There are many misconceptions about taxation in America. Various tax rates are thrown around and people discuss taxation in very static terms, but the fact is that our money is taxed over and over again and we are taxed in a multitude of ways.
The tax code is entirely too convoluted and desperately needs to be streamlined, but that is a topic for another day. What is important to remember is that when politicians discuss the impact of taxes, they often focus on one direct tax or another, and omit from the discussion the numerous directions the taxman comes from to get our hard-earned money.
Recently, FOX Business’ Gerri Willis discussed the nature of taxation and revealed that by 2013, the middle class is likely to be paying close to 50% of their money to the government.
She starts by stating that the average American middle class taxpayer pays 25% percent of their income in Federal Income Tax. Then then real bleeding begins:
“Then there is the Federal Social Security and Medicare payroll tax of 13.3%. You pick up 5.65% while your employer pays 7.65%. Add them up and that’s 38.3% of middle class family incomes going to Uncle Sam. But we aren’t done, not by a long shot.
According to the Tax Foundation, the average state’s income tax rate on the middle class is 4.82%. Of course, some states have it and some don’t, but we’re taking an average here.
Now the total: 43.12% of middle class income to taxes.
Oh, and I almost forgot, unless congress makes a move, Federal Income taxes go to 28% for middle income folks next year as the Bush tax cuts expire.
Neither party has said they want that to happen, but in Washington, well, you never know.
Also the payroll tax for those folks will go to 15.3% from 13.3%percent.
Did I mention state, property, corporate, and excise taxes? No?
All told, next year, total taxes will go to almost 50% for the middle class; the very group that the president says he wants to protect. That means 50 cents out of every dollar earned has to go to the government. Half of everything will go to an entity that didn’t earn that money, and shouldn’t be entitled to all that dough.”
Even without the unknown variables such as property taxes, we are looking at a 48.12% tax rate. And that is not even considering the taxes that are built into the costs associated with living.
Sales tax, for instance, is a tax that few account for in their budgeting, but has grown in recent years. According to Forbes, the national average for states that have sales tax was 9.64% in 2010. With almost ten cents of every dollar going to the government, it can add up quickly.
As it stands right now, we are paying nearly half our income to the government and we are getting less and less value for our money with each passing year. Tax-and-spend liberals made it rain with borrowed money, and now they are trying to find a way to keep the ship afloat by further taxation instead of addressing the massive entitlement spending. Enough is enough.