17 September 2007

Tax Time

Most folks only think about their taxes in April. Those of us who are self-employed have to think about their taxes at least every quarter, when we send in our estimated tax payments to the IRS and (for those living in states like Illinois) the state department of revenue. Today happens to be the day that third quarter checks must be postmarked.

I must admit that when I was employed and bringing home a regular paycheck, and taxes were being withheld by my employer, I rarely thought about how much I was paying. In fact, I rarely thought about taxes until I filed my return in the spring and received a tax refund check. Like most people, my first (and emotional) response to that refund check was to think of it as a bonus. It filled me with good feelings about the special treat I might now be able to afford. My thoughts rarely, if ever, took the next logical step: indignation that the Government had had control of my money for the last year and wasn't paying me a dime of interest for the privilege.

As I said, I rarely thought about taxes. Sure, when my paycheck came, I "saw" the amounts being withheld for FICA and for Federal/State income taxes...but they weren't real to me. In putting together our family budget, my "income" was the take-home amount on the check. To use round numbers, I didn't think of my "income" as $2,000 every two weeks, or whatever I was making back then. I thought of it as $1,574.27, or whatever the take-home amount was.

Once I became self-employed, and began writing out checks for my taxes every three months, my mindset changed entirely. Every dime that I earned from every project went into my bank account, and I saw it there in my account. And then I had to pull it out of that account and send it off to the government myself, just like any other bill or expense. I began planning ahead, establishing a separate savings account into which I held at least two quarters worth of tax payments. When I check my accounts, I see those amounts generating interest income for our family. And then, every quarter, I must slash those numbers and watch the interest income plummet along with our family's liquidity.

In short order, I found myself thinking a lot more about government. After all, when you're writing a check and paying a bill, you think about what you are receiving in exchange for that payment. When I write a check to the feed store, or my transcriptionist, or a focus group facility, or my survey data collection fieldhouse, I think about the quality of the product or service they provided. When I write a contribution check to our church or a charity, I think about the good works I am helping them provide.

So...when I write out those checks to "United States Treasury" and "Illinois Department of Revenue," what am I getting?

The late Supreme Court justice Oliver Wendell Holmes is said to have explained that "Taxes are the price we pay for civilization." Fair enough. But if that's true, it would be a healthy thing for Americans to reflect a bit more on the nature and quality of civilization that their taxes are purchasing. Why not require each and every one of us to sit down once per quarter, open up his checkbook, and transfer money from his own account to the United States Treasury? If the government is secure and confident about the quality of civilization it provides with those tax dollars, wouldn't it be a good thing for her citizens to take a few moments each quarter to reflect upon that quality civilization?

1 comment:

Tim Hopkins said...

Hi Yeoman, I like the idea a lot of us actually having to write a check. It would definitely make people pay more attention to what happens with government. I think Pat Buchanan a few years back suggested that we make tax day the day before election day, but maybe a quarterly date would do the same thing.

O'course, I am much more libertarian on the whole tax thing myself, so I would pretty much abolish all of them, sell off as much as we could with some provision for a transition period and some provision for access to public lands and then establish user fees for whatever was left.

Nice post though.