Thursday, April 18, is Tax Freedom Day this year. That is the day when the nation as a whole as earned enough to pay its local, state and federal taxes. It’s five days later than it was last year, primarily due to the fiscal cliff deal that raised federal taxes on individual income and payroll. Additionally, Obamacare’s investment tax and excise tax went into effect.
That means that the average taxpayer will work 29.4 percent of the year, just to pay his or her tax bill. But not so fast, the Tax Foundation which runs these numbers does not include the amount of annual federal borrowing, which represents future taxes owned.
So you see, celebrating Tax Freedom Day would be like paying your family’s bills that come due each month while ignoring the amount you run up on those credit cards in order to meet all of your obligations.
This year, the federal government plans to borrow another $833 billion, but remember, that is best case. The year isn’t over yet.
If we add in the cost of all this borrowed money, Tax Freedom day will not come until May 9, which is well over a third of the year. Under the old feudal system which was practiced in medial Europe, the lords, who owned all the property, taxed the serfs 1/3 of what they produced and we called them slaves!
It gets worse: In order to calculate Tax Freedom Day, the Tax Foundation divides all the taxes paid by our total national income. Bear in mind, that roughly 47 percent of Americans pay no income tax at all, so the entire tax burden is bore by 54 percent of hard working Americans. The rest get a free ride.
It’s worse still: Americans for Tax Reform Foundation adds in the cost of all those pesky regulations with which we are compelled to comply in order to come up with the number of days the average American must work to pay for the total cost of our behemoth government. Last year, it was a full 197 days, which pushed Cost of Government Day to July 15. That is over half the year!
An Important note: This was the fourth straight year that Cost of Government Day fell in July. Prior to the Obama Administration, the COGD had never fallen later than the month of June.
It is true, many of those regulations are borne by businesses and they don’t effect you directly — but they all effect you indirectly and drive up the cost of everything you use or consume. Ka-ching, Ka-ching! And so it goes. You work hard. You may make a decent salary but at the end of the year you have little or nothing to show for it. Where did all that money go?
We have been poor stewards of a government that was won for us by the blood of our forefathers, one based on equality and personal responsibility.
Your local, state and federal tax bills are just the beginning. Here are some examples of the personal consumer taxes most of us pay each an every day, month and year without thinking:
- Gas and electric bill fees & taxes
- Water and sewer fees & taxes
- Federal, state and local gasoline tax
- TV cable/satellite fees & taxes
- Federal telephone surtax, excise tax and universal surcharge
- State telephone excise tax and surcharge
- Telephone minimum usage and recurring/nonrecurring charge tax
- Waste management tax
- Oil and gas assessment tax
- Air travel: $3.80 per segment plus a security fee and Passenger Facility Charges
- Hotel tax
- Car rental tax
- Road and bridge tolls
- Alcohol and cigarette tax
- Driver’s license renewal fee
- Passport fee
- Nature trail permit
- Watercraft registration & license
- State and national park permits and entrance fees
- New car surcharge
- Luxury & gas-guzzler car tax
- Recreational vehicle tax
- Jewelry taxes & surcharges
- Yacht and luxury boat taxes
- Hunting license
- Fishing license
- Bike license fee
- Dog permit/license
- Sports stadium tax
This is just a sample of the hidden taxes we pay and doesn’t include the countless taxes imposed on businesses large and small. The dirty little secret is that businesses don’t pay taxes. They are passed along to consumers in the form of higher prices.
So take a long, hard look at the real cost of your government. And bear in mind, when you lose the ability to control a fair portion of what you earn, freedom is just an illusion.
The dreaded April 15 has come and gone, but if you think you have finished paying your taxes, you are sadly mistaken.