Taxes

Tax season brings about token media comment about our complex slash draconian tax system. Having recently completed my own, both the level of taxation and required effort to file seem quite reasonable.

At the bottom line, I paid about 11% of my total income to the federal government, plus about 6% to Ohio (income + sales tax, approximately) and 7% to local government (sales tax additions, property tax, income tax to the various cities in which we live and work). I'm ignoring social security and medicare taxes (I don't think they show up aside from disappearing from each paycheck), and some special taxes such as those paid on gasoline, booze and car registration.

So, about 25% of my PDP (personal domestic product?) pays for all of the things that government does for me: roads, schools and libraries, rule of law, national defense, funding for basic science, and regulation and insurance. In the latter, I mean regulation in the sense of providing a reasonably safe and fair platform for human interaction (say, regulating the stock market, or enforcing equal rights legislation) and insurance in the sense that if I'm hit by a hurricane I'll get some basic level of catastrophic support.

While I don't agree with some amount of government spending (e.g., killing large numbers of people or subsidising corn-syrup manufacturers and their lobbyists), I think aside from some simplification and optimization, and of course better alignment of the government's with my personal priorities, the overall level of taxation is not unreasonable for what I get.

Even my unaccounted-for contributions to medicare and social security don't worry me. We all contribute according to our means (with the wealthy contributing relatively less, which may or may not be fair), and in exchange we know that our friends and neighbors have a safety net for post-retirement income and medical care. I ignore all of the hype about SS being the same as retirement savings and think about the system in that way: we can pay for it, and know that our fellow Americans have this guarantee (and we might, or might not, have it when we get older - but that's okay), or we can scrap the system and let them fend for themselves. I'm okay with the former.

My taxes took, for sake of argument, between 6 and 10 hours of effort in total, among keeping track of my receipts and finances throughout the year, filling out the forms, and reading IRS documents to learn how to do so. That also seems very reasonable to me, to do once per year. My taxes aren't uber-complicated, but I do the full 1040, itemize deductions and deal with a handful of second-level-in-complexity situations, none of which were difficult to address with irs.gov and a bit of googling.

So, complain away, libertarians and simplified/regressive-tax fanatics, I won't join you. The system isn't broken, and while we can all field complaints of government's efficiency, on the back of the envelope the cost and benefits don't seem entirely unbalanced to me.