Monday, December 9, 2013
From cradle (sales tax) to grave (tombstone sales tax) and beyond (estate tax), the old adage is true: The only sure things are death and taxes. Death comes first. Taxes continue.
Maine taxpayers went over the fiscal cliff many years ago. And it's been a long agonizing plunge into the depths of fiscal insanity ever since.
This makes the current debate about ending the federal income tax deduction for mortgage interest laughable. Seventy eight percent of the $83 billion of those deductions goes to people making $100,000 or more. I probably don't have to remind you that the median household income in Maine (from 2006 to 2010) was $46,933.
Most Mainers could move in with their neighbors, combine their incomes, and not hit $100,000. The mortgage interest deduction is applied not only to homes, but also to "second homes." Those would be what we call cottages (if you are from away) or camps (if you are stuck here year- round). According to Portland Press Herald reporter Jessica Hall, Maine leads the nation with the highest percentage rate -- at 17.24 percent -- of vacation homes.
It's hard to imagine why anyone would need an interest deduction if he can afford a cottage or camp. If you think the tax system is structured to favor anyone but the rich, you haven't looked at your paycheck lately. I'll bet a lot of people don't even know what the payroll tax is.
And while most Mainers contribute to the Social Security system with every paycheck, the wealthy stop contributing after their annual income tops $110,100. Tens of thousands of pages of federal tax code are dedicated to the plethora of tax breaks designed to allow the wealthy to keep more of their income and wealth.
Did you notice that Mitt Romney had to willingly give up $3 million of tax deductions for which he was eligible, in order to keep his income tax rate at what he thought was a politically acceptable 13 percent?
No wonder so many took such long odds and purchased Powerball tickets when the advertised prize topped $550 million. Apparently we all want to be Mitt Romney!
But even here, the government engages in trickery. Each of the two winners on that Powerball jackpot will receive $193 million, about $100 million less than the advertised jackpot. The government hands each of them -- only for the purposes of a news photograph -- a check for $293 million, then quickly deducts $100 million in taxes and penalties for taking the money in a lump sum.
It is sort of like giving your grandchild $50 cash for Christmas, then quickly tacking back $20. Actually, that might be a good lesson in government for the grandchild.
But you'd have to go farther with this lesson to fully educate the child about our system of taxation trickery. I used to describe it as nickel and diming us to death. But the amounts are much bigger than nickels and dimes these days.
We give the taxman about $8 for an average fill-up of 14 gallons of gas. Excise taxes punish us year after year after year for buying a new vehicle. And the sales tax is also levied on that new vehicle purchase.
Doubling the taxes definitely doesn't double the fun.
Then there are the astonishing number of licenses, permits, and registrations that burden my life. I buy a big game hunting license, but -- surprise! -- it doesn't include turkeys, which are classified as big game animals.
To hunt turkeys, I must buy a special turkey hunting permit for $20. And if I shoot my allotted Tom turkey in the spring, Maine's Department of Inland Fisheries and Wildlife generously allows me to shoot a second Tom, for another $20 fee.
If Linda ever finds out how much that turkey I got last spring actually cost, I'll be doing my turkey hunting in the supermarket in the future.
I nearly forgot to purchase the required permit to hunt deer with a muzzle-loading rifle this year. After the regular rifle season ended on Nov. 24, I was getting ready to proceed into the muzzle-loading season when my hunting buddy Ed Pineau emailed me the confirmation of his purchase of the required special permit. Holy cow! I'd forgotten to buy it. $14 later, I was ready to take to the woods.
And guess what? If I am lucky enough to bag a deer this week, I've got to pay $5 to register it!
George Smith is a writer and TV talk show host. He can be reached at 34 Blake Hill Road, Mount Vernon 04352, or email@example.com. Read more of Smith's writings at www.georgesmithmaine.com.