In my last post, I described how liberalism went from being a political philosophy promoting individual liberty to a political philosophy promoting big government authoritarianism and control over the individual. Nowhere is this more true than in the area of economics, where the liberal tax and spenders inside government have decided THEY know what to do with your money better than you do.
With April 15th approaching, I offer the following historical Tax Freedom Day chart, prepared by the Tax Foundation, which illustrates how much of the year the average American has to work just to pay his/her taxes:
The blue line represents Tax Freedom Day. This year it's April 18th. The red line represents Tax Freedom Day if the federal deficit is included (around May 8th this year). This means Americans worked nearly 30% of the year just to pay their taxes. If you include the deficit, which can be viewed as taxes incurred but not collected, Americans worked nearly 38% of the year to pay their taxes.
You can see from the above chart that taxes have gone up, up, up over the years, though beginning around 1970, the government stopped collecting all the taxes that were due, to make things appear otherwise. The result ? America is drowning in debt. The federal debt alone is $17.5 trillion, and growing by leaps and bounds every single day of the year.
When it comes to deficits and the debt, liberals blame conservatives for cutting taxes (most tax cuts have come from the Republican party), and conservatives blame liberals for increasing spending (most spending increases have come from the Democratic party). Both sides are correct in their accusations, but notice this - if we were paying all the taxes that were currently due, LIBERALS AGAINST LIBERTY WOULD HAVE NEARLY 40% OF AMERICAN EARNINGS GOING TO FEDERAL, STATE, AND LOCAL GOVERNMENT. Why am I blaming liberals for this, and not conservatives ? Because Liberals Against Liberty keep insisting that TAXES ARE TOO LOW AND GOVERNMENT SPENDING SHOULD BE INCREASED !!! Conservatives, on the other hand, keep insisting that taxes are too high, and spending should be cut.
Even when nearly 40% of American earnings are being spent by the government already, Liberals Against Liberty want to RAISE taxes and INCREASE spending...and if you happen to be wealthy and successful, Liberals Against Liberty want to rake you over the coals and confiscate most of your earnings. Liberals speak fondly of those good old days in the 1950's, when the top marginal tax rate was 91%, but the truth is, taxes in the 1950's were far LOWER than they are today. A quick look at the above chart will tell you that much.
It seems almost counterintuitive that taxes were lower in the 1950's, when the marginal income tax rates were so high, but that's because the government has gotten very creative in the ways it taxes us. Here are some of those ways -
Air Transportation Taxes (just look at how much you were charged the last time you flew), Biodiesel Fuel Taxes, Building Permit Taxes, Business Registration Fees, Capital Gains Taxes, Cigarette Taxes, Court Fines (indirect taxes), Disposal Fee, Dog License Taxesm Drivers License Fees, Employer Health Insurance Mandate Tax, Employer Medicare Taxes, Employer Social Security Taxes, Environmental Fees, Estate Taxes, Excise Taxes On Comprehensive Health Insurance Plans, Federal Corporate Taxes, Federal Income Taxes, Federal Unemployment Taxes, Fishing License Taxes, Flush Taxes (yes, this actually exists in some areas), Food And Beverage License Fees, Franchise Business Taxes, Garbage Taxes, Gasoline Taxes, Gift Taxes, Gun Ownership Permits, Hazardous Material Disposal Fees, Highway Access Fees, Hotel Taxes, Hunting License Taxes, Import Taxes, Individual Health Insurance Mandate Taxes, Inheritance Taxes, Insect Control Hazardous Materials Licenses, Inspection Fees, Insurance Premium Taxes, Interstate User Diesel Fuel Taxes, Inventory Taxes, IRA Early Withdrawal Taxes, IRS Interest Charges (tax on top of tax), IRS Penalties (tax on top of tax), Library Taxes, License Plate Fees, Liquor Taxes, Local Corporate Taxes, Local Income Taxes, Local School Taxes, Local Unemployment Taxes, Luxury Taxes, Marriage License Taxes, Medicare Taxes, Medicare Tax Surcharge On High Earning Americans Under Obamacare, Obamacare Individual Mandate Excise Tax (if you don't buy “qualifying” health insurance under Obamacare you will have to pay an additional tax), Obamacare Surtax On Investment Income (a new 3.8% surtax on investment income), Parking Meters, Passport Fees, Professional Licenses And Fees (another form of taxation), Property Taxes, Real Estate Taxes, Recreational Vehicle Taxes, Registration Fees For New Businesses, Toll Booth Taxes, Sales Taxes, Self-Employment Taxes, Sewer & Water Taxes, School Taxes, Septic Permit Taxes, Service Charge Taxes, Social Security Taxes, Special Assessments For Road Repairs Or Construction, Sports Stadium Taxes, State Corporate Taxes, State Income Taxes, State Park Entrance Fees, State Unemployment Taxes (SUTA), Tanning Taxes (a new Obamacare tax on tanning services), Telephone 911 Service Taxes, Telephone Federal Excise Taxes, Telephone Federal Universal Service Fee Taxes, Telephone Minimum Usage Surcharge Taxes, Telephone State And Local Taxes, Telephone Universal Access Taxes, The Alternative Minimum Tax, Tire Recycling Fees, Tire Taxes, Tolls (another form of taxation), Traffic Fines (indirect taxation), Use Taxes (Out of state purchases, etc.), Utility Taxes, Vehicle Registration Taxes, Waste Management Taxes, Water Rights Fees, Watercraft Registration & Licensing Fees, Well Permit Fees, Workers Compensation Taxes, Zoning Permit Fees.
That's 97 different taxes, in case you were counting, and I'm sure I didn't mention them all. Despite all these taxes, and a resultant tax code that is 3.8 million words long and so complex that tax professionals can't even figure it out, Liberals Against Liberty claim we are not being taxed enough. They went berserk when President George W. Bush cut taxes across the board by 10%, putting more of people's own money back into their pockets of the earners. They went berserk when President Reagan cut taxes and did the same. These are people who have the mindset that YOUR EARNINGS BELONG TO THEM, AND THEY WILL DECIDE HOW MUCH OF YOUR OWN MONEY YOU SHOULD BE ALLOWED TO KEEP.
When I look at the above list of taxes, it occurs to me that I've paid most of them myself, and I'm no Warren Buffett. I'm just a regular working stiff, like most people. When I look back at all the money I've given to the government through the years, I realize that I'd be much better off had the government simply allowed me to keep more of my own money. Unlike Liberals Against Liberty, I know that I am a better ward of my own money than some inefficient government bureaucracy in Washington D.C., which has never guaranteed Americans anything other than a subsistence living. I'll give you one quick example, using one of the most popular liberal government programs yet invented, Social Security (SS). People like SS, but if you ask me, it's little more than a giant scam and a Ponzi scheme.
In the early 50's, the SS tax rate was 2.5% (individual plus employer contribution - both ultimately paid by the individual, in case anyone can't figure that little sleight of hand out). Today, the SS tax rate is 12.4%. SS depends on continual tax increases to stay afloat. Why is this ? Some attribute it to demographics shifts, but that's not the real reason. The real reason is because the SS money you have given to the government your entire working life doesn't earn squat. It doesn't even keep up with the rate of inflation. In fact, THE GOVERNMENT SPENDS YOUR SS MONEY about as fast as the government gets it. After spending your SS money, the government creates new assets out of thin air in the form of T-bill IOU's for the amount of your SS funds, and those T-bills pay about 2% interest. Big whoop. That ain't squat. The SS Trust Fund is in essence a file cabinet full of IOU's, meaning more debt will have to be incurred to access it. There is no pile of SS money sitting anywhere waiting for you to retire. The only way for SS to remain afloat is for continual benefit cuts or tax increases to be implemented down the road. Everyone knows, or should know, about this Ponzi aspect of SS. Everyone should know about the way the politicians are ripping off SS and systematically depriving U.S. citizens of their rightful earnings, yet...SS is still popular. Go figure. It's no surprise to me that the public schools don't teach economic literacy to kids. If they did, the kids might begin to catch on. If fact, I have never seen the real truth about Social Security printed in any major American newspaper. Apparently, SS is so sacred that it is considered blasphemy to tell people it's basically a ripoff.
Now, imagine if you took that same 12.4% in SS taxes you pay the government every paycheck, and invested it yourself, with that money compounding repeatedly over the 40 to 50-year period of your working life. How much money do you think you'd have ? For purposes of simplicity, let's assume the stock market grows for the next 40 years at the same rate it has for the last 40 years. Let's assume your family worked for 40 years making the mean American household income of $51,000 (your SS contribution would be $6,324 per year), putting you in the middle of the earning pack. If you put your SS money into a stock ETF fund, which grows as the stock market grows (the Dow-Jones average has gone from about 1,000 in 1974 to 16,400 today in 2014. That's an annual growth rate of about 7.65% by my calculations), in 40 years you'd have nearly $1.5 million. If you worked for 45 years, you'd have nearly $2.2 million. And I'm assuming your mean American income doesn't grow at all, which is pretty unlikely. You'd most likely have a lot more money than I've forecast. Even if the market only grew at half the historical rate i used, you'd still be a millionaire after working 40-50 years.
So, would you rather be a millionaire when you reach age 65, or have the government send you a paltry SS check every month ? Liberals Against Liberty opt for the paltry SS check every time. The truth is, SS gives you a minimum wage lifestyle when you reach your so-called golden years. Apparently, that's exactly the lifestyle Liberals Against Liberty want you to have, because, you know, they are looking out for YOU, the little guy, the common man (retch).
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