Unhappy Returns : How Government Dissects Federal and State Taxes

Where does it all go? It's a common question this time of year, with Friday looming as the deadline for filing income tax returns.

In recent years some tax-payer groups and politicians have suggested modifying our tax structure. In 1992, for example, presidential candidate Edmund G. (Jerry) Brown proposed replacing the current tax brackets with a 13% flat tax and a 13% value-added tax, which would effectively be a national sales tax. All tax deductions would be eliminated except for home mortgage interest, rent and charitable donations. The idea was so simple, he said, that anyone's taxes could be figured on a postcard. The idea got nowhere.

Meanwhile, the Washington-based Tax Foundation each year continues to designate "Tax Freedom Day," the day when the average American would have earned enough that year just to pay his federal, state and local taxes. In 1950, the group estimated, the average person had to work until April 3 to pay his taxes. Last year, the day came on May 3 for workers nationwide and May 7 for those California because of the state's relatively high state and local taxes. The foundation is keeping Tax Freedom Day 1994 a secret until Thursday. Until then, we can only keep working.

The Cost of National Defense The federal dollars devoted to national defense have fluctuated over the past 50 years, reflecting the Vietnam War years and the end of the Cold War. Currently, the United States spends 18% of its budget on defense. 1940: 17% 1950: 30% 1960: 49% 1970: 39% 1980: 23% 1990: 24%

Getting Help Need help with tax returns? Or a post office that will be open until midnight this Friday, April 15? Here are some places taxpayers can call or visit to get answers t questions, obtain forms and find out where to mail their returns at the last minute. IRS Tax Help Hot Line: (800) 829-1040, staffed between 8 a.m. and 5 p.m. Bilingual assistance.(800) 829-4672. Federal Tax forms only: (800) 829-3676. Nearest post office that will be open until midnight: (213) 586-1423 IRS offices offering taxpayers walk-in assistance only: 300 N. Los Angeles St., Los Angeles; 9050 Flair Drive, El Monte; 6230 Van Nuys Blvd., Van Nuys; 1100 Wilshire Blvd., Room 7201, West Los Angeles.

Your Federal Tax Dollar* The current federal budget totals $1.5 trillion, with almost one-fifth going toward Social Security. About $203 billion covers "net interest" to pay off the national debt. National defense: $279 billion/18%

Health: $255 billion/17%

Income security**: $214 billion/14%

Social Security: $320 billion/21%

Environment: 1%

Transportation: 2%

Commerce/housing: less than 1%

Net interest: $203 billion/13%

International affairs: 1%

Agriculture: 1%

Other: $151 billion/10%

Your State Tax Dollar* California's current budget totals $54.4 billion, with $39.3 billion in the general fund, along with $15 billion in special and bond expenditures. The general fund is detailed below. Health and Welfare: $13.6 billion/35%

K-12 education: $15.2 billion/39%

Higher Education: $3.6 billion/9%

Prisons, Youth Authority: $3.4 billion/9%

Other: 1%

Natural Resources: 2%

Tax Relief: 1%

Courts, Legislature, General Government: $1.8 billion / 5% ** Includes unemployment compensation, retirement and disability insurance for federal employees. * Totals do not equal 100% due to rounding. Source: Tax Foundation, California Governor's Office, U.S. Postal Service

Researched by STEPHANIE STASSEL

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