Here's an example:
To better understand the hidden taxes we pay, consider the following typical example. Assume that you're an average manufacturing wage worker who receives a paycheck twice a month. Your gross earnings cost your employer $1,133.33 per pay peri9d, but when the employer's share of tile payroll taxes is included, your employer spends $1,289.76. But your take-home pay is only $934.73. How does that happen?
If our current system of withholding taxes from your paycheck didn't exist, you'd get the entire $1,289.76 in your paycheck. Then you'd get to pay the taxes one at a time. Imagine this scene. You pick up your paycheck and then have to stop at a series of cashiers to pay each individual part of your tax burden. You run a gauntlet of seven windows, at which you fork over
You have now paid the government its $355.03 share, barely half of which would have appeared on a standard pay stub. You paycheck has shrunk by 28 percent.
But you're not done.
Out of your remaining take-home pay you will now have to pay property taxes, sales taxes, gasoline taxes, cigarette taxes, alcohol taxes and others, depending on where you live and what you do.
And you're still not done.
Other hidden costs of the burden of government include complying with the tax code ($225 billion in 1996 alone) and complying with government regulations ($688 billion, or about $6,800 per family).
Today the total federal, state, and local tax burden in America is at an all-time high. According to the Tax Foundation, a median-income, two-earner family pays nearly $23,000, or roughly 38 percent of its income, each year in federal, state, and local taxes. That is more than the typical family pays for food, clothing, housing, and transportation combined.
Figures for individual states are available at the Cato Institute web site.
This page was last updated 07/02/00 01:50 PM