When it comes to paying taxes, Americans are downright weird. We often say one thing and do the exact opposite.
Consider the billionaire Warren Buffett, who has gone public with his belief that rich folks don’t pay enough. It may be silly to argue that he should just volunteer a bigger chunk of his hoard and leave everyone else alone. But Buffett’s company, Berkshire Hathaway, recently found itself at odds with the IRS and owing $1 billion from many years ago. That’s business. It’s also bad optics.
Speaking of Buffett, a tax proposal in his name (the Buffett Rule) is front and center. Republicans have so far succeeded in blocking the proposal. But the concept is far from dead. The Buffett Rule would ensure that anyone who makes more than $1 million a year pays at least 30% to the taxman. Most Americans, including many who are well to do, favor such a measure. A survey from Washington University found that 93% of likely Obama voters and 66% of likely Romney voters think the rich should pay more. Other surveys show that Americans of all means generally want to pay their fair share. So why do we keep electing politicians who only pledge to cut taxes or keep them the same? As the Toronto Globe and Mail opines:
“Dumping the Bush cut for middle-income taxpayers would yield significantly more money (than the Buffett Rule). But President Obama has pledged not to do so, and the Republicans wouldn’t approve tax hikes of any sort either before or after the November elections.”
Meanwhile, a new poll from SodaHead.com, an opinion-based online community, found that the vast majority of taxpayers (87%) cheat at least occasionally. The vast majority of those who do not cheat (84%) say they would if they knew they wouldn’t get caught. This is willingness to pay a fair share?
The SodaHead.com poll also found that among people expecting a tax refund this year the top three targets for the money are saving it, paying down debt and paying bills. Yet this would be stunning discipline indeed for a population that is chronically under saved and routinely mismanages personal assets. Witness our retirement savings crisis, expanding credit card debt and near record-level of personal bankruptcies.
We have a constant flow of celebrities that get into a tax mess. World Cup champion skier Lindsey Vonn just paid off a $1.7 million delinquent tax burden. But many others — from baseball player Lenny Dykstra to singer Lionel Ritchie — have wound up in court or jail over taxes despite their massive earnings. It simply doesn’t make sense, and it sets a bad example.
But weirdest of all may be our cavalier approach to the annual tax deadline. Goingconcern.com, a website for accountants, polled members for the craziest things they heard from clients this tax season. A few were bell ringers:
- “I’m really busy this week so I’ll stop by on April 17th to do my taxes.”
- “I owe more than I did last year. What did you do wrong?”
- “I took my girlfriend to Vegas when I was on business. Can we say she was working and claim her too?”
- “I had surgery in December but didn’t pay for it until January. Can we just say I paid it in December?”
- “I can’t find my receipts but I can give you a pretty good guess.”
- “I haven’t filed a tax return in 10 years. Do you think I’ll be in trouble?”
I guess it’s easy to see why 44% of taxpayers use a paid tax preparer.