The Experiment: Keeping Track of Every Penny of Tax is for the Birds


NBC’s show “The Biggest Loser” pits a crew of skinny people trapped inside fat bodies against each other to compete for a quarter-million-dollar prize and bragging rights of being the next reality TV sex symbol (or not).  I can understand a fat person putting themselves through this kind of discipline hell, avoiding elimination, and doing it all under the glare of studio lights and steady-cams.  I lose weight simply to be more healthy and reduce the amount of surface area to expose my great-whiteness when beaching myself at the ocean.

For the month of September, I subjected myself to the home version of a reality show where I was the loser counting every penny I paid to the government.  Local, state, and federal.  At the beginning of the month, I was a fat, happy person who didn’t count pennies, paid my taxes, and complained at the polls like everyone else.  By the end of September, I didn’t find my inner-skinny-person fighting to escape from a fat body, and neither did I expose any surprises about the taxes I paid.

Overall, my effective tax rate for the month was 36.32%.  That means I officially stopped working for the government at 9:31pm, September 10th.  At that time, I was unpacking from a business trip to Cleveland, and I forgot to celebrate the event.  The rest of the month was mine.

The biggest chunk of tax was the 32.07% that was withheld or matched by my employer out of each paycheck.  The rest was a combination of various sales and property taxes I pay each month, or each time I do anything taxable, like breathing or eating.  I separated these into four categories:  fuel, groceries, meals, and other/everything else.  By far, the biggest share of tax was on fuel, a whopping 26.25% tax rate.  It should be less than that, but I think those Kroger points we use to reduce the price per gallon must drive up the rate.  There’s no discount on the combined $0.495 per gallon we pay to Caesar to drive our cars (that or I miscategorized something after I captured the tax).

At any rate, 6.2% of the total tax I paid was for gas.  And we never go anywhere.  A few trips to the airport, a weekend at Pine Mountain, and the rest was driving hither and yon within a square mile of my bed.  No commuting for me or my wife, and the kids’ school is less than 3 miles away.

Groceries were far less at 5.34%.  This sounds about right, since most common foods are exempt from the 4% Georgia sales tax—we only pay the county tax (3%) and Special Local Option Sales Tax (SPLOST), which is an additional 1% we’ll be paying here in Houston County until 2018 (when I’ll be old and decrepit).  Most of our groceries were taxed at 4% instead of the usual 8% exacted by the tax collector.  Of our total non-payroll tax load, 11% was paid on groceries.  That’s a lot of bananas for a little bit of tax, comparatively speaking at least.

We try to limit our eating out, but we generally fail.  That fat person who consumed the skinny person inside me likes restaurants.  And there are times when I’d rather have someone else be the short-order cook when the kids change their minds five times after the meal has been prepared and placed lovingly in front of them.  We are very fortunate to live in a place where restaurant meals are not taxed at a higher rate than everything else.

If you order a burger in Minneapolis, for instance, you’ll pay 10.775% extra.  Chicago will save you a whopping .005% (if you round up it means nothing at all unless you order a magnum of Dom Perignon).  Virginia Beach is an entire quarter of a percent less at 10.5%.  In central Georgia we pay 8%, but we don’t have 18% automatically tacked on to the bill, like many restaurants in New York City.  My average tax rate was 7.19%, but that’s because I tip well at sit-down restaurants.  No tips at the frozen yogurt stand though.  Only 3.8% of our tax load was eating out.  We are nearly hermits, but we draw the line at roadkill.

The “all other” category included all kinds of taxes, like property tax on the house, sales tax on the car (amortized into the loan), license plate and registration (it’s a tax), clothes, household stuff, and practically anything else for which we forked over a heaping serving of cash to the government.  This ended up being 79% of all the non-payroll taxes we paid, but the average rate was only 3.81%.  I used “everything else” we spent money on as the denominator in calculating that ratio.  Everything else, less our charitable giving and payroll taxes, that is.  I guess we order a lot of stuff over the Internet, which is a godsend since most of it is still tax-free (curse you Amazon for giving in!).

I think part of the 3.81% “everything else” rate is simply because I was too lazy to calculate the specific items from which I captured the tax.  I use budgeting software to track our expenses, and it’s hooked into our checking and credit card accounts.  Normally, all I have to do is click and drag the items that show up in the daily list to predefined categories.  In September, we had to collect every receipt, put them in a folder, and match up the receipts against the items as they show up—then separate out the taxes.  It was a major pain in the tuchas.  I likely got in a rush and missed some items.  I don’t apologize for doing it.  It’s my money after all.

In the end, the biggest lesson I learned was that calculating an entire month’s tax paid to the penny is for the birds.  Or for bookkeepers with an incurable case of OCD and a numbers fetish.  I have neither (okay I do have the OCD, just not with numbers).   My wife marked the blessed occasion when we stopped matching receipts with tax amounts with a simple question:  “do I still have to put receipts in that folder?”  No.  It’s over,  thank God.

Without further tribulation and bother, I can now safely assume that the first ten days of most months belong to Uncle Sam and his brothers and sisters.  This is in no way comforting, but I might mark the moment when I’m tax free some month with a celebratory drink.  It will have to be recovered rain water though, because they tax soft drinks, wine, tap water, bottled water, and water from our water cooler, and that would spoil the moment.

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