A taxing situation – Why government agencies seem to come calling at the same time
California Gov. Ronald Reagan once said taxes should hurt, and Nevada County residents are feeling that pain this week as they face deadlines for federal and state taxes, as well as county property taxes.
From Monday’s deadline for property taxes to Friday’s drop-dead day for federal and state income tax returns, county residents will pay out over $820 million – if they haven’t already bit the bullet and mailed the checks.
Jeff Russell of Grass Valley, a semi-retired contractor, believes most of the pain comes from the way tax money is spent.
“I don’t think the government is very smart about the taxes I pay,” he said. “It’s difficult to get people with vision in government.
“It’s like taking money and throwing it into a wastepaper basket.”Why all this money is due in a five-day period is largely a case of “follow the leader.” After the April 15 deadline was set for federal income tax, states that have the tax decided to use the same date.
County Treasurer-Tax Collector Chris Dabis said the Dec. 10 and April 10 deadlines for installment payments of property taxes were set by state law more than 50 years ago.
“I jokingly say that we do it at Christmas time because we know you’ve got money,” she said, “and we do it before the state income tax is due so you have to pay us first and they can just wait.”
Dabis sent out property tax bills totaling $160 million for the 2004-05 fiscal year, and the second installment was due Monday – since April 10 fell on a Sunday, property owners had a extra day to pay up.
The money is distributed to 55 taxing agencies in the county: county and city governments, school and fire protection districts, among others. More than half of the money goes to education, said county Auditor-Controller Bruce Bielefelt.
County residents paid $61.5 million in state income taxes in 2002, according to the state Department of Finance, and an estimated $680 million in federal income tax the same year.
The federal tax bite works out to $7,286 for every man, woman and child in the county, according to the California Institute for Federal Policy Research.
The federal government returned $5,807 per capita to the county in the form of direct payments, grants, procurement and wages, according to the institute.
There is a price to be paid for living in California, and that price comes in the form of some of the highest taxes in the nation. The Cato Institute estimates that federal, state and local taxes take up to 40 percent of the income of a middle class family in the state.
To put it in more concrete terms, the institute calculates that a California resident has to earn $18,776 to purchase a $10,000 car. The difference is tax on the car, and income and payroll taxes on the money earned.
Nationwide, a person would have to earn $17,038 to afford that $10,000 car, according to the institute.
California tops all other states in the tax derby with a personal income tax rate that tops out at 9.3 percent and a sales tax as high as 8.25 percent in some counties. Nevada County residents catch a break – the sales tax is only 7.375 percent here.
But that doesn’t mean area residents are happy about the taxes they pay, said Dabis, who likes to tell people that much of her weight isn’t from fat – “It’s thick skin.”
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