03 February, 2007

Taxes....in General

General Taxes

The average tax payer has no idea how much they pay in taxes.
How do I tax thee? Let me count the ways!

Income Tax
Most tax payers do not recognize the tax bite taken from their paychecks. Unless you are self-employed, employers are mandated to withhold Federal and State taxes from your pay each payday. The average tax payer knows their typical take home pay and uses this number as how much they get paid each pay day, when in reality their take home could be much higher if there was no withholding.
No withholding would require each tax payer to fork over the dough on April 15th of each year instead of staggered over the year.

The government says:
We are doing the tax payer a favor by, in essence, establishing an automatic tax account to pay your taxes with! You wont have a big tax bill this way! And if you over pay us, well gladly refund the money! We are a gracious government, aren't we?
We are also protecting you in case you do not have the money saved to pay your tax bill come April.

What the government actually thinks:
If you do not pay us on time, we will add interest and late fees galore until we bankrupt you!
If I take these know-nothing tax payer's money in smaller chunks, no one will really complain. After all, $50 bucks doesn't sound nearly as bad as $1300 bucks! If Americans actually recognized how much they pay in taxes, there would be a REVOLT demanding some heads! We can't have an informed Republic! Lets hide, disguise, and misdirect all that we can! Let's call it a fee!....yea that's the ticket....no one will realize it is really a tax in disguise!

Reality says:
If I over pay, I just gave the government an interest-free loan of MY money!

End Result:
Joe Tax Payer is too busy working to pay taxes to think about how much he owes in taxes.

Solution:
Don't hide anything. Make taxes recognizable. Have the tax payer write a check each payday for their taxes.

Sales Tax:
Sales tax is the most fair and equal tax, except that some states/cities have them and others don't.
Some say it is not fair because Rich people can afford it, but the poor folk can not.
This tax is solely based on the amount spent, calculated by a percentage of the sale. It is the same rate for everyone. Rich, poor, it does not matter.the sales tax is what it is.
Some say that to help the poor; the sales tax on food should be eliminated.....and I tend to agree. This would instantly add 4-7% based on where you live to your food budget bottom line to buy more food, or pay other bills with! The issue would be what is considered food. Would it simply be the food staples like milk, eggs, butter, flour, sugar, etc....or would it include soda, candy, and potato chips?
Where do you draw that line of distinction?

No comments: