Taxed Into Oblivion
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In the United States today, we are being taxed into oblivion, yet it is being done so stealthily that most Americans don’t even realize what is happening. Most people are fixated on federal income tax rates, but the federal income tax is only one of the dozens of different taxes that each of us pay each year. The politicians have learned that people get really upset when income tax rates are raised, so they have found hundreds of other ways to raise taxes on us. What most taxpayers in the United States today are facing is “death by a thousand cuts”. When you add up all forms of taxation from all levels of government, approximately 40 percent of all the income in the country is taken in as taxes by government. Large numbers of Americans end up paying well over 50 percent of their income in taxes, and many of them don’t even realize that it is happening. We truly are being taxed into oblivion, and yet the politicians just keep coming back for more.
On all levels, government just keeps growing, and all of this government has got to be paid for somehow. Politicians have become masters at finding ways to tax us so that we won’t even feel it. They have an endless hunger to spend more money, and they depend on us to feed that addiction. Today, the combination of federal government spending, state government spending and local government spending now accounts for a larger share of U.S. GDP than at any other time in our history.
Yes, federal income tax rates were significantly higher 30 or 40 years ago. But virtually every other tax you can think of has gone way up since then or did not exist back then.
Federal income taxes definitely still hurt, but the reality is that where we really get hit is in all of the other taxes that we pay. American families pay Social Security taxes, Medicare taxes, state income taxes, sales taxes, property taxes, death taxes, various excise taxes, gasoline taxes, tire taxes, utility taxes, liquor taxes, telephone taxes and cigarette taxes just to name a few. The truth is that there are dozens and dozens of different taxes that most Americans pay each year, and there are a whole bunch of others that get passed on to us through businesses that we deal with.
Speaking of cigarette taxes, there is legislation in Congress right now that would send taxes on tobacco products absolutely skyrocketing yet again.
I don’t smoke and I never will smoke, but I find the attack on smokers by our politicians to be seriously offensive. If smoking is legal, then leave them alone. Don’t tax them into oblivion just because you don’t like what they are doing.
An excerpt from S. 1403 (The IDEA Full Funding Act) is posted below. You will notice that a portion of this legislation even refers to itself as the “Saving Lives by Lowering Tobacco Use Act”. They are openly admitting that they want to make tobacco so expensive that people cannot afford to use it….
SEC. 3. TOBACCO TAX INCREASE AND PARITY.
(a) Short Title- This section may be cited as the ‘Saving Lives by Lowering Tobacco Use Act’.
(b) Increase in Excise Tax on Small Cigars and Cigarettes-
(1) SMALL CIGARS- Section 5701(a)(1) of the Internal Revenue Code of 1986 is amended by striking ‘$50.33’ and inserting ‘$100.50’.
(2) CIGARETTES- Section 5701(b) of such Code is amended–
(A) by striking ‘$50.33’ in paragraph (1) and inserting ‘$100.50’, and
(B) by striking ‘$105.69’ in paragraph (2) and inserting ‘$211.04’.
(c) Tax Parity for Pipe Tobacco and Roll-Your-Own Tobacco-
(1) PIPE TOBACCO- Section 5701(f) of the Internal Revenue Code of 1986 is amended by striking ‘$2.8311 cents’ and inserting ‘$49.55’.
(2) ROLL-YOUR-OWN TOBACCO- Section 5701(g) of such Code is amended by striking ‘$24.78’ and inserting ‘$49.55’.
(d) Clarification of Definition of Small Cigars- Paragraphs (1) and (2) of section 5701(a) of the Internal Revenue Code of 1986 are each amended by striking ‘three pounds per thousand’ and inserting ‘four and one-half pounds per thousand’.
(e) Clarification of Definition of Cigarette- Paragraph (2) of section 5702(b) of the Internal Revenue Code of 1986 is amended by inserting before the final period the following: ‘, which includes any roll for smoking containing tobacco that weighs no more than four and a half pounds per thousand, unless it is wrapped in whole tobacco leaf and does not have a cellulose acetate or other cigarette-style filter’.
(f) Tax Parity for Smokeless Tobacco-
(1) IN GENERAL- Section 5701(e) of the Internal Revenue Code of 1986 is amended–
(A) in paragraph (1), by striking ‘$1.51’ and inserting ‘$26.79’;
(B) in paragraph (2), by striking ‘50.33 cents’ and inserting ‘$10.72’; and
(C) by adding at the end the following:
‘(3) SMOKELESS TOBACCO SOLD IN DISCRETE SINGLE-USE UNITS- On discrete single-use units, $100.50 per each 1,000 single-use units.’.
You can view the full text of this legislation right here. Please notice that some of the tax increases are absolutely mind blowing. For example, the tax rate on pipe tobacco is going from 2.8311 cents to $49.55.
Now that is a tax increase you can really sink your teeth into.
We are seeing “quiet” tax increases like this happen on every level of government all over the United States.
Of course I haven’t even mentioned all of the fines and fees and “registration” charges that state and local governments are hitting us with.
Have you gone to renew your car registration lately? In some states (such as California) the fees have gotten absolutely ridiculous.
Speaking of California, it looks like they are getting ready to target cellphone users once again.
According to USA Today, California is getting ready to seriously jack up the fines for talking on a cellphone while driving….
The state Senate has sent a bill to Gov. Edmund G. Brown Jr. raising the basic fine for a first automotive offense from $20 to $50, the Sacramento Bee reports. For subsequent offenses, the fine would rise from $50 to $100. That’s not the worst of it: by the time state and local assessments are added on, the total for a first offense rises to between $208 to $328. For additional tickets, make that $328 to $528.
Yes, talking on a cellphone while driving is dangerous. But hitting people with tickets of $300, $400 or even $500 is not about safety. It is all about revenue generation.
Right now we are seeing an epidemic of speed traps all over the country. State and local governments are desperate for money, and they see speeders as an easy source of revenue. You can read more about this phenomenon right here.
Speaking of “revenue”, that seems to have become Barack Obama’s new favorite word lately. He seems absolutely obsessed with raising more money for the federal government. The Obamacare law was absolutely packed to the gills with new taxes, but now he wants even more.
Yes, it is true that the wealthy are getting away with murder under our current tax system. I find it highly offensive that many people that make millions of dollars each year are able to find ways to pay much, much smaller percentages of their incomes in taxes than I do.
But raising tax rates isn’t going to solve the problem. Those that are masters at avoiding taxes are going to continue to do so. Meanwhile, middle class Americans and small businesses will continue to get bled to death.
Our current tax system is fundamentally broken and needs to be completely thrown out and replaced.
However, no system is going to work until the federal government gets a handle on its spending addiction.
In the past couple of years, spending by the federal government as a share of GDP has been the highest that it has been since World War II.
You would think that there should be plenty of fat to trim, but as the recent debt ceiling deal clearly demonstrated, our politicians do not intend to significantly reduce government spending.
They are just going to keep borrowing, spending and finding more ways to tax us.
All of this nonsense in Washington D.C. is part of the reason why Americans are so displeased with Congress at this point. According to Gallup, 84 percent of Americans now disapprove of the way Congress is doing its job, which is a brand new all-time high.
The truth is that sending more money to Washington D.C. is not going to “fix” things.
The federal government has multiplied in size over the past several decades, and yet the number of poor people just continues to increase.
Giving the poor more handouts may ease their suffering for a little while, but it is not the solution to their problems. What they really need are good jobs, but our politicians have very busy setting up unfair trade agreements that allow millions of our jobs to be shipped overseas, and they continue to suffocate businesses in this country with mountains of ridiculous regulations.
No, the people that truly benefit when more money flows to the federal government are the fatcats that live and work around Washington D.C.
The past few decades have been a bonanza for government contractors, lobbyists and lawyers in the D.C. area.
According to the Washington Post, those living in the Washington D.C. metropolitan area now have a higher median household income than anyone else in the country….
Washingtonians now enjoy the highest median household income of any metropolitan area in the country, and five of the top 10 jurisdictions in America — Loudoun, Howard and Fairfax counties, and Falls Church and Fairfax City — are here, census data shows.
The signs of that wealth are on display all over, from the string of luxury boutiques such as Gucci and Tory Burch opening at Tysons Galleria to the $15 cocktails served over artisanal ice at the W Hotel in the District to the ever-larger houses rising off River Road in Potomac.
There is a ton of money in the D.C. area. I know. I used to work there. Approximately one third of the GDP of the region comes from spending by the federal government. Even during this recent economic downturn, the Washington D.C. region continues to do really, really well.
So, no, raising taxes is not going to fix what ails us. It would just feed the monster that we have created in Washington.
We are already being taxed into oblivion. Middle class America can’t take much more of this.
We need to change our entire approach to taxation in this country, because right now our tax system is fundamentally unfair and it is not working.
So what do all of you think about our tax system? Please feel free to post a comment with your opinion below….
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8:00 pm
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10:41 am
The only item I disagree with is that we are paying 50% or more in taxes. More than likely when you include Social Security, Medicare and things like property tax, excise taxes etc, the figure is probably in the 70-75% range.
In Iran, Afghanistan they execute people by throwing many stones at a persons head. The many different taxes imposed upon citizens is akin to those "many stones".
President Obama and the Washington Plutocrats are living the good life on the backs of the middle class. About 47% of the people pay no income tax at all; the 70,000 page IRS Tax Code gives the rich and super rich numerous loopholes to avoid paying taxes. Corporations like GE move their manufacturing away from USA, earn money overseas and pay ZERO tax.
Yet when Boeing puts up a plant in South Carolina, Mr. Obama's NLRB is making it difficult for them, and the result will be that, that plant will not open and the jobs will go to Mexico or elsewhere.
Read the book "The Creature from Jekyll Island" by G. Edward Griffin (The Fifth Edition).
4:07 pm
great response – thanks for adding to the debate
11:41 am
I truly fail to see how the national debt is to be reduced without restoring the pre-Bush tax reduction revenue flow. It is also obvious that spending must be controlled and reduced. The two goals of revenue increase and spending decrease are needed to have a net positive effect on the national debt. The last time that gross GDP to debt occured was at the end of WWII. It is asserted that the Great Depression was overcome by WWII. The reason was government spending. The war effort cause consummer goods production to be replaced with munitions and military spending all paid for by government spending but the money flow came from taxes and thje sale of was boonds. In the years following the was the economy boomed because the pent up demand for consummer goods. The debt was reduced by the increased tax revenue used to retire the war bond debt. If government spending within the economy could be that effective during WWII then it could be equally effective now if directed at infastructure repair and improvement.
11:44 am
Sorry aboyt the errors, I ment the last time GDP to debt was at or over 100% . . .also was should be read as war
11:46 am
The author of this great article is absolutely right. Another form of tax that most people are not aware of is the large amount of money the Fed is printing. This act devalues the US dollar and our purchasing power.
12:04 pm
Did I miss it or are regular cigars not included in Section 3 of S 1403? If excluded it might be because the "Golden Rule makers" (i.e. those who have the gold make the rules) smoke cigars!
12:08 pm
Apparently studies show that, on average, governmentemployees are paid between 10-20% more than their private sector counterparts. Why not start with an across the board 5% government payroll cut – after all, most people in the private sector have had to take pay cuts (if not outright lost their jobs).
And, what about all the $100,000+ salaried new federal employees since Obama took office?
3:28 pm
Guest:
I beg your pardon, The Federal Employees are not, I repeat are not Making more then their counter parts. I was a Federal Emploee for 37 years and we laged way behind and uinder IKE:::: we went for 8 years without a pay raise. Persident Kennedy tried to get a bill passed to raise the salary to match the Civilian Pay.
Every time there was a crises we the Federal employee took the first hit. That has beenand continues to be the the same route today. I do not know where you people are getting your info., but it is easy to check out.
If you are including the Fereral Reserve the yes their salaries are quite handsome But they arenot Feredal employees working under the GS pay scale.If you do not know it the fact is that president Johnson was the Idiot who took the Social Securiy fund and put the MONEY INTO THE GENERAL TREASURY so he could pass the money into the GREAT Socitey. I could go on and on. but i think you can get my message
12:13 pm
Don't forget all the "fees" we pay on phone, cable, gasoline, lodging, etc. Taxes on manufacturing and transportation companies are passed on to us in the retail price. If we realize it or not, we are taxed.
12:20 pm
Is truly pathetic the way Washington is handling the affairs of this country. It's become a free-for-all with our leaders and they only think of whats in it for them and if they can show they've done more for their constituents than someone else they can get reelected and continue in their power struggle. They attact the Tea Party and call them terrorists but the current regime are the terrorists. They want total control over every aspect of our lives: health care, employment, hobbies, our daily lives…while they enjoy complete freedom and anonymity from those same laws they pass.
12:47 pm
One can complain about the government and the way it spends money. I'm sure the ancient Greeks complained bitter;y about how their hard-earned drachmas were frittered away on useless wars and governemt corruption, etc. I decided to check the facts to see how much of our hard-earned dollars are being frittered away on useless wars and government corruption. According to the Bureau of Economics of the Department of Commerce, but who can believe them they're just a bunch of overpaid government drones, the ratio of all taxes — federal state and local –including business taxes to net domestic product — the broadest measure of total income subtracting depreciation was 20.9 percent in 2010. In 2001, this ratio was 24.0 percent. I will supply the URL if anyone is interested in anything other than complaining.
6:54 pm
Thanks but I have my own data: my income and my taxes. They are a lot closer than the numbers in the article than yours! And yes, I am complaining and I think I have the right to do so. The government is ripping us off, the tax system is the blak hole where our hard-worked money disappears, jobs are exported by the thousands every month and politicians lie. It's time the government was held accountable!
11:11 pm
Fact Checker: I would like to see that URL, please. It does not address the problem that spending is more than 1.5 times taxes, hence the deficit, but I still find those 2010 tax numbers too low. Just curious, why didn't you post the URL with your message?__Thanks for the info, I will also do some fact checking.
6:10 am
That’s way the bestest aneswr so far!
1:02 pm
What is the real point here is that we continually accept the idea that the governments SHOULD be collecting these sums and we argue why and what.
We really need to collectively determine what we want a government to DO; then cost it out ; and then determine the best way of collecting this money.
I believe like Malcolm Forbes that a form of flat tax ( like ,say 17 % ) is the best way .
Then KILL income tax….period. The system of collecting a V alue A dded T ax (VAT ) is already in place. In Canada here we would save 22% !!!!……..the cost of running our tax system.
So,once we know what we want the cost of government to be , we have a system to collect it.
Then all (sic ) we have to do is monitor/supervise the politicians to manage it……hhmmmm ??!!!
We have to take back the democratic system.
1:08 pm
There is one more hidden tax that I don't think anyone here is mentioning. That is inflation. When the gov't & the Fed print new money to feed the spending addiction, it decreases the value of the dollars that you have in your pocket & your bank account. But they get the benefit of the full value of the dollars they create. So, even though you have the same number of dollars on your bank statement, you can't get as much for it.
The gov't doesn't have a revenue problem, it has a spending problem.
3:02 pm
You’re a real deep thienkr. Thanks for sharing.
1:50 pm
Very interesting comments
Now when the next elections comes up lets use the power of the Internet face book etc . To change this cycle
American people are tired of living in poverty, and the rich get richer ,we need a new wind in Washington we the people of this once great country can make the difference
Yes we can…….. lets change the winds in Washington and lets elect people that have the average American in mind and in there heart,before it is to late and we have thousand and thousands of tent city's in our great country. Because of lack of jobs.
We can make a difference lets start to day and unite .
2:11 pm
I challenge the blogger to justify that "…approximately 40 percent of all the income in the country is taken in as taxes by government. Large numbers of Americans end up paying well over 50 percent of their income in taxes…" You want big taxes go north of the border or cross the pond to Europe. You're demagoging and exaggerating taxes here, perhaps ideologically justifying low taxes for rich corporations and individuals. Actually the tax code (you seem unfamiliar with) permits deducting either actual or tabular taxes of individuals. What about that? Do you own taxes, individual and corporate, as I have and then write knowledgeably.
3:53 pm
Interesting comments. Our entire system is broken, from taxes and inflation, to our very system of electing our leaders.
Everyone talks about creating jobs, but just how do you expect anyone to create a job? The American middle class was created by manufacturing all kinds of goods for the World market. But, we had a bit of an advantage… the rest of the World's manufacturing facilities had been bombed out of existence in WW2. Now, thanks to ridiculous taxes and a regulatory climate that makes it virtually impossible to build or run a manufacturing facility in this Country, we longer produce much of anything. All of our good jobs have gone overseas and they are not coming back.
In addition, our "democracy" is a joke. Take the recent Iowa straw poll for example. The media acts as though the opinions of 17,000 people who were bribed and cajoled to vote really reflect the sentiments of the 310 million people in this Country. The results do tell a tale though.
Bachmann won it by 152 votes over Ron Paul. She was on every morning show the next day and all over the media even though anybody with a lick of sense knows Obama would mop the floor with her. It's just plain ignorant to think that we could cut 42% off the Federal budget overnight and not have riots in the streets. But, that is her only talking point.
Pawlenty got a bunch of coverage for quitting because he got third place.
But what about Ron Paul? Barely even a mention even though the gap between him and Bachmann would have been close enough to demand a recount if it had been a real election.
Why? The media and the political machines on both sides don't dare expose the fact that he is getting more popular despite their best efforts to squash him. He is dangerous to both sides because he understands what is wrong and he is willing to bring it out in the open. No one has has either the knowledge or the courage to do that. It's just politics as usual, and they intend it to stay that way.
I am trying to be optimistic that the American people are going to wake up and stop our Government from running us off the financial cliff we are headed for at full throttle, but it's getting harder every day. If the only honest politician in Washington who would actually try to fix this mess is not going to be given a chance, I think our time and money would be better spent preparing for the collapse than debating over what passes for a democracy these days in America.
4:08 pm
only time will tell – but if past actions are any indication of future ones – it might be too late
11:49 pm
The Bush tax cuts cost this country more than both of his unpaid for wars and this recession combined. We do get taxed unfairly at every turn, but it could be because people throw a hissy fit when the Dems mention raising taxes on the rich who got rich off this country and then fail to take responsibility for it's well being. I'm glad when I make enough money to pay taxes but giving the rich and big oil/big corp a free pass is just idiocy. All that revenue is made up on the backs of the poor, the elderly and the middle class, because we all pay all the taxes mentioned above until we lose our jobs and can't anymore.
11:26 am
we need a revolution,the last one kicked out the brits since then we have never paid so little taxes, since they left we have paid and paid and we will be paying until we waken up, that's if the Washington mob let us until that happen's B S will baffle brain's.Ron
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11:10 am
This is right on the money. While I support higher taxes on tobacco products because they create financial burdens upon the health care system, which is funded in large part by tax dollars, directly or indirectly, there are a million ridiculous examples of tax abuse. I have to pay about $500 a year just to own a small boat, vehicle license fees are outraegous, all the line items that creep up on your property tax bill, etc. It is truly endless. Spending+programs=votes. This is the algorithm for re-election and we need people to wise up on it because the "just tax the rich" solution will only go so far.
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