The Tax Foundation released its annual tax analysis for this year, analyzing all of the taxes that Americans pay to all levels of government. Their findings this year include the following highlights
- In 2012, the average American family will spend 29% of its income on taxes.
- This year’s Tax Freedom Day of 29% is up from 26.6% in 2009, Obama’s first year in office.
- This is more than the average American family will spend on food, clothing, and housing COMBINED.
- Tax Freedom Day, the day when an average American family stops working for government and the political class, will arrive on April 17 this year, four days later than last year and nine days later than in 2009, Obama’s first year in office.
- In other words, the average American family works 107 days for the government in 2012 before it starts working for itself.
- The earliest Tax Freedom Days are in Tennessee (March 31), Louisiana (April 1), and Mississippi (April 1).
- The latest Tax Freedom Days are in Connecticut (May 5), New York, (May 1), and New Jersey (May 1).
Now, many people will go off on a tangent, blaming Bush and the Bush tax cuts, claiming that the rich do not pay enough in taxes, the rich get too many tax breaks, etc. But they miss the bigger point. 29% confiscation rates of our wealth is bordering on oppression. A favorite saying of mine is that you cannot have political freedom without financial freedom and financial freedom is difficult to maintain when almost $.30 out of every dollar you work hard to earn goes to the political class.
By giving the political class 29% of your earnings, you have less freedom to live where you want to live. You have less freedom to send your kids to better schools. You have less freedom to start your own business. Your have less freedom to give your personal wealth to your favorite charities. You have less time to indulge in your favorite past times. You have less freedom.
And what do we get for this 29% confiscation:
- The political class takes this 29% of your annual earnings and misuses $70-90 billion worth of it every year via waste and criminal fraud in the Medicare program.
- The political class takes this 29% of your annual earnings and misuses about $40-60 billion of it every year via waste and criminal fraud in the Medicaid program.
- The political class takes this 29% of your annual earnings and misuses about $120 billion of it every year via waste and fraud in the Social Security program.
- The political class takes this 29% of your annual earnings but fails to collect over $300 billion a year from other Americans, your neighbors, who evade paying their legal and fair share of taxes.
- The political class takes this 29% of your annual earnings and misuses over $20 billion of it every year via waste and criminal fraud in the unemployment insurance programs.
- The political class takes this 29% of your annual earnings and misuses billions of it every year via fraud and criminal activity in its food stamp programs.
- The political class takes this 29% of your annual earnings and misuses billions of it via government loans, grants and cronyism because of failed alternative energy programs, including Solyndra, Beacon, Evergreen, ENER1, Spectra, and others.
- The political class takes this 29% of your annual earnings and misuses it via government inefficiencies such as the recent disclosure that the GSA recently misspent almost a million dollars worth of your earnings on ONE conference or the disclosure that the US Navy spent $300 million to built two ships that it then scrapped at a cost of $10 million without ever utilizing those ships.
- The political class takes 29% of your annual earnings and misuses it via the unnecessary foreign deployment of U.S. military personnel around the world, deployments that no longer serve any useful or strategic military purpose.
- The political class takes 29% of your annual earnings and fails to fix our failing public schools, fails to solve the war on drugs problem, fails to come up with a coherent and strategic energy independence plan, fails to seal our borders and come up with a coherent and compassionate illegal immigrant plan, fails to come up with a coherent and effective way to tame escalating health care costs, and fails in just about any other program or project they embark on.
If you think April 17 and working 107 days for the political class is an insult and oppression, you may have not seen anything yet, given the following wave of negative tax impacts that are about to hit every American, a wave that the Washington Post calls “Taxmageddon:”
- If Congress does not act by the next new year, Americans will pay the Federal government an extra $493 billion in taxes in 2013, about $4,300 per U.S.household on average.
- This is $4,300 per household that will not be spent on new cars, dining out, going to the movie theaters, buying new appliances and furniture, going on U.S. vacations, etc., severely depressing an already shaky economy.
- It is highly doubtful that this $4,300 per household will efficiently find its way back into the economy, given the political class record of wasteful spending highlighted above.
- Some of these additional taxes will come from the expiration of the original Bush tax cuts for ALL Americans, tax cuts that also reduced the marriage penalty, increased the Child Tax Credit and the adoption credit, and increased tax breaks for education costs and dependent care costs.
- More tax impacts will come from the expiration of the once-temporary payroll tax cut and the expiration of the patch on the Alternative Minimum Tax (AMT) — which would raise the income threshold over which families qualify for the AMT to prevent middle-income families from paying this tax that is only supposed to impact “the rich.”
- But it keeps on coming. Additional tax burdens will come from the imposition of new taxes as outlined in the dreadful Obama Care legislation as well as other sources including the the raising of the death tax from 35% to a whopping 55% and the expiration of businesses’ ability to fully expense new capital investments, further suppressing the ability of businesses to free up cash for hiring and expansion.
Given these additional tax burdens, we may fondly look back to 2012 when the Tax Freedom Day was ONLY April 17. When you add another $4,300 worth of tax burden on every average American household, as estimated by the Washington Post, you can be sure that Tax Freedom Day will extend much further into the year as will the oppression and declining in freedom that goes with it.
The only way to justify these additional taxes is if all of them were going to pay off the $15 TRILLION worth of national debt. But we all know that is not going to happen with the current set of politicians in office. It will be wasted away just like they do with all of the other wealth we send to them. Plus, $493 billion would pay off less than 10% of the national debt that the Obama administration will incur in its first, and hopefully, only term.
Given the out of control government spending and the associated out of control waste, it is obvious to any normal person that we have an oppressive government spending issue in this country, not an under taxation problem in this country. Unfortunately, normal people do not run our government and do not sit in our political offices.