March 15th arrives this week, and with it, the filing date for most 2005 corporate income tax returns. For other than a bunch of frantic CPAs and a few addled CFOs this milestone date will pass as just another day in the week.
Ever wonder why corporations get a month less to file their income tax returns than individuals? Probably not. In fact, I’d wager that most readers don’t know and don’t care about anything relating to corporate income tax. Incidentally, I have no idea why corporations are shorted a month. That’s just the way things are.
However, with the passing of March 15th the frenzy to file personal income tax returns will be begin in earnest. Now, we’re talking about something important.
Many of you have already dutifully accumulated your receipts, W-2 forms, etc., and turned the pile over to your accountant. Many, however, have discovered extensions and haven’t given their tax return a second thought yet. I suspect that the former group is likely expecting a refund while the latter bunch will owe more taxes. Nevertheless, the annual tax chore has to be done and now is a good time to start thinking about it.
W-2 forms are the brilliantly effective tools of our bureaucracy. Through tax withholding the government quietly collects the bulk of its tax revenue without our paying much attention to it. Come on now, admit it. When you think of your salary, you’re thinking of take-home pay. You’re mostly oblivious to the amount of tax withheld. And if you get a tax refund, most folks never give taxes another thought. We are like sheep quietly being led to the slaughter.
I have long believed that citizens would be more engaged in government matters if there were no withholdings and everybody just paid their taxes with their return. Government agrees with me. The last thing they want is for you to be thinking about how much of this boondoggle project or that failed social program is coming out of your pocket. Just remember that all government revenue comes from you.
Add it up
I challenge you to calculate how much you pay in income tax, write it on a sticky note and post it on your desk. While you’re at it, add up your property tax and put that number along side the income tax number. Then, for an MBA in tax awareness, calculate how much you spend each year on items subject to sales tax and put that number down with the others. Add in gasoline, tobacco and alcohol tax just for laughs. Now you’re ready to do the dirty deed and compute the percentage of your income that goes to taxes.
Angry, aren’t you. Well, how angry are you?
It doesn’t have to be this way. We elect the people who spend our money and they are subject to our control. However, since most people are generally disengaged about how their government operates, politicians and bureaucrats pretty much spend as they please. To confirm my hypothesis just check the voter turnout records for the past few elections. We’re getting the government we deserve.
We elected George Bush, both the younger and the elder, under the auspices of social and fiscal conservatism. They have likely satisfied us on the first premise, but failed miserably on the fiscal side. Neither President Bush is much of a budget manager.
In fact, the federal budget hasn’t been balanced since Bill Clinton left office. Now, there’s an uncomfortable slice of reality!
An obvious choice
Our federal budget deficit is huge and growing daily. If we’re going to fight a war we need to cut back somewhere else. Not since the days of Lyndon Johnson have we followed the path of trying to provide both guns and butter. In both cases, government hoped that people wouldn’t notice we were at war if their pork barrel programs continue to rock along. To catch a glimpse of the future just recall the inflation of the 1970s.
Oh well, enough ranting for one column. Likely, no one is listening anyway. Let’s just gather our receipts and trot on down to the CPA’s office for the annual shearing. Getting involved in government and actually working to limit the size of government takes time and time is one commodity we don’t have. The Reverend Billy Graham recently said that the more time-saving conveniences we develop, the less time we have. Now, as my mother would say, put that in your pipe and smoke it.
Thought for the Moment
In the long run, we shape our lives, and we shape ourselves. The process never ends until we die. And the choices we make are ultimately our own responsibility. — Eleanor Roosevelt (1884-1962)
Joe D. Jones, CPA (retired), is publisher of the Mississippi Business Journal. Contact him at firstname.lastname@example.org.