For thirty percent of Americans today is no holiday – it’s a reminder that they will be writing Uncle Sam a check based on their hard-earned income over the past year.
Tax Day is a treat for 70 percent of tax filers who will get a refund (though a refund doesn't necessarily mean that Uncle Sam didn't hang on to a lot of what we sent him from our paychecks during the year). This year the average refund is $3,016 up from almost $2,900 last year. This is the highest average refund since 2009 when Americans collected about $3,036 of their own income, according to analysis of IRS data.
However, for those who earned untaxed income through other sources or did not have enough taxes withheld over the year, today is a painful reminder that you’re really not working for yourself but for Uncle Sam. Celebrities offer the most public example of the tax pain felt today.
Here’s a look at three celebrities facing a tough Tax Day in 2017:
The Beverly Hills, 90210 star and daughter of a TV producer went from living in the lap of luxury to turbulent personal and financial times. Recently, the IRS emptied her and her husband’s bank account likely related to $707, 487.30 in unpaid federal taxes for tax year 2014 alone. These are just a taste of her financial issues. In her 2013 book she wrote:
"It's no mystery why I have money problems. I grew up rich beyond anyone's dreams. Even when I try to embrace a simpler lifestyle, I can't seem to let go of my expensive tastes."
The famed star of MTV’s “Jersey Shore” was recently indicted on additional charges including tax evasion, tax fraud, and claiming luxury cars and clothing as business expenses. These follow previous charges of filing bogus tax returns and claiming millions of personal expenses as business expenses.
Jersey Shore ran from 2009 to 2012 and became a cultural phenomenon, opening up business opportunities for The Situation. Unfortunately, he found creative tax strategies to avoid paying.
The over-the-top TV dad from “Chrisley Knows Best” rose to fame for his lavish living and no-nonsense approach to parenting. Unfortunately, he and his wife were recently slapped with more than $700,000 worth of liens by the state of Georgia for not paying taxes in various years while claiming residency there. This is on top of the nearly $600,000 in federal tax liens filed against Chrisley last year. We don’t know whether they’ve been resolved.
There’s no shortage of celebrities including athletes, actors, and musicians who have at best had tax liens and at worst served time in prison for not paying their taxes. Many of these case are tax cheaters who defrauded the government. That behavior should not be tolerated or excused.
However, not every high-income earner defrauds the government or evades taxes. There are plenty of singles and couples who own property, received a promotion, or earned a bonus last year and it bumps up their income. They would not consider themselves rich or wealthy but successful – and for that our tax code penalizes them.
Tax time provides an opportune moment to discuss what the right level of taxation should be for all levels of income. According to a Fox News poll, 73 percent of Americans think the country’s tax system should be reformed. In a Quinnipiac poll, 55 percent of Americans support reducing taxes across the board. Conversely, a new Gallup poll that finds Americans more positive about their taxes this year with only 51 percent viewing their taxes as too high compared with 57 percent last year. Gallup explains though that Americans could be projecting a better tax situation under the new administration:
Although federal income tax laws have changed very little in the past year, Americans are more likely to say their taxes are fair and less likely to say they are too high now, perhaps because a Republican president has replaced a Democratic one. Americans may feel better about their tax situation with a Republican president in office who has pledged to institute "a massive tax cut."
With talk of tax reform as the next big agenda item for the Trump Administration to tackle, there is broad support among taxpayers. Perhaps in the near future, with tax reform that provides much-needed tax relief and simplifies the tax code, fewer Americans will feel the pain from Tax Day.