This finance tip centers on information specific to
USA citizens (the bulk of our audience), but the concepts will apply to
citizens of any nation. The largest cost you have, by far, is the cost
of supporting the enormous, mostly unnecessary, expenditures of your
The national debt is
presently a staggering $9 trillion. And that's just for the stuff we
know about. Let's pretend all of the secret spending and off budget
stuff doesn't exist and then really go out on a limb and say the govt
doesn't cook its books. I know, I know--but humor me.
Let's say the number of taxpayers in the USA is about 90
million (I didn't look that up--it's just a logical assumption and might
even be on the high side).
- 90 million...............90,000,000 (8
- 9 billion.............9,000,000,000 (10
- 9 trillion.....9,000,000,000,000 (13 figures)
Let's divide 9 trillion by 90 million. We can
quickly eliminate zeros, making it 900,000 / 9. That comes out to
$100,000. If you are an American taxpayer, this is your
share of the national debt.
Very little of this debt was acquired
for any useful purpose. Just about all of it was used for purposes not
provided for in the US Constitution--things like further bloating
the already over-bloated federal bureaucracies (parasite-ocracies) and making political pork
paybacks to campaign financers.
Nonetheless, this is your share. Go to your bank's
Website, and use their mortgage calculator to see what it would cost you
to finance your share over the next 20 years. I'm going to go way out on
a limb here and take a wild guess that if your boss docked your pay that
month each month, and did so for no particular reason, you would be less
that overjoyed. If I guessed wrong, I apologize. Send me money too, if
you don't mind.
Now, that $100 grand is just your current debt
(and remember, I am probably understating this by overstating the number
of taxpayers). On top of
that accumulated debt, you have your current tax load.
What is your tax load, anyhow? It's not 10% or
15%, as many people think. They get this incorrect notion by simply
applying their federal income tax bracket to their income. That's not even
close. To get there, you need to take a different approach.
First, add up all of your various payroll tax
deductions. Don't forget to double the SS tax, because the part your
employer "pays" actually comes out of the amount that is available for
paying someone to do the job you do. There is no free ride, here--you do
pay 100% of the SS tax. You pay for one half with a deduction, the other
half with a wage cut. Both come from your pay.
To do this accurately, you need to work with the
dollar amounts shown on your paycheck, not the percentages. That's
because the percentages are based on your pay minus half of your SS tax.
You would be overstating your tax burden and, unlike the govt, we want
accuracy when it comes to math.
If you don't have a figure between 45% and 55%,
recheck your numbers. If you live in a low-tax or no tax state, county, and city, then you may
be under 40%. If you live in a high-tax locale, you may be above 60%.
Also, any overwitholding or underwitholding will skew the results--so
you may need to backadjust based on last years state and federal
Next, consider that the price of every product and service you
buy must cover the payroll taxes of the folks who produced it. This
is what's called embedded tax. How many people did it take to make,
transport, and sell each item you bought last week, on average? Thirty?
I estimate this hidden tax is roughly 20% of your income. This, of
course, varies with individual spending habits. People whine
about losing their retirement savings if we have a national sales tax,
and yet they are already paying it. Go figure (and I don't mean that
I read an analysis of a $400 airline ticket,
showing that all but $40 of it was taxes. That particular example isn't
typical of all airline tickets. But it does show there are a lot of
taxes in what you buy.
Let's say this hidden tax is only 15% and your
payroll taxes are 40%. That brings us to 55%. Now, count up the phone
tax, vehicle taxes, roadway tolls, excise taxes, grocery taxes, delivery
taxes, sales taxes, usage fees, landfill tax, sewer tax, building
permit fees, city inspections, gas tax, fishing permit, hunting license,
property tax, and all of the other taxes you pay. Well, give it a rest
when you reach 100 of these (there are 121 taxes on a single loaf of
And don't forget that the compliance cost of all
the federal regulations. The index alone to the Federal Register was 65,000 pages before the
Clinton/Bush legislation orgy. Regulatory burden is another form of taxation.
Government borrowing is yet another form of
taxation, and it's a huge one. It raises the cost of capital, and you pay that cost
when businesses pass it on to you. So when a politician talks about "tax
cuts" without spending cuts, your taxes may actually go up.
Inflation is also a form of tax. The dollar of
1970 is worth a dime today, or something like that. Inflation is caused
when more dollars are created to represent the same number of goods and
services--thereby causing each dollar to lose value. This way, the govt
pays back loans with cheaper dollars. The creditor gets cheated.
Identifying these various taxes could take dozens
of hours of hard work. This is no accident. The people who pass these taxes don't
want to be seen doing so. If you do enough digging, you will eventually arrive at a figure
that is another 30% to 50% of your income. Let's call it 30%.
So you are now sitting there with only 15% of your
income available to you. From that, you must pay for your food,
clothing, and shelter--plus carry that $100,000 debt you
had no say in creating. No wonder you work so many hours--about twice as
many per year as your counterparts in Germany, Italy, and France.
But wait. Did you "have a say," after all? I think so. These taxes and that debt have been permitted by
the American people. This is the natural outcome when the vast majority
of people vote Demopublican in every Senate,
Congressional, and Presidential election. If the same party wins in
every election, there is no reason for them to listen or care to the
victims of their excessive legislation and irresponsible spending.
guaranteed the average voter's vote no matter how outrageously they
misbehave. That's because they play this cute game of pretending to be
Now, let's see if that is one party or two.
- What do the
Democrats do when they are in charge? Spend money and write more
- What do the Republicans do when they are in charge? Spend
money and write more regulations.
Hmm. Do you see any difference? Maybe in minor
details, but the result is the same--more spending and more regulations.
So if you vote
for one party, you vote for the other. It doesn't matter. Nothing ever
changes, because these folks have no motivation to change. There is zero
competition. We voters keep giving our approval, no matter how
outrageous the behavior or how much it costs.
These folks have taken turns back and forth for over a century
and a half, and what do you have? Basically, you work until
Thanksgiving each year just to pay your taxes, and you have a $100,000
debt. Who is the real turkey, here?
Yes, you do get some services for all of those
many tax dollars. But today, one person in private industry can often do
a job that used to take 10 people to do. In government, 100 people do
a job that should require only one person. So, you are being
overcharged for government services. Such that they are.
The most important thing you can do in any
federal election from now on is refuse to vote Democrat or Republican.
It doesn't matter if you are a life-long Democrat and have been told
this is a "critical election for taking America back" or some similar
lie. It doesn't matter if you are life-long Republican and have
been told the scarey Democrats will ruin the country. Voting for either
party is, frankly, unAmerican. No change will occur, and we'll have the
same plundering as before.
But if 90 million taxpayers wrote in Mickey Mouse, you can bet things would
change. Things will change if you choose any other
party than one of these "two" guaranteed loser(s)--that is, the
Refuse to choose between whether
to have your left kneecap hammered or your right kneecap hammered. This
is not a concept from some other planet. It's simple logic.
Making an actual choice is a thought on many
people's minds. Anger at both sides of our single political party (Demopublicans)
is high. Survey after survey shows people are disgusted with
politicians, and the politicians are finally starting to sweat a little.
Here's why I say these folks aren't so smug anymore.
In late April, I read two interesting bits of news:
- The Democratic Party Leaders are wanting to
seriously flatten the federal income tax. A key part of their plan
is a huge standard deduction that will take millions of Americans
off the federal income tax rolls. They will also eliminate the 10% bracket.
This could be the start of the end for the world's most evil, most
feared, most corrupt, most destructive, and most hated organization.
You know who they are.
- Yet another IRS Commissioner has had enough.
Mark Everson announced, on short notice, he's taking the CEO job at
the American Red Cross. Apparently, he decided there is truth to
"you are known by the company you keep" and wanted some dignity at