Hook: Why Tax Day Is My Least Favorite Day of the Year

Today is my least favorite day of the year. It’s April 15 – Tax Day.

Today is the day when federal individual income tax returns for calendar year filers are due. What that means in plain English is that most of us have a deadline tonight. According to the IRS, our income tax returns are considered filed on time if the envelope is properly addressed, postmarked and deposited in the mail by the due date. That due date is today, April 15.

Now, I’m not a big fan of taxes, period. Any kind of tax – income, sales, property – you name it and I have an aversion to it. 

I despise income taxes because of the tons of paperwork that are associated with them. The IRS estimates that the “Average Taxpayer Burden for Individuals” based on “current statutory requirements as of December 1, 2024, for taxpayers filing a 2024 Form 1040 or 1040-SR tax return” is 13 hours. 

13 hours of your life that gets spent justifying what was already removed from your paycheck over the course of the year. The simple question is: why do they need an income tax return at all if they already know how much I’ve given? Well, because of all the possible deductions and adjustments to your taxes based on a variety of factors about your life, that’s why. Sort of makes a flat tax somewhat appealing, doesn’t it? 

And since I am considered a “business” filer, that estimated taxpayer burden goes up to 24 hours. An entire day of my life with no sleep just to fill out tax forms. Sounds a bit ludicrous, don’t you think? Which is why I long ago passed that job off onto an accounting firm. Which, of course, gets paid to compile, complete and file my taxes.

The bonus is that they are so good at it, that it technically doesn’t cost me anything. Since they are experts at the process, they find things that I used to miss – because there are hundreds of pages of instructions and guidance between all the forms and schedules I’m required to complete – and are able to reduce my income tax burden such that the fee they charge is less than the amount that they saved me in taxes. So, it’s a win-win. I pay out the same amount as I would have if I did my own taxes, I save the time and agony I would have wasted on the forms, and I help the economy by providing work for others. 

After income taxes, sales taxes are an issue for me for several reasons. First, try explaining to your young child, who has been diligently saving their allowance and holiday gifts for that special something, why that special something costs more than that $25 price tag. 

In addition, the odd way sales tax is allocated in Pennsylvania means large retailers must employ extra employees specifically to code every item they sell as either taxable or non-taxable. Which raises the prices I pay for those goods – all to appease the state.

Lastly, sales taxes are collected by the thousands upon thousands of small businesses in the state – many of whom are not set up to properly account for that tax collection. Which means not only extra paperwork for them, but the potential headaches and legal issues if they are not doing it correctly because it’s such an arcane system.

Then, finally property taxes. Which locally are an issue for a reason beyond just the usual concern that they are fairly and accurately assessed across all properties. In other words, as with most things in life, if you can afford a lawyer to question the value of your property assessment, you stand a chance of paying lower taxes. 

But as we all know here in Happy Valley, the largest employer and property owner only pays small in-lieu-of fees instead of property taxes. Meaning someone – that’s you and me – has to make up the property tax revenue. And as the State College Area School District continues to show, those taxes for us just keep going up and up.

So, maybe you can see why today is my least favorite day of the year. 

But here in Pennsylvania, as in 41 other states around this country, I have an additional reason to dislike Tax Day. Not only do I have to file federal income taxes, but I have to file state income taxes as well. And, even worse, local income taxes. 

According to an article published by the AP a little over a week ago, there are eight states that charge no personal income tax: Alaska, Florida, New Hampshire, Nevada, South Dakota, Tennessee, Texas and Wyoming. In addition, the state of Washington only taxes certain capital gains income over $270,000. In other words, no income tax for me – and probably you. 

The article went on to note that no state had eliminated its personal income tax in 45 years. However, two states – Mississippi and Kentucky – are considering doing so. 

Now, here’s something interesting about those states that have no personal income tax: Over the last 50 years, from the 1970-2020 censuses, they are above the average for the fastest-growing states by percentage of population (see chart below). The lone exception is South Dakota. 

According to the U.S. Census Bureau, from 1970 to 2020 the United States had a population growth of 63.1%. We grew from 203 million people to 331 million people. But, Alaska grew by 144.2%. Florida by 217.2%. Nevada by a country-leading 535.2%. Texas by 160.3%. Heck, even little New Hampshire grew by 86.7%.

The nine no-income-tax states contributed more than a third of the entire population growth in this country over the last half-century. 

Well, what about good old Pennsylvania – with its state income tax AND some municipalities with local income taxes?

Over the last 50 years, Pennsylvania is the second-slowest growing state in the U.S. at 10.2% population growth. We were beat out by West Virginia at 2.8% growth. OK, technically Washington, D.C beat everyone with a -8.9% population growth, but as of this moment they are still not yet classified as a state. 

Now, income tax is obviously not the only factor in determining which state people want to move to and live in, but it’s pretty clear that states without income taxes are more popular if we use population growth as an indicator. And with popularity and people comes many things – business and industry and tourism and money to supply all the state’s needs that other states pay with income tax revenue. 

The downside, of course, is there are more people. 

The question then is, are we as Pennsylvanians happy with filing not one, but two, and sometimes three income tax returns on Tax Day, or would we like the opportunity to see if not doing that was an attractive option for not only ourselves, but many other people as well?

I mean, we have a beautiful state with beaches and mountains and plenty of history, might a little growth be a good thing as well, and would no income taxes spur that growth and replace the revenue? I know I’d be happy if we tried!