, health care, education and the military,  but taxes remain forever controversial.

My dad, Larry Burgess, a resident of Mechanic Falls and employee of TD Bank, said, “Taxes are important, but sometimes the government misuses tax dollars that could go to better uses.”
If he could change one aspect of how the government spends taxes, he would have tax cuts for certain demographics as well as “anything considered frivolous spending” to allow for increased spending on more important things. 

Burgess did not give specific examples of spending programs that could be cut. He's well informed, noting that taxes help businesses and provide funds for schools and projects, both local and statewide. When asked about education funding Burgess said,  “I would support more money spent on education, but I would also like to see improvement in how schools utilize the tax dollars they receive.” 
My mom, Julie Burgess, admitted not knowing much about taxes. 

She said, “I don’t like certain taxes, although taxes are good because they benefit the community, state and government.” She recognizes the benefits of taxes, but also realizes that there are certain taxes that aren’t a necessity and become a burden for many people. Although she doesn’t know very many specific details about taxes, her general knowledge is enough to realize that education doesn’t get enough funding. Julie believes that teachers aren’t paid enough money, but she also agreed with my dad when she said, “Tax money is not always spent wisely.” 

I interviewed my Roundtable advisor, Mss. Fryda, who teaches history and humanities. She knows a lot about taxes and has many opinions on the topic. In general, Ms. Fryda is satisfied with how tax dollars are spent, because she notices good roads, bridges and schools in my town. However, she wishes more state taxes were spent on public education.

When asked if she supports or opposes tax cuts she said, “I oppose tax cuts. What I would like is a re-prioritization of the tax money that is already being paid.” Similar to Larry Burgess, Ms. Fryda said taxes shouldn’t be used on insignificant things. Subsidies for industries that are doing just fine (such as oil and agriculture), Ms. Fryda argues, shouldn’t be receiving tax dollars or tax breaks. Ms. Fryda also believes that the current defense budget is way out of proportion and that tax revenue could be used elsewhere.

I've learned that  many people don’t understand the positive or negative impacts of taxes, but if they had a deeper knowledge they would be able to formulate an opinion regarding how their tax dollars are spent by government. Well informed citizens are becoming more scarce. Taxes will always be part of our society, so it's up to the taxpayers to educate themselves and speak up.






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