This is the companion blog to the MyGovSpending.com website.





Tuesday, July 5, 2011

The Tax Man Cometh

This year 38%  of America will be funded via coercion.

The tax man cometh. This month and every month. This day and every day.

Citizens obediently dish out the shekels in the certain knowledge that if they refuse, the state will respond with serious ugliness. 

Take Kaleesha Cashstrapt, a woman with a husband and two kids. Together they expect to earn a very typical $75,000 in cash income this year. Government will pump $30,000[1] directly and indirectly from her family into its own wallet.  

Government has punctured Kaleesha's finances with a variety of intravenous tubes. Income taxes - often thought of as a big, brazen pipeline - account for only 14% of Kaleesha's total tax.  Social Security and Medicare suck out another 37%.  Sixteen percent drips out in deceptively small streams via sales and other taxes on everyday purchases. Then Kaleesha's family ultimately pays all business taxes through higher prices, lower wages, or smaller returns on stockholdings. That's 20%.  Property taxes make up most of the rest.

But we're still missing a big piece.  Borrowing is simply taxes deferred. So add another 33% to that tax burden.

Note that the rich pay more.  Good estimates show the top 4% of families by income paying 32% of all federal, state and local taxes. As a portion of economic income (which includes more than cash income) the non-rich pay 26% of their income in taxes. The rich - those earning above $200,000 - pay 30%. 

Clearly, the threat of force is necessary to collect taxes. Government is expected to spend 38% of GDP this year. So 38% of the economy is coercively based. America's founding ideals appear forgotten. George Burns may have inspired the public sector when he cracked, "Sincerity is everything. If you can fake that, you've got it made".

With 38% of citizens lives deemed public property, raising taxes may no longer be the path of least resistance. 

Finally citizens are paying attention to public finances. Rolling back the concentrated force of government won't be easy. Nor will taxpayers ever be rubes again.

The tax man will never goeth away. Nor should he. In time, however, he may be satisfied little more than a simple cup of tea.

(This piece was first posted in the April 2011 issue of Smart Girl Nation.)



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