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Tuesday, April 15, 2008

Tax Day

Generally I am the sort of person who upon receiving my W-2 or 1099 forms has her return in the mail to the IRS the very same day, so replying at such a late date to the Thinking Parents Wiki has me feeling like the time I sat in line in my car at the post office at 11:57 PM to personally hand my husband's return to the poor postal slob on duty that night. Yeah. I file separately. You can probably see why.

The short answer to the question is, yes, relative to the services we receive from the government we do pay too much in taxes.

We live in Florida. Aside from the sub-prime debacle and the general sluggish national real estate market, Florida has the added burden of sky high property taxes affecting real estate sales. Homestead exemptions reduce tax valuations on a primary residence by $25,000 (for typical owners) and lock in a low maximum 3% annual increase, which is wonderful if you've owned your home for years, but not so wonderful if you're buying these days. The exemption does not transfer over with the property to new owners so they get socked with taxes based on the new, much higher rates. That sure won't speed along any recovery.

Let's see, county taxes on my primary residence support roads, water, sewer, garbage collection, schools, emergency services, all average, nothing special.


We also own another teeny house in the same county. It was our primary residence for years. It's on a boat-only island. There are no roads, water, sewer, garbage collection, schools, or emergency services. Sure, the Sheriff will show up sooner or later if there's a big problem, but if someone needs immediate medical attention, you had better hope you fueled up the boat and the weather holds. There are no county facilities for home owners to access the mainland, meaning we pay for boat slips at local (expensive) marinas over and above the taxes for non-existent services, where at least most of us can access dumpsters for trash disposal. Because this teeny house is waterfront, we pay the same amount in taxes as the bigger house on the dry lot. The county occasionally proposes special new taxes to help establish some of services that we already pay for and don't have out there. Luckily for us they're a rather backward lot.

On a federal level, we pay more for the option of filing married but separately and for not bothering with deductions. It's lazy. It's simple. It's our choice. We pay more than our fair share and we ask nothing in return.


We are also permanent residents of Australia. We rent but do own some investment property that we pay local council rates on. It's inexpensive and a bargain for the infrastructure involved. On a federal level, tax laws in both countries have us paying income tax on any income earned in either country. Money we make in Australia gets taxed as income to us in Australia and in the US. Money made in the US gets taxed as income to us in the US and Australia. Even though we can only earn and live and spend in one country at a time. Fortunately, in one respect, we haven't made much money in Australia. The general income tax rate is around 30%, but with a little bit of legal wangling we can reduce it to nearly half that. Here though, we have free health care and that makes all the difference. Say what you will about socialized medicine (but maybe watch Sicko first), whatever we pay in taxes here is worth it. Three trips to the emergency room for kids' stitches and one overnight with follow-up testing for me in a two month stretch would have been a huge hit to us in the States, being self-employed and uninsured. But here? No charge. Just part of what every Australian is entitled to. What we pay here is very fair compared with the services we receive, if only the IRS didn't have its greedy mitts out too.

Happy April 15, everyone.

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