Monday, February 16, 2009

Grrrrrrr....taxes

I spent about two hours today working on my 2008 income tax returns, which is pretty much my least favorite thing to do in the world. I usually put it off until the last minute, but I figured since I will be travelling around Europe in April, I should probably have them done before then. The plus side is that I'm getting about $300 back, a nice little cushion in my bank account that is quickly being depleting from all this travelling. I am beginning to think I should take the Italian approach to income taxes. Hardly anyone in Italy reports their full income, so they don't pay the full amount of taxes that they technically should. However, since everyone does it, the government can't do anything about it. Here are some statistics from the Wall Street Journal (06/28/2007): unpaid income taxes in Italy from the country's black market economy constitute 27% of Italy's GDP; only 0.8% of Italians claim to earn more than $134,000 per year; Italian restaurant owners declare an annual average income of just $18,000 (less than school-teachers); there are 5,800 people in Italy who declare incomes of less than 5,000 euros per year, but who drive cars worth more than 100,000 euros. The reasons for these tax evasions are complex, but one reason is that the Italian government bureaucracy is notoriously corrupt, and taxpayers believe their tax dollars are squandered, which, in many cases, is true. I guess I feel a little more confident that the tax dollars I pay to the U.S. government are at least doing some good. Plus, if I didn't pay my taxes in the U.S., I'm pretty sure the IRS would be on my tail eventually. So I guess I will be a good American citizen and pay taxes, and I shouldn't complain too much because at least I'm getting some money back.

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