[IMGCAP(1)]Ah, tax season. We look forward to it all year! Or expect it all year, or dread it let’s just say we are all aware of this annual event.
It’s not the most enjoyable aspect of spring for most people, in particular tax preparers. But despite the drudgery of figuring and filing and the pain of actually paying those taxes, the season comes and finally, mercifully it goes.
You did it! Whew! Now draw a deep breath, wipe the honest sweat from your furrowed brow and relax, because it’s over. You can even laugh at all your anxiety about it now (although it might be a somewhat hollow, mirthless laugh).
At least taxes are interesting, in a horrifying kind of way. Just look at all the fun facts there are to learn:
If you’re among those who marvel at the sheer length of the tax code as you struggle to make sense of what you read, you’re not imagining it; there are roughly 4 million words in the thing as of January 2014! For comparison, the complete works of Shakespeare contain only 884,647 and the English language itself includes only slightly more than a million.
We tend to think of paying taxes as a cut and dried matter based on concrete numbers, even if those numbers aren’t easy to find. In reality, highly trained CPAs come up with highly divergent answers to tax questions, resulting in mistakes and/or different amounts owed. Money Magazine used to ask 50 accountants each year to complete a hypothetical family’s tax return and compared the results. Every year until the magazine stopped the routine after 1998, the amounts were different—sometimes by a very large margin. Sometimes there were 50 different answers, one for each preparer!
Professional tax preparers, just like the rest of us, can find themselves confused by the finer points of the Tax Code (as illustrated by the previous discussion). That may be less surprising when you stop to think about the word tax.’ Its etymology? Tax’ comes from the Latin verb form taxo’ which translates to “I estimate.” Makes more sense now, eh?
The U.S. Tax Code is written to be progressive, meaning that taxpayers who earn more pay a larger share of their income in taxes. While this is at least theoretically true for individuals, the principle completely falls apart when it comes to corporations. The companies making the largest amount of profits often end up paying nothing in taxes. General Electric, Boeing, Verizon, Pepco and Duke Energy are among dozens of profitable Fortune 500 companies that have paid nothing in federal taxes over the past five years, according to a recent study by Citizens for Tax Justice.
So-called “sin taxes” are taxes paid for products and services generally reserved for adults, such as those related to drinking, smoking and gambling. This perennially popular trio brings in a huge amount of tax revenue for federal as well as state governments. Now that marijuana has joined the mix of legal, taxable adult products, sin taxes are set to start earning a massive windfall for states that hop on the bong bandwagon. Colorado expects to take in $35 million in combined recreational and medicinal pot taxes by June of 2014. The office of Governor John Hickenlooper predicts $188 million in weed tax revenue over the following fiscal year. Just imagine what would happen to the federal budget deficit if marijuana were legalized and taxed on a national basis!
There’s an unlimited supply of additional information about taxes available to those who find themselves morbidly fascinated by the subject. For the rest of you, though, it’s time to file away those tax-related documents, stretch and go blinking out into the beautiful spring that arrived while you were hunched over your crumpled piles of receipts. Look, flowers!
Sarah Warlick is content director of bbr marketing.