I started thinking, because it seems clear enough that when mean income is down over $4,000 a year, and falling, and gas has doubled in price in four years, and health care costs are up over four years, AND food costs are up close to 25%, that people would have voted with their pocket book, and changed course. That didn't happen, in fact, the opposite happened. The question I have heard is why? I believe the answer is two fold. First, most people do not think they pay too much in tax. And second, they believe government is a bottomless pool of money.
I think it has been a concerted effort by the ruling elite, on all sides since the early part of the last century to hide taxes, and to pick on small groups. You may be confused, how can government hide taxes? Here's how:
Income tax. Each time we receive a paycheck we look at the amount, and deposit it in the bank to pay bills. How many times have you studied the stub to see the withheld tax? FICA, Medicare, Income taxes, unemployment taxes, and some local taxes all come out before you see the total. Then you also have the payroll tax that your employer pays, so he can employ you. You don't even see this, but if it were not there, your employer would have more money to pay you.
Property Tax. Property taxes are assessed against houses. If you have a mortgage, then there is generally an escrow account. Your total monthly payment is the principle, the interest, and a payment to escrow. When your property taxes are due, the lender writes a check to your government taxing agency from that escrow account (your money). Most people only worry that they can afford the monthly payment, and in our minds we often have a disconnect that a chunk of it is paying a tax. And this tax seems to grow yearly, regardless of property values, as politicians assign a value to your property, whether or not it is realistic. In my taxing jurisdiction, schools can not lose money, if taxes collected go down, they can force, without a vote the rates to go up. Remember, government should never have to do with less.
Excise Tax. If you have a smoke, drink a drink, put gas in the tank, or even buy tires for your car, you are being taxed. The tax on a pack of cigarettes goes as high as $3.76 in New York. But there aren't many smokers left, and the money funds stop smoking efforts, and education. If smoking is so harmful, the government is killing its people by allowing it to continue, not only that, but they are profiting from the death of their citizens. At the very least they have isolated a small group of people, and taxing them to death. Of course the rich are the only ones who smoke, right? If you drink, then you are being taxed. A gallon of beer can see up to $1 in tax, and that is before sales tax or other taxes. Wine tax mean is 69 cents. Your phone has excise tax imposed on it. Your tires as well.
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Sales Tax. Quick, what is your local sales tax rate? Some will know, many will not. In the 1950's in my home state of Missouri, sales tax was so small that the state produced little plastic coins you would buy to pay the tax, they were called "mils" because a mil was .001 cent. Sales tax was almost nothing. It might cost you $5 or $10 to pay the tax on your new car. Now dinner for two has more tax on it. Since sales taxes are a percent of the sale, the actual burden is easy to figure. Missouri has gone from .001 cent to now in some locations over 7.5% of the sale. And still they say it is not enough.
The point is, none of these taxes are usually noticeable by the average citizen. They are hidden, or have slowly grown over time. Most of these hidden taxes affect lower income citizens more than rich citizens. And yet last Tuesday, there was a ballot measure to increase the tax on tobacco in Missouri. Taxing the poor. Where was Occupy Wall Street?
The second reason why the election ended as it did; is because of the bottomless pit myth about government. It is real hard to imagine what $1 million dollars is, much less a trillion. But if you get laid off, off you go to get unemployment, and or food stamps. If a hurricane blows through; you ask what is FEMA going to do? Government gets the money they spend in one of two ways. First is taxes. The second is by printing it.
Taxes are collected two ways, either direct taxation, or mandates, mandates is another whole discussion. Taxes take money out of the economy, for the common good. Let's put a number to it. If you are making $20,000 per year (well below the poverty line) and smoke a pack a day, drive 5 miles to work, and enjoy drinks after work and on the weekend, you have paid $1500 per year in taxes, that you don't even know your paying. Sure you get a refund on income taxes, because they collected more than you owe, so they give you back your own money, without interest. That's 7.5% of your income, and that is before sales tax, real estate tax, and property tax. This is where our system lacks fairness.
If the government prints money, then you don't pay right? Wrong. If the government prints money, then each previous dollar is worth less. So prices increase to compensate, it is called inflation. My grand parents bought a small, but nice house in 1952 for under $5,000. The mean price of a house around here today is probably over $250,000. $245,000 in inflation since the 1950's, or over $4000 per year. So if our $20,000 earner owns a modest house, then their hidden taxes go to $5500 a year or 28%. So we are taxing the poor 28%. We could continue, adding sales tax of $1350, and other fees, but you get the point (35% taxes paid). So our leaders tax the poor 35% or more, and Congress and the President say it isn't enough, God only asks for 10%.
Finally, look at the areas less affected by the recession and you will find about 51 of them. Washington DC metro area, and each state capital. Isn't it time we really consider making what we pay in taxes efficient? Isn't it time we consider cutting the cost of government? When is enough enough?
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