Taxation: it’s more pervasive than you know

Here’s John D’Aloia’s “Trackside” column for December 20, 2009. In this article, John traces through the pervasiveness of taxation in many common products, and how long we must work each year to pay these taxes. Besides taxation, regulation is growing, too.

John D’Aloia lives in St. Marys, Kansas, where he serves on the city council.

Have you ever thought about how many taxes you are paying when you buy a product or a service? An amount is obvious when a sales tax is tacked on, but is that the only tax included in the price you pay? You know the answer — of course it is not, but the remaining taxes are out of sight, out of mind.

The Center For Fiscal Responsibility (www.fiscalaccountability.org), is a project of Americans for Tax Reform. As stated on its website, the mission of the Center is: “… to shed a light on government expenditures, and to promote transparency, accountability, and restraint in government finance.” It has taken on this mission in acknowledgment “… that the American people and its economy can best thrive and prosper when the role of government is limited and subject to the scrutiny of taxpayers.”

The Center has calculated the percentage that represents the hidden taxes paid for by each dollar spent for 13 commonly purchased goods and services. The Center’s analysis included: excise taxes, “Sin” taxes, telecommunications taxes, taxes on tourists, common purchases sales taxes, corporate income taxes, payroll taxes, property taxes, capital gains taxes, unemployment insurance taxes, workmen’s compensation taxes, and other payments businesses must make to federal, state and local governments. The results of the Center’s analysis shows that taxes represent the following percentages of the price:

Soda: 37.6%
Cell Phones: 46.4%
Gasoline: 51.2%
Meals Out: 44.8%
Hotel Stays: 50%
Landline Phones: 51.8%
Firearms: 45.6%
Domestic Airfare: 55%
Car Rentals: 60.6%
Cable: 46.3%
Beer: 56.2%
Distilled Spirits: 79.6%

And a drum-roll please for the taxes in the price of the 13th product: Cigarettes: 81.3%.

Another Center project is to calculate the “Cost of Government Day” for the federal government and for each state. The Cost of Government Day is defined as “the date of the calendar year on which the average American worker has earned enough gross income to pay off his or her share of the spending and regulatory burden imposed by government at the federal, state and local levels.” The 47-page long 2009 Cost of Government Day Report is available for reading via a link on the Center’s website.

The national average date to pay off governments is August 12th. Kansans have it a bit better. For Kansans, the date is August 4th. In comparison, the shortest period of indentured service is served by Alaskans who are free of working for government on July 11th. The longest period falls to citizens of the Nutmeg State — Connecticut residents work until September 7th to settle with all the government demands to which they are subjected.

The Report shows the impact of the explosion of federal government spending in 2009. For the period 1999 through 2008, the number of days the average citizen had to work to cover federal spending increased from 79.62 days to 89.94 days; in 2009, the number of days jumped to 110.88.

An interesting graph in the Center’s Report displayed the number of pages in the Federal Register each year from 1977 to the present. The Federal Register is published daily telling you what the Federal government is doing for you and to you. The more pages, the more regulations are being written to tell you how to live; the more pages, the larger is Leviathan’s appetite for power and your wallet. During the Reagan years, the average number of pages per year was 53,000. For the last seven years, the average number of pages has been 78,000. As of December 18th, this year’s Federal Register has 67,800 pages and counting, including 64 pages devoted to a proposed rule titled: “Nutrition Labeling of Single Ingredient Products and Ground or Chopped Meat and Poultry Products” and a 425-page notice “Medicare and Medicaid Programs; Quarterly Listing of Program Issuances — July Through September 2009.” I wonder how much these 425 pages enhanced medical care. More than likely, the principal effect was an added paperwork and compliance burden on doctors and hospitals.

Thomas Jefferson did not foresee the Federal Register, but he foresaw its ultimate impact when he wrote in his autobiography: “Were we directed from Washington when to sow, and when to reap, we should soon want bread.”

Get out and work hard — The Clerks are depending upon you.

See you Trackside.

2 Comments

  • I saw David Axlerod, Obama’s chief advisor, talking sunday on Meet the Press. He pointed out the need for health care reform by the 100% increase in premiums over the past 10 years. My first thought was how does that compare with the 100% increase in property taxes over the same period. Or the 100% increase in State, County, School Board,and City budgets. Or the 300% increase in the Fed. deficit this year. Yes my Blue Cross Blue Shield went up 100% but I didn’t worry one little bit when I went in for surgery. It cost me less than $1000 to have a new baby boy with a private birthing suite.
    I just lost my father in law Saturday, to cancer,he was insured by Medicare. His medicare ran out after 3 months then his personal funds paid for 2 months, and then they switched him to Medicaid. Medicaid took everything he had worked his whole life for (he was 80) including his house and all his belongings, to care for him for 3 months.
    That gives me real confidence in how my taxes are going to take care of me,and real confidence in the new government entitlement program called Health care Reform. With the $180,000 in taxes I paid last year I sure could have bought
    a lot more security than what my father in law got.
    I have an idea let’s let BC/BS run the government I’ll bet by the second year we’ll get a rebate check.

  • This study should be front page material. However, it left out one important area: Utilities. I paid our gas bill yesterday. Over half of the bill was for “taxes” or bogus charges of some kind (“transportation” charges, “energy” charges, etc.). The same is true of our electric bill.
    We are told to “protest” these charges with the companies involved, but we all know how that goes.
    How does one effectively challenge these outrageous charges?

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