I am sure I am not the only one has a few choice words when it comes to paying taxes. Do not misunderstand I have no problem doing my share to protect my freedoms and have the opportunity for a certain standard of living. But I think that government waste and welfare programs have giving me and countless others an unfair tax burden. However, according to an article on cnbc.com this may not be entirely true. In fact it goes on to state and I quote, “About 47 percent will pay no federal income taxes at all for 2009. Either their incomes were too low, or they qualified for enough credits, deductions and exemptions to eliminate their liability.” AP, Published: Thursday, 8 Apr 2010 | 3:01 AM ET.

There are things about this article that caught my attention but maybe I am just being cynical. The first thing is regardless of what happens at the end of the year money is paid to the government, often over paid by most individuals, and they are able to use it without paying any interest for securing those funds in advance. Also, things such as medicare and social security which are a significant bite are gone never to be seen again no matter how many credits you have. I am not saying I do not support these programs but I know there is a fair amount of waste in these programs like anything else the government runs.

It quotes a gentlemen in the article saying, “It’s not uncommon for people to think that their Social Security taxes, their 401(k) contributions, their share of employer health premiums, all of that stuff in their mind gets lumped into income taxes,” Stretch said. AP, Published: Thursday, 8 Apr 2010 | 3:01 AM ET. I cannot see people lumping their 401k contribution in with their tax disdain. As someone who’s employer has a 401k, they are constantly talking about the tax benefits and how it reduces your taxable income.

Now something to help many of us feel better, “It is a system ( US Federal Taxes ) in which the top 10 percent of earners — households making an average of $366,400 in 2006 — paid about 73 percent of the income taxes collected by the federal government.” AP, Published: Thursday, 8 Apr 2010 | 3:01 AM ET. This statement is also somewhat misleading because this does not describe the tax burden as a percentage of income. As Warren Buffet has said he may pay significantly more in taxes but he earned significantly more and what he paid is actually less as a percentage when compared to his assistant and other moderate income employees. “Warren Buffett, the third-richest man in the world, has criticised the US tax system for allowing him to pay a lower rate than his secretary and his cleaner. Mr Buffett said that he was taxed at 17.7 per cent on the $46 million he made last year, without trying to avoid paying higher taxes, while his secretary, who earned $60,000, was taxed at 30 per cent.” The Times

I think it would be more accurate to say that many of us may not have to pay additional taxes at the end of the year and many of us may get a refund because we paid too much over the year or were able to take advantage of enough of the tax credits. But we all pay our share, and the amount of people who truly pay no taxes, meaning they are refunded every penny they paid in federal income tax, must be significantly less than 47 percent. If it is too good to be true it probably is. For the full article click cnbc.com.

Matt