i've learned a lot from this thread. i've never had any money other than part-time wages in --> part-time wages out, so i've never been able to save. but i'm trying to learn from my parents' mistakes/misfortunes, and im studying hard (when Im not on VGC :X) so i can get a good job and look after my them. any money i get right now will be to cover day-to-day living expenses, but when i have a job and im starting out in my career field of choice i hope to be totally self-reliant. not sure how i'll feel about tax wastes then... XD

thanks for the tips nordlead ^_^

I think taxes should go to things that don't make sense for a private corporation to provide. Roads, police, sewer system, military defense. The Fire Department really doesn't need to be covered by taxes, as the old method was they were paid by the home insurance companies. Obviously in the case of forest fires the state/federal government would have to step in to pay to put it out for the greater good of the communities around it.

And yes, I agree with you. The worst thing is when they use taxes for welfare which gets wasted by stupid people. But the problem is, the government deals in money rather than direct services. Charities can provide direct services typically at a fraction of the cost of the government and still run non-profit. So charities can help more people with the same amount of $. Heck, people even volunteer free time to charities like food kitchens to help feed those less fortunate then themselves. I can't say I've ever heard of anyone donating time to the government to help deliver welfare checks

the problem with charities is that some have political agendas/religious affiliations so I'm not sure if the government would officially fund one group over another. I would be open to cutting out welfare all together and instead giving tax breaks for people who donate to non-profit organizations. I'm not sure how the logistics of that would work, though. Some non profits are bound to be corrupt and skim off the top, so it has to be policed one way or another.

I was also homeschooled my entire life. My family recieved $0 in compensation for doing this (despite median costs per student being $10,000/yr in Ohio). Because of this, my family saved taxpayers roughly $250,000 over the course of the education of my brother and myself.

Here are a few points of contention with tax paying and the benefits derived from it. It's not that some things are 'bad' but they are inefficient, and cost more than they should. I am only speaking from a US taxpayer standpoint, so please bear this in mind:

• Social Security. It is our federally-enforced pension system in the US. The only exemptions are for government workers and self-employed people. It's approximately an 8% tax levied on those with taxable income (eg, work for any business). The problem with this system is that the annual return of Social Security is beyond abhorrent: It accrues interest at 1.3% APY after adjustments for inflation. This is much lower than any private system available in the United States. Most private systems earn 4-5 times this amount. Remember those government workers I stated that were exempt? Most have infinitely better systems that the government offers them. For example, when I worked as a city employee of Ohio, I was exempt from Social Security. I contributed to OPERS (Ohio Public Employee Retirement System). It accrued interest at over 10% per year. It offered flexibility in how I could invest (I could diversify into whatever I wanted - with SS, you give them your money and they never report to you as what is going on with it), and many other options and benefits. Why should you be forced into an inferior system when there are better, more comprehensive systems out there?
• Schooling. A point we've just discussed. School taxes come from a variety of sources. Most are derived from property tax - many people pay a percentage of their houses' worth each year to support schools. This system taxes those that have houses and rewards those that do not. Furthermore, our US schooling system is abhorrent (please read our other threads about this). We're one of the worst in the industrialized world, yet we spend more money than almost any other country. There's almost no flexibility in the system - you are forced to go you your local public school in most cases. If your lucky, you can afford private school (which is cheaper than public schools in terms of financial burden - in Ohio, private schools cost half of public schools) or your parents can take the time for homeschooling. Either way, people are forced (which is fine) to pay for very bad, inflexible education. No one really would argue we should do away with mandatory taxes for schooling, but do we really need this kind of education at these insane prices?
• Healthcare. Despite what you've seen in the news, America has a federal healthcare system. It's called Medicare and Medicaid. Every American puts money into this, despite the fact that not everyone is eligible for it. It is far from universal, and targets the elderly and the poor. There's nothing wrong with wanting to help the poor. However, I've done some number crunching for Medicare: It costs roughly 80% more per enrollment than private healthcare in America. That means that for every 10 people enrolled in Medicare, you could have 18 on a private plan. Are we paying for efficency, or waste?
• National Defense. You know America. You know how much we spend. It's not outside of anyone's knowledge. Do we really need to spend $500 billion a year to defend other countries? I think not. A large amount of our defense costs are going toward protecting others in Iraq, Afghanistan, and even in friggin Europe. Who are we protecting in Europe? The French from another German invasion? We've hamstrung other countries like Japan from protecting themselves, and are exuasting our troops & finances for such things. Not a very good thing, no? How often do we see other countries and entities create such large defense networks? We shouldn't be doing this, yet we're taxing every American citizen roughly $1,500 a year for this cause.

And those are just parts of the American federal tax system. This doesn't include state or local projects. Most states and cities do a good job, but when they're handed federally, things can get out of control.

To see where American tax dollars go (the $3.2 trillion of 'em) check out this huge chart:

http://img297.imageshack.us/img297/5927/wallstatsdatlarge.jpg

The key to charities is that they are actually charitable. Some may have affiliations, but if they are proved to do very well, then it shouldn't really matter. For example, my local church has a food pantry. The church gives them free overhead (rent, utilities) and workers are provided by the church & community. This allows for the food bank to distribute food at cost, which is given by companies that have excess foodstuffs or damaged goods that are good, but not sellable at market.

We do actually have tax writeoffs for charities. However, Obama has cut back (or is planning on cutting back) concerning maximum contributions.

Of anything I can think of, or believe in, it's the fact that charities do a much better job at giving aid and relief than the government is. Remember Hurricane Katrina? The government wallowed in help, while private charities were down there within days giving what aid they could to the region. The same can be said for almost any disaster.

And you could always police non-profits, quite easily. All you'd have to do is audit them to ensure that they are contributing a certain percentage to the actual cause, and not skimming it in overhead (like paid workers).

yeah if I were Obama, I'd do the opposite and INCREASE tax writeoffs for charities, at the same time phasing out welfare programs.

I'd probably also spend some money setting some criteria as to exactly what charities can do with donation money (i.e. not funding terrorists in Iraq)

@mrstickball: How does the medicare work? Usually a system with private insurance and private healthcare runs the cost extremely high and public sector tends to be way cheaper.

As for the military, you had a little naive picture. The idea isn't to protect anyone abroad, but to have influence in different places.

@Trashleg: You're unhappy with the taxes only when they aren't used the way you see appropriate. Once you have kids, you likely are very happy with the taxes that are being paid.

@That Guy: The biggest problem with the charity-based healthcare is its reliance on charity. If the system would be wanted to keep working, there would need to be government funding to keep it going.

not necessarily. Charities don't get gov't subsidies now and they still exist.

And if it were up to mrstickball and/or me, the government really wouldn't be involved. People wouldjust have more money (less taxes) and they can contribute however much they want towards whatever charity they want.

@That Guy: The charity itself is the problem. The system would work or not work, depending on the amount of money given to charity. Due to fluctuation, the government would need to subsidise in order to attain the certain level of quality in the service.

Here's how medicare works:

Every US taxpayer has a deduction via income tax at a rate of 1.45% for the employee, and 1.45% from the employer for a grand total of 2.9% of the value of your employment at your job. This is how medicare is funded, straight up. Self-employed people must pay this tax as well. I made $2,000 in some freelance work via a W-9 last year - I had to pay 2.9% of that for Medicare.

Medicare elegibility, from Wikipedia:

So let's go over this again: a 2.9% tax taken from everyone for only those eligible past the age of 65 in most cases. The current cost to taxpayers via Medicare wasy $386 billion USD in 2008. In 2007, there were 43 million enrolled, which means that the federal government is paying roughly $8,976 per medicare enrollment per year. For comparison, average private insurance per enrollment is under $5,000 per person, currently.

I believe a lot of the issue with Medicare, and any federal program is simply the size of it. Unlike most other socialized systems, they are established and implemented in much smaller countries and locations. America is a country sprawling well over 300,000,000 citizens, spanning great lengths of the scale in terms of race, wages, and needs - more so than any other country in the world. Because of the size of our nation, a federal, one-size-fits-all system simply cannot work because it doesn't allow balkanization to fit the needs of peoeple. In the case of a federal program, an exemption has to go for hundreds of millions of people because there's only one company (the Govt.) administering the benefits. I believe this is the recipe for disaster.

Having worked for a city and been the receipient of state-run pensions and healthcare, I believe this is a certainty. Let me bold this for emphasis to help those understand the system: No government employee uses ANY public benefit. Not one. Obama does not have Social Security. He waived that right as soon as he became a state senator. If we had a Govt. public healthcare option, he would not use it.  Postal workers don't use it either, they have their own unions pushing for their own pensions and healthcare. Don't you consider that kind of....Odd? What it really comes down to is competition - even if your going to have something publicly funded, its better to have dozens of companies or states compete rather than 1 monopoly. States can administer healthcare and pensions better than the feds do - Again, I've been in the system, it's fantastic! Since this is the case, why would we not want to balkanize the system to enact better competition?

bdbdbd - I can understand the idea of exerting influence. However, do we really need to exert military influence in Europe? What about Japan? Do we need to keep their army under wraps and prevent them from having a greater strategic vision in their homeland than we do? We spend over $700 billion dollars a year on the military, and what is it bringing us exactly? I'm not a hippie (I love war), but I think that we're spending far too much to protect a lot of ungreatful people in a lot of areas, and in some cases, it's doing more harm than good. Furthermore, the cost of what we're doing should be shared far more than it is - Korea, Japan, Germany and Italy all are gaining large benefits from our bases. I don't think they should have as much of a luxury that they are currently being given. I agree we need strategic influence, but I think we can do that without having 56,000 troops in Germany, prepping for a Russian attack, no?