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.
-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.