Happy tax day!

Posted by Jeremy Shulkin

If you haven’t sent in your tax forms yet, you have until midnight tonight to get all your checks in order (payable to the United States Treasury and the Commonwealth of Massachusetts) and postmarked.

While you wait for the feds to take money out of your bank account (or, put money back in) the White House has a calculator that breaks down how your tax money is being spent. Where’s my “thank you,” military industrial complex?

In more tax related news, Massachusetts Auditor Suzanne Bump released a report and recently testified in front of the joint committee on revenue regarding state tax breaks for businesses. Her finding: whoever wrote (and supported) those tax breaks were blowing a big ol’ raspberry while they were doing it. From her testimony:

Our tax code lacks basic accountability and transparency… Once a tax break gets passed, however, it goes into a black box and seldom, if ever, does anyone look back and determine whether it is working as intended or whether there is continued public benefit.

Taxpayers shouldn’t stand for this. There must be as much accountability and transparency in tax expenditures as in budget expenditures.

Some examples:

-Bump’s office found that 91 of the 203 “programs in the tax expenditures budget that have significant business ramifications” — better known as deductions, referrals, exemptions and breaks — are worth $2.2 billion. (The state’s budget deficit this year is somewhere around $1.9 billion.)

-Among those 91 isolated breaks for Massachusetts businesses only eight have a sunset clause. The other 83 tax breaks without any expiration are worth $2.1 billion.

-Only ten of those 93 have what’s known as a “clawback provision” — handy for recouping money if certain thresholds of the tax credit aren’t met.

-Only 19 call for any kind of public disclosure. Only 17 have “any special, identifiable oversight procedures.”

In other tax news, the Telegram ran an Associated Press article today that showed everyone’s federal income tax has declined since 1992. But wait:

The Internal Revenue Service tracks the tax returns with the 400 highest adjusted gross incomes each year. The average income on those returns in 2007, the latest year for IRS data, was nearly $345 million. Their average federal income tax rate was 17 percent, down from 26 percent in 1992.

I’m going to go ahead and wager no one from Worcester made that top 400 list. In that case, our income taxes only dropped .6 percent, from 9.9 percent to 9.3 percent. Hooray for small victories.

In fairness to the superrich, the AP also writes:

More than half of the nation’s tax revenue came from the top 10 percent of earners in 2007. More than 44 percent came from the top 5 percent. Still, the wealthy have access to much more lucrative tax breaks than people with lower incomes.

As for Massachusetts taxes, the less you make the more of your income you pay. (Graph from the Massachusetts Budget and Policy Center.)

While the state’s income tax alone is actually “progressive” (meaning that the more you make the more you pay), the MBPC says once all other state and local taxes — generally regressive ones — pile on, the wealthy are able to pay a smaller percentage of their income to the state.

Just some information to keep in mind as you run your checks to the mailbox or head down to Lincoln Square this afternoon. It’s not just what you’re paying, but who’s paying.



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4 responses to “Happy tax day!

  1. Beth Dupris

    Only 2% of my taxes towards law enforcement and immigration control? That should bother you more than anything Jeremy. Our society is kept safe by the brave men and women of law enforcement, God bless those over worked, unappreciated and underpaid souls!! Before you bash them ask yourself if you would risk being shot, stabbed or poked by a dirty needle? Risk getting HIV, Hepatitis or Tuberculosis all the while having those you protect constantly criticize you, try to sue you and cry about your salary? Why they even bother to protect us speaks to their character, not ours.
    Not surprisingly second on my breakdown was health care. I pay for my own and my family, so that is others health care I am paying second most for that they do not pay for themselves.
    Why only mention defense spending my dear author?

  2. worcestermag

    I only mention defense spending because the second largest amount of my tax money goes towards “ongoing operations, equipment and supplies” for national defense. That, in turn, helps fund a defense department that received $548.9 billion in FY2011 and is proposed to rise to $583 billion with Paul Ryan’s budget proposal. Those figures don’t include the cost of wars in Afghanistan and Iraq, which have largely been put on the country’s “credit card.”
    Most of my tax money, like yours, went towards health care, specifically the “Medicaid and Children’s Health Insurance Program” with Medicare trailing just behind it. If I had my choice of where I want my tax dollars to go, I’d pick to help keep my grandparents’ prescription drug costs lower, pay into a pool that could potentially cover my own medical care in the future and another child’s doctor visit over providing ever-increasing funding for the DoD every single year. That’s the reason I singled out defense spending. It’s also a tangible way of showing that in the fifty years since Eisenhower’s farewell address, the military industrial complex hasn’t slowed (in fact, it’s pretty much increased every year since). The majority of your tax dollars go towards a function of government that could use a good paring down, especially in return for a few more dollars allocated to other areas, like law enforcement as you pointed out, or education, or community development, etc.
    Also, keep in mind this is just your federal taxes, so the law enforcement your 2% is allocated for isn’t local police, but rather border patrol and lawyers and judges in the justice department. Your local policeman’s salary and well-being is pretty much paid for by your state and local taxes, with maybe a few federal grants thrown in for good measure.

  3. And watch how any serious candidate for high-level office is handled when (s)he dares to speak of drastic cuts in so-called “defense” spending:


    Larry Agran was the first that we know of, but it was done to Ron Paul, Dennis K., and Mike Gravel during the last presidential run.

  4. -Q

    1.2 million tax returns are filed each year in Massachusetts (app.)
    Of that total app. 800 Massachusetts citizens voluntarily pay additional amounts above and beyond what they have to pay. In Worcester we have a
    “lyin mayor obrien” and a “tax hike oday” that believe we (the rest of us)need to pay more and more in taxes………..Neither understands that the tax paying public is tapped already to the max – we cannot afford anymore tax increases and yet both are advocating and leading the charge to raise the state income tax back up into the 5.9% – 6.0% range………I would venture to guess that knowing these two – they are not part of the 800+ citizens that voluntarily pay more in taxes……..these two – “lyin mayor obrien” and “tax hike oday” want everyone else to pay for their largess and untenable, wasteful spending spree habits………….don’t be fooled by the usual drivel these two professional politicos speak of………..

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