How to Create the Illusion of Low Taxes

[dan2100]

http://www.thefreemanonline.org/headline/how-to-create-the-illusion-of-low-taxes/

Comments?

[Christopher]

Dan,

I had previously calculated 30% figure for taxes, which includes income tax, double-tax (tax on income earned to pay tax), and sales tax. Thus, a $300 television actually costs $400. But I did not think about corporate taxes inflating initial product prices. The article suggests 27.5% for corporate-side taxes should be in addition to 30% base consumer tax. Good point. Maybe that's a little high - the article highlights that industry matters, and taxing corporations is taxing the consumers of those industries.

Also, the idea of rising debt and interest paid to that debt suggests that the efficiency of our tax dollars is also diminishing. It's not clear how that figures in, but clearly it does.

So I'll be conservative and say that we pay 40% of our income to taxes minimum (for those middle-class and above). Scary number.

* correction: my initial 30% actually should be 45-50%. That's taking a 30% tax rate, 30% tax on the income that goes to paying taxes (roughly 8%), and 9% sales tax. So 45% + 10% = 55%. But there are some justified expenses such as infrastructure, national security, etc. that are paid by this 55%. So I'm probably only being ripped off, oh not more than 40% :0

Edited May 25, 2010 by Christopher

[dan2100]

Dan,

I had previously calculated 30% figure for taxes, which includes income tax, double-tax (tax on income earned to pay tax), and sales tax. Thus, a $300 television actually costs $400. But I did not think about corporate taxes inflating initial product prices. The article suggests 27.5% for corporate-side taxes should be in addition to 30% base consumer tax. Good point. Maybe that's a little high - the article highlights that industry matters, and taxing corporations is taxing the consumers of those industries.

Also, the idea of rising debt and interest paid to that debt suggests that the efficiency of our tax dollars is also diminishing. It's not clear how that figures in, but clearly it does.

So I'll be conservative and say that we pay 40% of our income to taxes minimum (for those middle-class and above). Scary number.

* correction: my initial 30% actually should be 45-50%. That's taking a 30% tax rate, 30% tax on the income that goes to paying taxes (roughly 8%), and 9% sales tax. So 45% + 10% = 55%. But there are some justified expenses such as infrastructure, national security, etc. that are paid by this 55%. So I'm probably only being ripped off, oh not more than 40% :0

Even more frightening is figuring inflation into the mix. Inflation is another hidden tax -- though, in this case, the wealth is being redistributed from holders of money in general and creditors to debtors with the large debtors (such as the government itself) getting a larger than proportional take.