x Abu Dhabi, UAETuesday 25 July 2017

Tea parties, black cats and the US tax wonderland

In America, you end up feeling that you have to pay for everything out of your own pocket.

Yesterday, as I was sitting in my farmhouse in upstate New York, the telephone rang. It was a message inviting me to participate in a "Tea Party". To celebrate July 4 this weekend there will not be just fireworks - there are also some 1,300 "Tea Party" events planned across the country. The reference is to the Boston Tea Party of 1773, when opposition to a tax on tea imposed by the British parliament led Bostonians to hurl tea boxes into Boston Harbour. Since the British were sent packing it is no longer her majesty's taxes that are the focus of this Independence Day's wave of popular ire: it is the taxes Americans impose on themselves. If I had received a phone call like this when I first moved to the US 10 years ago, I would have found it laughable. At the time, nothing irritated me more than right-wing Republicans, whose economic platform seemed to consist of railing against taxes and cutting "big government". I attributed their political stance partly to selfishness: an unwillingness to care for the poor and needy. And partly to ignorance. After all, nobody who has ever stepped on a French high-speed train, or had a relative cured of cancer free by the National Health Service, or even posted a letter in London knowing it will arrive without fail the next day, can dispute the fact that in certain sectors government control can work very well indeed. But it is now 2009, and I have lived in the US on and off for more than a decade. My husband has a job here, we pay taxes and have bought a house. I have three children and earlier this year I had to have a mastectomy, so I have also had first-hand experience of the healthcare system. I won't go so far as to say I now support these "Tea Party Events". But I will say that rather than seeing them as a manifestation of nuttiness, I now see them as a reasonable response to the experience many Americans have of their government. Take our own situation. When you combine the taxes we pay to the federal government, with those we have to pay to New York State, plus a self-employed tax my husband has to pay for owning his own company, our marginal tax rate stands at 42 per cent. We also pay about US$12,000 (Dh44,000) in property taxes, which goes to the local government. On paper, it doesn't look too bad. In England, the top taxation rate is 50 per cent, while in my home country, the Netherlands, it is 52 per cent. Yet when I try to figure out where the money goes, even I, who never thought much about paying taxes in Europe, start to feel aggrieved. To start at the most basic level: I have to pay to have my rubbish collected. When we first moved upstate in April last year, I searched the internet and e-mailed the local town to find out which day our rubbish, and which day our recycling, would be collected. I did not think there was a developed country in the world - and not many underdeveloped ones either - where rubbish was not collected. Only to find out that here, one hour outside Manhattan, that is just what happens. In America, you end up feeling that you have to pay for everything out of your own pocket. When I drive to New York City, I pay tolls on the road and to get across the bridge into Manhattan. Education is not always free, either: when they turn five, my children will be able to go to a state school. But it can be hard to get in, and many children end up having to go to private school anyway. And until then, there is no local, subsidised crèche. With so little to show for them, the 42 per cent we pay in taxes is beginning to grate. Nor does the US tax collection machine help ease the pain. The Internal Revenue Service seems to epitomise some of the failures of American government. I pay taxes in both the UK and the US. Once I know my income and expenditures and have collected together my receipts, the UK tax return takes me about 20 minutes to fill out. If I have a question, I call a number and someone explains to me what to do in simple terms. The US tax return I have never yet succeeded in filling out. It is too complicated. Like millions of other Americans I end up having to pay a specialist a few hundred dollars to do it for me. One such specialist, a high street chain, is called H&R Block. In a symptom of the complexities of the US tax code, H&R Block themselves got into trouble a couple of years ago for filling in their own tax return incorrectly. However, while I sympathise with anti-tax and anti-big-government protests, I feel they miss the point. Americans may fear government-imposed universal health care, but private health care is monstrously expensive and hardly a model of efficiency either. It is bloated with administrative staff and costs, and faces many of the problems experienced by state-run systems. When Deng Xiaoping talked about the merits of socialism versus more capitalist systems, he said: "It doesn't matter whether the cat is black or white, as long as it catches mice, it's a good cat." In America, political energies seem to focus mainly on the colour of the cat. Sophie Roell is a New York-based journalist. She has contributed to The Times, the Financial Times, and The Wall Street Journal among others. She has a Master's degree in East Asian Studies from Harvard University