Life can be very taxng

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By John Pawlak

It would be very entertaining to resurrect the Founding Fathers – the guys who fought to build a nation that would not suffer taxation without representation – and see the expressions on their faces when they see what that ideology has spawned.  Taxation “with” representation is our credo and we certainly do have representation.  Boy, do we have representation!  


More so than most people realize.


The budget meltdown in California helped underscore the true complexity (and idiocy) of taxes in this country.  People scream for services.  They want their roads paved and maintained.  They want those streets safe from crime.  They want health and human service programs, clean modern schools, police forces and fire fighters, courts and prisons, consumer protection agencies, national defense, environmental protection, and emergency services.  The only thing they don’t want is taxes.  Sadly, as Californians are learning the hard way, whether or not taxes cover the demand, services must be maintained at a level independent of the ability to pay for them.


So how does this money get collected?  The most obvious ones are federal and state income taxes and FICA withholding taxes.  These usually account for the bulk of what people see deducted from their income.  Then there are other taxes, the most visible of which is sales tax (which can be either state or municipal or both). Sales tax is ubiquitous and in California it accounts for a monumental 30 percent of state revenue.  It’s amazing to realize how much gets collected from taxing candy bars, drywall, magazines, light bulbs, shoes, soap ... the list is virtually endless.  As Father Guido Sarducci once pointed out on “Saturday Night Live,”, it adds up fast – Twenty five cents!  Twenty five cents!  Twenty five cents!


The good news is that New Mexico doesn’t have a sales tax.  The bad news is that we have a Gross Receipts Tax (5 percent for the state plus whatever additional tax is levied by your county and municipality). Instead of being taxed on one’s profit, the state taxes you on the gross amount.  If that isn’t gross, what is?


But what taxes do we really pay?  To understand taxes fully, one would need a PhD in financial wizardry.  Either that, or a masters in deceit.  Taxes come in many forms and the most covert are the hidden taxes; tariffs, utilities taxes, luxury taxes, excise taxes, licensing fees, occupancy taxes, service fees, facility charges, surcharges, travel taxes, import taxes, export taxes... uh, had enough?


And then there are “sin” taxes.  These address commodities such as cigarettes, gambling, alcohol, fuel-inefficient cars, and eventually “fat foods” such as sugary sodas.  I suppose it does make sense.  After all, aren’t we taught that we will “pay for our sins?”


Hidden taxes account for a formidable amount of money collected, raising prices on just about anything you can imagine.  If you can buy it or sell it, they can embed a tax on it.  The total list of taxes one pays each year, from excise taxes on eggs, to tariffs on Barbie dolls, to sin taxes on that cheese puff you just ate, to the beloved federal and state income taxes, would prompt our Founding Fathers into staging another revolution.  


And yet, there is one tax that rarely gets the press it deserves, the most vile tax of them all ... the interest on the National Debt.  Call it what you will, but it is in fact a tax.  And unlike other taxes, we pay it over and over and over.


When the government spends more than its budget, the extra spending is realized as an increase to the National Debt.  This debt levies an enormous burden on the next generation.  Tax cuts decrease the government’s revenue, but spending continues as a breakneck pace.  The current debt accounts for almost $40,000 per person in America.  The annual payment made on the interest on the National Debt is now the third largest expenditure item in the Federal budget!  Note that this does not pay down the debt, it merely pays the interest each year!


Last year, taxpayers shelled out $450 illion just on the interest on the National Debt.  This year, it will exceed $500 Billion.  We are now paying over $15,000 every second of the day just to maintain our current debt.  


We spend eight times more on the interest than we do on education.  


What does this teach us?


As politicians boast about “giving” tax-cuts, they are simply “taking” by deferring the payment of those taxes to the next generation.  


Every child born in this country inherits the tax cuts of the past.  


This is the true measure of taxation with representation; our government’s endless goal to drive hundreds of millions of people into eternal debt.