A taxing time

Yesterday was Tax Day in the United States, the last day for filing taxes.  Normally this happens on the 15th of April but as that is a Sunday this year taxpayers are given two days extra to get everything together.

Mrs Walles and I had our taxes done professionally.  Unlike New Zealand, everyone has to file a return even if they just work for salary or wages, though for most people it's a one page form and can be done online.  That's what Mrs Walles has done before but this year, given that we married and I got my green card and my general unfamiliarity with the tax system we put it in the hands of a pro, which eased things tremendously.

That's because the US tax system is a tad on the complicated side, to say the least.  There are seemingly dozens and dozens of deductions and credits and exemptions and such.  The deductions are so complicated that most people just take what's called the standard deduction, a catch-all figure computed by the government that saves you having to bother with any details.  Even if none of the actual deductions would count in your favour you can still take the standard deduction, which means that many, perhaps most taxpayers get a rebate just for turning up.  And then of course there are three different levels of income tax here.  The federal government takes the lions share, then the state has a go and finally the local government takes a bit, and each of these entails a separate tax return with slightly different rules.

They seem quite keen on taxes here, in fact.  There's a separate tax taken out for social security and Medicare which is supposed to fund superannuation and medical insurance for retired people (but which, we are often told, it isn't enough to cover).  Our town also levies a per capita tax of a few dollars a year, apart from the income tax.  Then there are property taxes and state sales tax, and the town charges separately for services it provides, like water and sewerage.  For some of these you can find New Zealand equivalents in ACC levies, GST and rates, but not all.  "No taxation without representation" was a rallying cry of the American Revolution, and it seems that once Americans got their representation they went to town with the taxation.  It's not that the taxation is very burdensome, its roughly the same as in New Zealand and no doubt most of the industrialised world.  It's just that it manifests itself as a lot of little nibbles rather than the few big gulps I'm used to.

On the plus side, though, married couples in the US can pool their income for tax purposes, resulting in a tax break, something that's impossible in New Zealand.  With such an incentive it's hardly a surprise that long engagements are the exception rather than the rule!