11th-hour filers split on paying more to fix debt

AP News
Posted: Apr 18, 2011 5:16 PM
11th-hour filers split on paying more to fix debt

A debate over the fiscal future of the U.S. that has engulfed Congress, the Obama administration and policymakers in Washington is resonating with everyday Americans in one way or another as they size up their tax bills and refunds.

As they mailed off their last-minute returns Monday at post offices across the nation, some told The Associated Press that they were willing to pay more to help reduce the deficit, while others doubted they could bear paying higher taxes to help the cause.

Mike Kleinberg, a 29-year-old electrical engineering doctoral candidate from Philadelphia who expects an $86 federal refund, said he'd be hard-pressed to squeeze anything more out of his already modest income.

"The deficit right now is so far off my radar," said Kleinberg, waiting to mail his return at Philadelphia's main post office. "Taking more money to pay some abstract deficit would be hard to justify right now."

But 60-year-old Martin Rich, at the post office in Hartford, Conn., said he wouldn't mind paying a little bit more.

"We've got to do something," said Rich, a facilities management consultant from Avon, Conn. "We've all been in the same condition where we owe credit cards. You can default as an individual, but as a country it would be unconscionable, as far as I'm concerned."

Officials have said the U.S. will reach its borrowing limit no later than May 16, risking an unprecedented default. The government is likely to run a record $1.5 trillion deficit this year, and lawmakers are negotiating an increase in the nation's $14.3 trillion debt ceiling.

Also Monday, Standard & Poor's Ratings Service lowered its long-term outlook on the country's debt, saying the U.S. could lose the top investment rating in the next two years.

In an AP-GfK poll released last week, 29 percent of respondents said the government should hike taxes to eat away at huge federal deficits. About 62 percent said they favor cutting government services instead.

Asked Monday whether she personally would be willing to pay higher taxes to reduce the red ink, 75-year-old Odell Martin said she can't afford to on her fixed income.

"I'm living paycheck to paycheck," said Martin, a retired teacher's aide in Hartford who noted that she owes on her taxes this year. "I just can't see where I would get more tax money from."

The Rev. James Meador Jr., 63, a retired truck driver and a Baptist preacher from Kansas City, Mo., said he was not willing to pay more. This year, he said he owed about $400 to the federal government and $600 to the state.

"If I was Donald Trump I wouldn't care. If I was George Bush or all of them down in Texas who own oil I wouldn't care, because they've got plenty of money," Meador said at the city's post office at Union Station. "I could have used that $1,000 to pay real estate tax or something."

At the Civic Center post office in San Francisco, Bob Huynh said everyone should chip in to reduce the deficit.

"It's just like a household budget; you need extra income to pay down your debt," said Huynh, 37, who works in corporate human resources. "Both parties are at fault for not recognizing they need to do both, raise taxes and cut spending."

Nathan Pittman, a 33-year-old political consultant waiting to mail his taxes in Little Rock, Ark., also said he'd pay more.

"Our economy's in a tough place and it's going to hurt to get us back where we need to be," Pittman said. "But I think people need to just realize that and be willing to sacrifice a little bit to get our country back on its feet."

Internal Revenue Service statistics show the nation's wealthiest taxpayers shelled out 17 percent of their income in 2007, the most recent figures available, compared with 26 percent in 1992. For all filers, the average federal income tax rate declined from 9.9 percent to 9.3 percent, data show.

But overall, 45 percent of U.S. households will pay no federal income tax for 2010 because there are so many tax breaks, according to the Tax Policy Center, a Washington think tank.

This year, federal tax filers got three extra days to submit their returns because of a District of Columbia holiday last Friday on the traditional deadline, April 15. The district observed Emancipation Day, commemorating President Abraham Lincoln signing a law ending slavery in Washington.


Contributing to this report were Associated Press writers Heather Hollingsworth in Kansas City, Mo., Dave Collins in Hartford, Conn., Jeannie Nuss in Little Rock, Ark., and Jason Dearen in San Francisco.