Annmarie Throckmorton, M.A.
- Mar 16, 2018

It is always tax season :(

I remember the first year that I paid taxes, it was in the middle of the twentieth century. I was proud of finally being a wage-earner, and I was super proud to contribute to my country by paying taxes. (I still feel proud of my country in many regards, but about taxes? Not so much.) That first year I anxiously awaited my IRS W2 Form from my employer, with wages earned and taxes withheld, wondering why it took so long? I was chomping at the bit to pay my fair share.

Then I saw how convoluted (at least for a newb) the U.S. Individual Income Tax Return-1040 Form was (no easy form back then). The IRS 1040 Form was riddled with government-speak. This did not seem fair. I knew that I was “smarter than the average bear”*, and if I could not make heads or tails of it, what about the average guy or gal? I asked my accounting-savvy mother to do my taxes for me, and she did them for many years thereafter. Whenever she did not do my taxes, I always seemed to end up paying too much, and this was in the days when if you made a mistake on your tax return in favor of the Internal Revenue Service they just kept it to themselves, only notifying you if your mistake meant you owed more taxes.

My mother knew how eager I was to fully participate in society, to be an adult. She silently handed me my very first completed tax return for my signature; and I saw the huge amount of taxes taken from me, over a quarter of my minimum wage income, leaving me with hardly enough to live on, certainly not enough to get ahead. And not being a stupid girl, I thought about all the other taxes I had been paying as I went along throughout the year. I was vexed, and now fifty-plus years later I finally get to complain about it publicly. Thank you for listening, and hopefully thinking, then acting. The over-taxation problem will only get worse, until someone makes it better.

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* Yogi Bear created by William Hanna, Joseph Barbera, Ed Benedict, 1958. Yogi Bear bragged that he was “Smarter than the average bear”, which is now an idiom.

Yogi Bear theme song: https://www.youtube.com/watch?v=1pqyax6gwzQ

This was one of my favorite Yogi Bear episodes: https://www.youtube.com/watch?v=k5AwcMWb1Ns

Here is a list of taxes Americans now pay, in the twenty-first century.

Note: There may be other taxes not on this list.

In most cases you can deduct child birth expenses on your federal tax return, but not always. For example, “only the portion of your costs that exceed a certain threshold percentage of your adjusted gross income can actually be deducted.” (Huh? Why?)

Inheritance is taxed in many jurisdictions, they get you coming in and going out.

federal income tax (wages/salary/tips)

state income tax (The same wages/salary/tips are taxed a second time.)

your business property located within a taxing jurisdiction (real estate, vehicles, personal property such as tools or equipment that produce income, and related furniture)

state sales tax

county sales and use tax

city sales tax

city utilities tax (water, sewer, trash pickup)

corporate taxes passed on to the consumer in cost of goods and services

“sin” tax on cigarettes, alcohol, gambling, etc. (see below)

county fees such as vehicle tags, pet tags, etc.

activity fees for boating, hunting, state parks, etc.

travel arrival/departure fees (The government even taxes your vacation!)

investment taxes on capital gains (profit from the sale of property or an investment)

consumption tax (sales taxes, tariffs, excise, and other taxes on goods & services)

Bank account interest earned is taxed.

Dividends from stock, bonds, and like financial instruments are taxed.

States vary in the commodities that they tax, here are some additional taxes in Illinois,

which is my mother's home state but not mine.

Source: The Balance | “Learn About Illinois State Taxes”

https://www.thebalance.com/illinois-tax-profile-3193263

“Sales Tax: The state sales tax rate is 6.25%. However, prescription and non-prescriptions drugs, medical equipment, and qualifying food purchases are only taxed at 1%. Localities can add their own sales taxes, which can bring sales tax rates up to 11.5% in some areas.

“Gasoline Tax: 39 cents per gallon for unleaded. Chicago and Cook County are authorized to add additional taxes of 5 cents and 6 cents. Diesel is taxed at 41.7 cents per gallon.

“Cigarette Tax: 98 cents per pack of 20. Counties and cities can charge extra taxes, with Cook County adding $2.00. According to The Campaign for Tobacco-Free Kids, Chicago has the second highest cigarette taxes in the country at $3.66 per pack. Three other Cook County cities made the top ten: Evanston ranked third at $3.48 per pack; Cicero ranked sixth at $3.14 per pack, and Rosemont ranked seventh at $3.03 per pack.

“Chicago soft drink tax: Retailers pay a 3% tax on their gross soft drink sales in Chicago, which is usually charged to the consumer when they purchase a soda or other drink containing less than 50% juice (milk is not included). Businesses that supply fountain drink syrup to retailers are also required to pay a 9% tax on their gross syrup sales.”

And for those trying to get an illicit break:

Source: “Is Illinois requiring double taxation on gambling winnings from another state?”

https://accountants-community.intuit.com/questions/786201-is-illinois-requiring-double-taxation-on-gambling-winnings-from-another-state

“Taxpayer received a return correction notice which states "If you were an Illinois resident when the gambling winnings were earned, you must pay Illinois income tax on gambling winnings. You may not take a credit for income tax paid to another state.

“This has the result of the taxpayer paying tax to the state where the winnings were received and also paying tax to Illinois on the same winnings...”