googlef87758e9b6df9bec.html A Sure Word: Taking a Look at Invisible Taxes

Tuesday, February 22, 2011

Taking a Look at Invisible Taxes

I've worked in banking and financial services for over 20 years. During that time, I've loaned tens of millions of dollars to literally thousands of people. Perhaps my opinion might still be considered anecdotal but let me tell you something that I've noticed in my experience. There are many people out there who don't know how much they make. When asked about their income, they only answer with how much they take home. They know there are taxes being taken out of their check but they really have no idea how much. They can tell you to the penny how much their paycheck is; they just don't know how much it was before the government took it's share.

How exactly did it come about that the government has first dibs on our income? I really don't know. I must say, though, that it's very clever. By taking their cut before we get our check, it's like we never miss the money. How can we miss something we never had? I think that's the intended effect. The government believes it has a right to the first fruits of our labor and if they take it before we even see it, we're less likely to make a fuss.

I've noticed a similar practice in the gasoline tax. Have you noticed gas prices lately? They've gone up a little since Obama took office. The prices displayed on the pump already include the taxes. The average tax (federal & state) on a gallon of gas is 48.1 cents (source) but since it's already included in the price, you don't know how much you're paying for gas and how much you're paying in taxes.

Do you think we need tax reform? Here's one place to start: the government needs to stop taking out taxes before we get out check. Instead, the government should send us a bill each month and we have to write a check to pay our taxes. What do you think would be the result if that happened? I believe people would begin rioting in the streets. I believe that when people see their tax bill is more than their car payment, they'll storm the capital.

The same could be done about the hidden gasoline tax. In KY, our sales tax is 6%. When I buy a cheeseburger for $1.00, I have to pay $1.06. Likewise, the gas pumps could display the cost of just the gas and after we pump 10 gallons, they charge us for the gas and add another $4.81 cents for the tax. If you want to get people outraged about taxes, this would do the trick.

The government hides taxes everywhere. They're in your phone bill, your utility bill, even your cable bill. Do you know how much you pay for cable? You probably do. How much of it is taxes? Do you know? I'll bet you don't. These are stealth taxes. It's the modus operandi of the of big brother. People aren't passionate about the government intrusion into their lives because they can't see the intrusion. The feds like it that way.

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