Tax Slavery Day

Tax Slavery Day

Jarret B. Wollstein
Tuesday, April 15, 2003

It’s April 15th and you’re still working for the government. In fact, it will be well into summer before you truly start working for yourself.

According to the Tax Foundation, the average American works until April 19th to pay his federal, state and local taxes. But that’s just the beginning of what America’s confiscatory tax system now costs you.

Dr. James Payne, author of Costly Returns: The Burdens of the U.S. Tax System, points out that in addition to obvious direct taxes -- like the income tax and property tax -- we also page huge hidden costs to keep our tax system functioning, including . . .

Compliance costs – record keeping, monies spent on tax planning, computers and software purchased to comply with IRS rules, etc.

Enforcement costs – IRS audits, field investigations, service center corrections, criminal investigations, litigation, and forced collections.

Emotional, moral and cultural costs – families forced onto welfare, time and creative energy lost figuring out how to avoid taxes, etc.

In total, for every $1 we pay in direct taxes, our tax system costs us an additional 65¢ in compliance costs. Even if you are never personally audited or fined, you still end up paying these costs in the form of higher prices for every good and service you buy.

Here’s how tax costs break down:

Federal taxes: 22.4 percent of income

State and local taxes: 11.8 percent

Compliance costs: 22.2 percent

Total: 64.4 percent of your income the tax system now costs you.

That means that the real tax freedom day is sometime in July. The rest of the time you’re working just to pay Uncle Sam.

It wasn’t always like this. In 1950, the total tax bite was just 12% of the average person’s income.

Of course, back then there was no Medicare, no Medicaid, no OSHA, no DEA, 30% of the population of major cities wasn’t on welfare, and the U.S. didn’t have troops in over 180 countries.

The reality is that ever-expanding government and ever-rising taxes are an unsustainable burden on our society, which will bankrupt us in the not too distant future: Clinton’s last budget projected lifetime tax rates on Americans in their 20’s of 84% of their income.

We don’t need to cut government spending. We need to slash it with a meat axe, along with dozens of inefficient, destructive government agencies.

As a matter of fundamental fairness and fiscal responsibility, we need to reduce government spending to at most 10-15 percent of our income, the quicker the better.