Sunday, April 3, 2011

Americans have taxes and tax rates. There is a certain amount of money that a person makes. Then as the tax cycle moves through the year each pay check has a certain amount taken out of it which goes to pay for schools, healthcare, roads, defence or whatever else your respective governing bodies require that money to be allocated for. Come April each year it is tax time. All persons in the United States fill out a stupidly complicated set of forms to see if they need to pay more money or if they get some back. This process is different for everyone. There are dozens of provisions that can change your payment equation. If you are poor you ususally get money back, if you are rich you will have to pay something out. But what many people dont understand is that what your allocated income tax amount is, is not what you will proabably pay come the end of April. You made $300,000 this year? wow you did so well. You are at a high tax bracket. Oh wait, you donated money to charity. You bought a new home and a new car. You had children in college. You hired two new people at your small business. You made money off that boat you sold. Just a short time of clicking and typing on your turbo tax, and boom! You now owe taxes on $160,000. It is amazing how that works. The reality is that our overall revenue systems have so many provisions. They are set up to try and build equity among tax payers and not peanilze those unfairly. The reality is that in all situations the government is not taking in the tax amounts that it origannly intened. Uncalculated tax cuts, and unpaid for programs set the deficit. The cost rise and then a deficit is formed. Check it out. In order to ballance the budget, we need to change both the systems in which we spend money but also the systems in which we collect money. We may not need to increase taxes much but allocating them faily and wisely while still bringing in the amount of money necessary to run the governemnt is imparitive.

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