I recently received my last paycheck for the year. Often, I wonder where in the world my money is going as like most of us, it seems to go out faster than it comes in. Where, I ask myself, is my money going???!!!
Well, I think I have discovered at least part of the answer to my question. First I looked at the deductions portion on the pay stub. You know, the government grab known as Federal Withholding, FICA, MEDFICA, and State. Some folks also have County and City.
That accounted for a full 30% difference between what I earned and what I took home. 30% !!! Those dollars are gone and might as well have been thrown down a rat hole for all the benefit I will ever receive from them.
But that doesn't resolve my continual confusion about why it's so difficult to save. Then I began to consider this partial list of other taxes (including the ones mentioned above) that I must spend from my earnings that have already been taxed!!!...
- Accountants Receivable Tax
- Building Permit Tax
- Capital Gains Tax ( a tax on your savings )
- CDL License Tax
- Cigarette Tax
- Corporate Income Tax
- Court Fines ( indirect taxes )
- Dog License Tax
- Federal Income Tax
- Federal Unemployment Tax
- Fishing License Tax
- Food License Tax
- Fuel Permit Tax
- Gasoline Tax
- Hunting License Tax
- Inheritance Tax Interest expense ( tax on the money )
- Inventory Tax IRS Interest Charges ( tax on top of tax )
- IRS Penalties ( tax on top of tax )
- Liquor Tax
- Local Income Tax
- Luxury Taxes
- Marriage License Tax
- Medicare Tax
- Property Tax
- Real Estate Tax
- Septic Permit Tax
- Service Charge Taxes
- Social Security Tax
- Road Usage Taxes ( Truckers )
- Sales Taxes
- Recreational Vehicle Tax
- School Tax
- State Income Tax
- State Unemployment Tax
- Telephone Federal Excise Tax
- Telephone Federal Universal Service Fee Tax
- Telephone Federal, State and Local Surcharge Taxes
- Telephone Minimum Usage Surcharge Tax
- Telephone Recurring and Non-Recurring Charges Tax
- Telephone State and Local Tax
- Telephone Usage Charge Tax
- Toll Bridge Taxes
- Toll Tunnel Taxes
- Traffic Fines ( indirect taxation )
- Trailer Registration Tax
- Vehicle License Registration Tax
- Vehicle Sales Tax
- Watercraft Registration Tax
- Well Permit Tax
- Workers Compensation Tax
None of these taxes existed 100 years go, and our nation was the most prosperous in the world, had absolutely no debt, had the largest middle class in the world and mom stayed home to raise the kids.
What happened? Simple. America has become a liberal, socialist, welfare state.
And there's another tax that is referred to as the "hidden" tax...the insidious tax of inflation.
From the link:The inflation tax - collected in the form of a continually depreciating currency - has been especially egregious in the postwar period. What you could buy for $1 in 1946 you have to pay $8.77 for today. Another way to put it is that $1 then is worth 11 cents today. What happened to the 89 cents? It has been taxed away by the Federal Reserve's continuing expansion of the money supply. The Clinton inflation tax alone (1992 to the present) has sliced off 18 cents from the value of the dollar.
And another link:
It is an insidious system. It gives us more by actually giving us less. That means we seem to have more money, the nominal amount of the money in our pockets or in the bank is larger. The economy seems to humming along. Stock prices and earnings seem to grow by huge amounts over the long term. But it is a trick.[14] Our judgment has been distorted by the long-term effects of inflation and the destructive policies of the central bank.[15]
These devalued dollars actually can buy fewer things. And this cycle of spending and inflating will worsen unless there is a signal change among tens of millions of Americans who are disgusted, but feel compelled to vote for one of these two windjammers. They just want to go about their business, work harder and be left alone. This kind of person is the "forgotten man.[16]" He has increasingly been pushed into the background by special interests and those forever demanding more of the welfare state.
Inflation spurs the growth of central governments. It allows these governments to grow larger than they could become in a free society. And it allows them to monopolize governmental functions to an extent that would not occur under a natural production of money. This comes at the expense of all forms of intermediate government, and of course at the expense of civil society at large. The inflation-sponsored centralization of power turns the average citizen more and more into an isolated social atom. All of his social bonds are controlled by the central state, which also provides most of the services that formerly were provided by other social entities such as family and local government. At the same time, the central direction of the state apparatus is removed from the daily life of its prot�g�s.
Fiat money is the means by which governments obtain instant purchasing power without taxation. But where does that purchasing power come from? Since fiat money has nothing of tangible value to offset it, government's fiat purchasing power can be obtained only by subtracting it from somewhere else. It is, in fact, "collected" from us all through a decline in our purchasing power. It is, therefore, exactly the same as a tax, but one that is hidden from view, silent in operation, and little understood by the taxpayer. [pg. 162]
America once enjoyed a stable dollar backed by gold deposits, a "gold standard" system. This system gradually was undermined throughout the last century, until President Nixon finally severed the last tenuous links between the dollar and gold in 1971. Since 1971, the Fed has employed a pure fiat money system, meaning government can create money whenever it decrees simply by printing more dollars. The "value" of each newly minted dollar is determined by the faith of the public, the total amount of dollars in circulation (the money supply), and the financial markets. In other words, fiat dollars have no intrinsic value.
What does all of this mean for you and your family? Since your dollars have no intrinsic value, they are subject to currency market fluctuations and ruinous government policies, especially Fed inflationary policies. Every time new dollars are printed and the money supply increases, your income and savings are worth less. Even as you save for retirement, the Fed is working against you. Inflation is nothing more than government counterfeiting by the Fed printing presses. Inflation acts as a hidden tax levied disproportionately on the poor and fixed-income retirees, who find the buying power of their limited dollars steadily diminished. The corporations, bankers, and wealthy Americans suffer far less from this inflation, because they can take advantage of the credit expansion that immediately precedes each new round of currency devaluation.
Yet while politicians favor central bank control of money, history and the laws of economics are on the side of gold. So even though central banks try to mask their inflationary policies and suppress the price of gold by surreptitiously selling it, the gold markets always cut through the smokescreen eventually. Rising gold prices like we see today historically signify trouble for paper currencies, and the dollar is no exception. Should the dollar continue to decline in value, America will find itself struggling to service our already massive debt load even as our foreign creditors become less interested in our dollars.
America once enjoyed a stable dollar backed by gold deposits, a "gold standard" system. This system gradually was undermined throughout the last century, until President Nixon finally severed the last tenuous links between the dollar and gold in 1971. Since 1971, the Fed has employed a pure fiat money system, meaning government can create money whenever it decrees simply by printing more dollars. The "value" of each newly minted dollar is determined by the faith of the public, the total amount of dollars in circulation (the money supply), and the financial markets. In other words, fiat dollars have no intrinsic value.
What does all of this mean for you and your family? Since your dollars have no intrinsic value, they are subject to currency market fluctuations and ruinous government policies, especially Fed inflationary policies. Every time new dollars are printed and the money supply increases, your income and savings are worth less. Even as you save for retirement, the Fed is working against you. Inflation is nothing more than government counterfeiting by the Fed printing presses. Inflation acts as a hidden tax levied disproportionately on the poor and fixed-income retirees, who find the buying power of their limited dollars steadily diminished. The corporations, bankers, and wealthy Americans suffer far less from this inflation, because they can take advantage of the credit expansion that immediately precedes each new round of currency devaluation.
Brilliant Austrian school of economics scholar Murray Rothbard asked a seemingly complex question in the title of his essay: "What has Government Done to our Money?" The answer turns out to be pretty simple: Government consistently debases our money. How and why it debases our money has everything to do with politics, and nothing to do with the laws of economics.
It's as though you have given your check book to the government, or more accurately, they simply have taken it.
WCS