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April 22, 2001

Midstream: Asset Allocation, for Income Taxes

By JAMES SCHEMBARI

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My family loves to chuckle over a photograph of me sitting at a table, doing our taxes. You can just see me over the top of my wife's belly, because she took the picture from her hospital bed the day she delivered our eldest son, Antonio. It was April 15, 1990, and both my son and my taxes were due.

Tax day is now greeted with mixed emotions around my house.

I hate paying taxes, and having to finish my return in the hospital on the day my son was born because I procrastinated doesn't describe my resentment. When I figure out how much I pay in income, property and sales taxes, as well as fees to use the beach, fees to use the Little League fields and fees for a dog license, it takes my breath away. I have $20,000 invested in a Treasury bill, which is exempt from state income taxes, and the $66 I'm saving this year gives me more satisfaction than I know is healthy.

I realize that I get a lot in return for some of my tax dollars, like the education of my four children. I also understand the thought behind what Oliver Wendell Holmes Jr. once said: "Taxes are what we pay for civilized society" although "Survivor: The Australian Outback" should give us a chance to rethink that thought. My wife, Christine, also says that taxes are the price of the good life and that I should just stop whining.

No.

The Tax Foundation, a nonprofit research group in Washington, estimates that people work until May 3 each year just to pay their various annual tax bills, so why do I have the feeling that that is when I'm just getting started on mine?

The Internal Revenue Service, because it doesn't ask our ages on its tax forms, doesn't know how much baby boomers pay proportionately in taxes. Considering that we are in our prime earnings years, we are obviously not shirkers. And like every other generation that has tried to raise a family, save for college, save for retirement and still go out to dinner once in awhile, we are a bit sensitive about taxes.

"Everywhere you turn there's something," said James Westerheid, 53, an engineer at Texas Instruments in Dallas who said he has been audited three times. "There's federal income taxes. They're trying to raise the mill rate on my house. Gasoline taxes really, really bother me, and there's the sales tax. The tax code has gotten thicker and more complicated year by year. I get a headache trying to read that stuff."

Jeri Maier, 53, president and chief executive of Boomers International, which runs a Web site for baby boomers, says she often hears complaints about taxes during chat-room discussions. One comment, she said, was, "I am just sending my cremated body in an urn to the I.R.S. with a note saying `THERE now you've got that too!' "

Ms. Maier said that "a lot of people who are making good money feel that they pay a lot of taxes and don't get a lot of benefits back; they are frustrated."

The I.R.S, of course, realizes that. To show us where our money is going, and what benefits we indeed are paying for, the agency has put online an interactive version of the pie chart that it prints in tax instruction booklets (www.irs.gov/tax_edu/tax_rcpt

/index.html). Called Tax Receipt, it lets taxpayers type in the amount of federal taxes they paid last year and learn how that money was spent. Since Feb. 1, the site has received about 37,000 hits. It has been up since 1999, and in the words of an I.R.S. spokesman, "it's kind of neat to see."

It is fun. I plugged in my 1999 tax bill (calculations for 2000 are not yet available on the site) and found that I paid $11,552.21 for Social Security and $8,036.32 for national defense, two of the largest expenses. Interest on the national debt cost me $6,529.51, although I got some of that back with my T-bill. Assistance to the poor, like food stamps, child nutrition and earned income tax credits, was $7,031.78.



Although the site also lists how many billions are spent on categories like public schools, military salaries, space programs and Amtrak, I wish they had been further broken out into individual tax payments.

Amtrak, for example, a service I love and use for visiting family in Washington, is at the bottom of the list, receiving $200 million. I would gladly agree to give it more of my taxes. I'd also pay more for schools and the food stamp program if I could shave a bit off national defense and debt payments.

Wouldn't it be nice to have such choices? That may be impractical, but it would make April 15 a bit easier and do wonders for my mood at Antonio's birthday party. 

James Schembari is an editor at The Times. His column on the prime earning, spending and striving years appears the fourth Sunday of each month. E-mail: jimschem@nytimes.com.

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