A few years ago I saw a guy on FOX News talking about the American Tax Rate and how out of control it is.
He made the point that if Americans had to pay the taxes themselves, like small business owners do, they would overthrow the government.
When the taxes are taken off your check before you get it you become conditioned to accept it. But when you own a small business, and you save your money, then every three months have to write a check to the government for thousands, or if your successful TENS of thousands of dollars you start to realize what a huge chunk of your income the IRS keeps.
He pointed out how conditioned we are to be excited to be getting a big "refund" in April, when in reality we should be angered that for twelve months the government had use of OUR MONEY via an interest free loan.
ANYWAY, long story short (too late, I know) the most interesting point this guy made was how we all think we pay 25 - 35% of our income in taxes, but he showed how we actually pay WELL OVER half our income in taxes.
The government, particularly local government, is aware that raising the tax rate any high will cause an uproar, so for the last 20 years they increase your taxes via fees, registrations and various usage taxes.
When you think about it, your money is taxed when you earn it, and it's taxed when you spend it. If you save it, the interest will be taxed. If you give it away, it get's retaxed (unless it's to a non-profit organization).
We have "fees" now for the very things our taxes are supposedly paying for to begin with (for example, many communities now charge homeowners a fee for trash removal).
Here in Wisconsin they are planning on hiking auto-registration fees every year another $20.00 from the $45 it's currently at to $65.
Sin taxes on cigarettes, booze and other things are insanely high (and by the way states are up in arms over what to do about shrinking cigarette tax income since smoking is declining year after year, they'll be finding that lost income somewhere!).
Gas taxes add a ton of money to every gallon of gas you use.
So on and so on.
So what's your REAL tax rate? 60% maybe 65%?
It's crazier than you would beleive.
I've been giving this a lot of thought lately, and would like to start this thread as a place for anyone to insert an example of a fee or tax they know of. Over time I'd like to compile a nice chart and figure out what the average person really pays in a year in taxes.
Now, I would consider a tax to be any tax, registration or fee that goes to a government branch of local or federal origin.
Here's the one that made me finally start this thread.
Our local government is passing a $13.00 rental car tax to help pay for road repairs (something our gas taxes (which are among the highest in the nation) is supposed to pay for).
Everyone who rents a car will now pay $13.00 more in taxes to rent a car in Southeastern Wisconsin.
One thing that has bugged me for a long time is the "business phone". I know this is not a government tax, but it I consider it a business tax. I can have a phone with basic service in my house for about $30/month. The same service at my business is $75. We use the phone at home a lot more than I use my business phone. It sucks.
A few years ago, I got a bill for $45 from my local County government. Aparently, this is a yearly fee that that goes to the local government because I have a security system at my business. The problem is that occasionally, a security system gives a false alarm. The alarm causes police and or fire to respond to check it out.
I called and told them that this fee did not apply to me because my system calls me at home, not them. They said it does apply because of one time that I tripped the alarm as I was leaving the shop and it went off. A neighbor heard the alarm and called the police.
If we pay the $45 we get three free false alarm calls/year. After the three, it was $75 per alarm. If I didn't pay the $45 (which I never have) it would be the $75 for every alarm.
When I was talking to the emergency communication center director about this, I asked him if they've ever had a live person call to report something that turns out to be nothing. He said "of course we do". I then asked him if they are going to start charging every person that calls in with a false alarm. He was too arrogant to even consider how unfair that was.
