April 18, 2017 10:49:44 AM
Today is the deadline for filing federal income taxes. This year, we had three extra days to procrastinate and complain. Normally, the deadline is April 15, but since it fell on a Saturday and since Monday was Patriots Day (thanks, Boston), the deadline was pushed back to April 18.
Since the federal income tax was permanently authorized by Congress in 1913 (apparently, by a majority of Congressmen who didn't intend to run for re-election), few things in our nation have been more muddled by half-truths, distortions and outright lies. If you listed the biggest issue that political campaigns have been based on over the past 104 years, taxes is No. 1 on the list and No. 2 (war, most likely) is a distant second.
Americans pay their taxes and while we have deep suspicions we're paying more than our fair share while others aren't, most of us (I hope) recognize that paying taxes is a civic responsibility, the way we sustain the social contract all civilized societies recognize as a necessity.
Even so, we suspect some folks - poor people or corporations, depending on your political leanings - are gaming the system and not paying their fair share. We also suspect that our government is taking too much of our money to squander on wasteful, fraud-ridden programs, i.e. the programs that don't benefit us.
The data doesn't support these suspicions, though.
For example, tax revenue as a percentage of Gross Domestic Product (all the stuff a nation produces) is 26 percent in the U.S. The average among developed, democratically-run counties is 34 percent.
Our corporate tax rate is higher than those other countries, but the effective corporate tax rate (factoring in all deductions) is 27.9 percent, pretty much in line with the average of those other countries (27.7 percent).
As for Mississippians, we probably don't have much reason to complain about federal taxes. Our state ranks near to bottom in individual federal income taxes paid. On average, we pay $8,700 in federal taxes each year. That's $5,300 less than the national average and $13,300 less than the average Connecticut residents, the poor schmucks.
That's only half the story, though.
Like any other transactions, it's not what you pay, it's what you get for what you pay.
Again, Mississippians have little reason to complain.
Outside of Kentucky, no state gets a higher percent of federal tax dollars than Mississippi. Last week, when Rep. Jeff Smith spoke before the Kiwanis Club, he noted the state budget was set at $6 billion, but pointed out that the "real" budget was $21 billion. Guess where that other $15 billion comes from? Hint: It ain't the tooth fairy.
Now, some of you folks who are determined to be deeply offended by your tax burden, are saying, "Well, sure, we pay fewer taxes because those taxes are based on revenue and we are a poor state, mainly because there are too many of 'those people' who won't get a job."
While that has always been a fashionable argument in our state, the truth is that all of us are more reliant on the kindness of strangers (as expressed by those federal funds) than we would care to admit.
According to the personal finance website, WalletHub, Mississippi residents (including all of those poor folks) are the seventh-most dependent on federal funds. That's bad, of course. But here's the kicker: According to the data, Mississippi's government is the most reliant of all states on federal funds, as Smith noted in his talk.
In fact, there are few services provided by our state not supported heavily by federal tax dollars. For every dollar we send to Washington, we get almost $3 back. Only New Mexico feeds at the teat of the federal government at such a rate.
Mississippi is one very large glass house when it comes to taxes.
Careful where you throw your stones.
Slim Smith is a columnist and feature writer for The Dispatch. His email address is [email protected]
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