[ Dear readers : Lightening took out our internet service for thirty-nine hours. So this post is a day and a half late. Sorry!]
I wonder if the average American has any idea how their federal, state, and local governments cost them? It was a shock to me to sit down and estimate the total cost. I’m going to demonstrate that the average American is paying over 60% and possibly over 70% for their governments.
First a little lead in to today’s story. My post on Tuesday had to do with the possibility of a sales tax on internet purchases. People are upset about and asked for help in understanding why. It seemed to me to be an extension of the sales taxes we already pay. You, dear readers, did not let me down. I want to give a special thanks to Steve Dennis, Cheryl Pass, and Larry Jackson for my edification. But, the most profound comment came from Brian at Frankenstein Government. He said: “Jim, we can not afford more taxes.” He went on to suggest that I read his post and look at the information in it. As often happens in this strange and wonderful world of the blogosphere, as Brian was entering his comment here, I was commenting on his post saying I wanted to use table he showed. And, here it is. Please take a careful look at this table produced by Heritage.org.
You can see that in 2013 the average middle class taxpayer will pay about 50% of their income for federal income tax and payroll tax and for state income tax. 50% is a lot, don’t you think? But, of course we pay a lot of other taxes , don’t we? We pay property taxes and sales taxes and taxes to cover water and sewage and we pay fees fishing and hunting licenses and we pay for license plate tags for our car each year. I’m thinking a conservative estimate for these other taxes would be 5%. That takes our average middle class taxpayer to a sub-total of 55% of their income. I say sub-total because the is a whole lot more we pay in what is called “hidden taxes”.
Hidden taxes include every cost incurred by businesses are passed on to the consumer. Businesses pay federal, state, and local taxes too. Except for what they export, you and I end up paying those costs. Businesses also have enormous cost related to government regulations. And, of course, they pass those costs on to us. There are other hidden costs we pay. For example, how much more do we pay for gasoline because the government mandates that we use gasoline mixed with ethanol? How much more do we pay for food because human and animal food is used to make ethanol? How much more do we pay for electricity because the gov mandates that utility companies use a certain amount of “renewable energy”:i.e., solar and wind generated energy? There are probably many more hidden taxes that I can’t think of right now. But, I don’t think it would be out of line to estimate that we pay from 10% to 15% of our income on these hidden taxes. Even if we use the lower estimate, our middle class taxpayer is paying 65% of his/her income to support governments.
So, is it any wonder that Americans feel their standard of living is decreasing?And, the governments want MORE! Many of our cities and states are looking for new ways to squeeze more out of us. At the federal level, ObamaCare taxes don’t really start hitting until 2014. And, yes they are talking about taxing the rich more, which because many of them are small business owners, some of that will be passed on to us. And, yes they are talking about taxing sales on the internet and taxes to support the UN. Unbelievably, with all these taxes, it is not enough for our federal government. No, they go out and borrow 40% more to spend.
Two commentors on the “internet sales tax” post said they thought this would lead to a federal VAT tax. That, my friends, is the last thing America needs. Here in Venezuela the VAT is 15%. It is a terrible burden especially for the 80% of the people who are just eking out a living. Spain just recently raised their VAT from 18% to 31%. Can you imagine?
Brian at Frankenstein Government is right. We can’t afford any more taxes! The workforce participation rate is the lowest in decades. Fifty percent of Americans pay no federal income tax. How can this go on?
I think if our average middle class American knew that 65% or more of their income was going to one level of government or another, they would revolt. At the very least, they should stop voting for Democrats. So, why aren’t Romney and Ryan using this information as a club to beat the Democrats?
I hope you will share this information with everyone you know. People need to understand what government is costing them. I’m going to put a sticky on this post and in the No. 1 position for couple of days in the hope that more people will read it.
Well, that’s what I’m thinking. What are your thoughts?